A bill to assist cities and States by amending section 5136 of the Revised Statutes, as amended, with respect to the authority of national banks to underwrite and deal in securities issued by State and local governments, and for other purposes.

Summary

Provides that the limitations and restrictions placed upon national banks as to dealing in and underwriting investment securities shall not apply to all other nongeneral obligations issued or guaranteed by or on behalf of a State or any political subdivision thereof or agency of a State or any political subdivision thereof (except special assessment obligations and industrial revenue bonds) which are at the time eligible for purchase by a national bank for its own account, except that (1) no association shall hold such obligations of any one obligor or maker as a result of underwriting, dealing, or purchasing for its own account in a total amount exceeding at any one time 10 percent of its capital stock actually paid in and unimpaired and surplus fund, (2) the purchase of such obligations by a national bank as fiduciary from such bank as an underwriter or dealer shall not be permitted unless lawfully directed by court order, (3) no association may purchase such obligations as fiduciary from a member of syndicate in which such association is participating until the syndicate has closed as to underwriting, (4) any sales of such obligations by an association to any of its depositors or borrowers or to any correspondent bank must be accompanied by a disclosure in writing to the purchaser that the association is selling as an underwriter or dealer, and (5) the purchase, during the underwriting period, of any such obligations by an association for its own investment account, from such association's account acting as underwriter, dealer, or trader, or from any entity affiliated with such association within the meaning of the Banking Act, shall not be permitted. Provides that this restriction shall not apply to any purchases by an association for its investment account or accounts of any such obligations (1) it alone has underwritten or (2) directly from the underwriting syndicate or member thereof in which it is a participant, or to associations not in the underwriting syndicate. States that the Secretary of the Treasury shall submit an annual report to the Congress showing the extent to which the business of underwriting and dealing in State and local obligations is being carried on by commercial banks as compared with other banking institution with a view to determining the effect of the amendment made by the first section of this Act on the institutional distribution of such business. (Amends 12 U.S.C. 24)

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1 official file

• Introduced in Senate

  summary · EN · 1 June 1973

  Open at official source

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