39. NATIONAL AGRICULTURAL CREDIT CORPORATIONS Existing law Title 12, U. S. C., secs. 1151–1322.— Recommendation Repeal. If these sections are repealed references to the national agricultural credit corporations should be eliminated from sections 6 and 10 of title 12 of the United States Code. Reasons These statutes deal with the organization, operation, and dissolution of national agricultural credit corporations. The last national agricultural credit corporation was liquidated in 1938. Under the provisions of section 77 of the Banking Act of 1933 no national agricultural credit corporation may now be formed. Therefore, these provisions of law are obsolete. 40. BONDS OF HOME OWNERS' LOAN CORPORATION AS LAWFUL Existing law [1340] Title 12, U. S. C., sec. 1463 (c).—* * * Such bonds shall be fully and unconditionally guaranteed both as to interest and principal by the United States, and such guaranty shall be expressed on the face thereof, and such bonds shall be lawful investments, and may be accepted as security, for all fiduciary, trust, and public funds, the investment or deposit of which shall be under the authority or control of the United States or any officer or officers thereof. * * * Recommendation It is recommended that title 12, United States Code, section 1463 (c), be repealed. Reasons The act of June 30, 1953 (67 Stat. 126), dissolved and abolished the Home Owners' Loan Corporation. We are informed that all bonds of the corporation were retired on January 27, 1950. Since HOLC has been abolished and its bonds retired there is no longer any reason to list them as a lawful investment for trust funds. 41. ACTING COMPTROLLER OF THE CURRENCY ON BOARD OF THE FEDERAL DEPOSIT INSURANCE CORPORATION Existing law Title 12, U. S. C., sec. 1812 (Federal Deposit Insurance Act, sec. 2). The management of the Corporation shall be vested in a Board of Directors consisting of three members, one of whom shall be the Comptroller of the Currency, and two of whom shall be citizens of the United States to be appointed by the President, by and with the advice and consent of the Senate. One of the appointive members shall be the Chairman of the Board of Directors of the Corporation and not more than two of the members of such Board of Directors shall be members of the same political party. Each such appointive member shall hold office for a term of six years. In the event of a vacancy in the office of the Comptroller of the Currency, and pending man. the appointment of his successor, or during the absence of the Comptroller from Washington, the Acting Comptroller of the Currency shall be a member of the Board of Directors in the place and stead of the Comptroller. In the event of a vacancy in the office of the Chairman of the Board of Directors, and pending the appointment of his successor, the Comptroller of the Currency shall act as ChairThe members of the Board of Directors shall be ineligible during the time they are in office and for two years thereafter to hold any office, position, or employment in any insured bank, except that this restriction shall not apply to any member who has served the full term for which he was appointed. No member of the Board of Directors shall be an officer or director of any insured bank or Federal Reserve bank or hold stock in any insured bank; and before entering upon his duties as a member of the Board of Directors he shall certify under oath that he has complied with this requirement and such certification shall be filed with the secretary of the Board of Directors. Recommendation This statute should be amended to provide that in case of the inability of the Comptroller of the Currency to act, through illness or otherwise, the Acting Comptroller of the Currency shall be a member of the Board of Directors in the place and stead of the Comptroller. Reasons While the statute now provides that the Acting Comptroller of the Currency shall serve as a member of the Board of Directors of the Federal Deposit Insurance Corporation in the event of a vacancy in the office of the Comptroller of the Currency and during the absence of the Comptroller from Washington, it says nothing about the Acting Comptroller of the Currency serving as such director in the event of the illness of the Comptroller. While it would be assumed that the Acting Comptroller of the Currency should serve as a director of a corporation during the illness of the Comptroller, the matter should be made statutory in order that any doubt on that score may be eliminated. 42. MERGERS OR CONSOLIDATIONS BY INSURED BANKS Existing law Title 12, U. S. C., sec. 1828 (c).-Without prior written consent by the Corporation, no insured bank shall (1) merge or consolidate with any non-insured bank or institution or convert into a noninsued bank or institution or (2) assume liability to pay any deposits made in, or similar liabilities of, any noninsured bank or institution or (3) transfer assets to any noninsured bank or institution in consideration of the assumption of liabilities for any portion of the deposits made in such insured bank. No insured bank shall convert into an insured State bank if its capital stock, or its surplus will be less than the capital stock or surplus, respectively, of the converting bank at the time of the shareholders' meeting approving such conversion, without prior written consent by the Comptroller of the Currency if the resulting bank is to be a District bank, or by the Board of Governors of the Federal Reserve System if the resulting bank is to be a State member bank (except a District bank), or by the Corporation if the resulting bank is to be a 83668-565 State nonmember insured bank (except a District bank). No insured bank shall (i) merge or consolidate with an insured State bank under the charter of a State bank or (ii) assume liability to pay any deposits made in another insured bank, if the capital stock or surplus of the resulting or assuming bank will be less than the aggregate capital stock or aggregate surplus, respectively, of all the merging or consolidating banks or of all the parties to the assumption of liabilities, at the time of the shareholders' meetings which authorized the merger or consolidation or at the time of the assumption of liabilities, unless the Comptroller of the Currency shall give prior written consent if the assuming bank is to be a national bank or the assuming or resulting bank is to be a District bank; or unless the Board of Governors of the Federal Reserve System gives prior written consent if the assuming or resulting bank is to be a State member bank (except a District bank); or unless the Corporation gives prior written consent if the assuming or resulting bank is to be a nonmember insured bank (except a District bank). No insured State nonmember bank (except a Dístrict bank) shall, without the prior consent of the Corporation, reduce the amount or retire any part of its common or preferred capital stock, or retire any part of its capital notes or debentures. Recommendation It is recommended that this statute be amended to provide that no insured bank shall merge or consolidate with any other insured bank or acquire the assets of, or assume liability to pay any deposits made in, any other insured bank without the prior written consent of the appropriate Federal authority. It should also provide that in granting or withholding its consent the approving authority must consider the factors enumerated in section 6 of the Federal Deposit Insurance Act and also must take into consideration whether the effect of the transaction may be to lessen competition unduly or tend unduly to create a monopoly. In the interests of uniform standards, the approving authority should be required to first seek the views of each of the other two banking agencies, and should also be authorized to request the opinion of the Attorney General of the United States. Reasons A variety of causes have resulted in an increased number of bank consolidations or mergers since the end of World War II, and particularly during the last 5 years. This has given rise to some apprehension that desirable levels of competition in banking might not be maintained unless steps were taken to enact legislation requiring that full consideration be given to the competitive aspects of such transactions prior to being approved by the Government official having jurisdiction. The Federal bank supervisory agencies are not now required by statute to consider the competitive or monopolistic aspects of merger transactions requiring their approval and bank asset acquisitions are not now subject to section 7 of the Clayton Act. It is believed that in exercising their authority over bank mergers and consolidations, the Federal banking authorities should be required to consider in addition to banking factors whether the result thereof might be to lessen competition unduly or to tend unduly to create a monopoly. This authority should be vested in the bank supervisory agencies as banking is a supervised and regulated industry, and important banking factors must be weighed in conjunction with purely competitive factors in arriving at sound decisions. Since there will be three banking agencies making decisions in respect to this matter, the legislation should require that, in the interests of achieving uniform standards, the Federal bank supervisory agency having jurisdiction in a particular case shall seek the views of each of the other two supervisory agencies on the competitive and monopolistic aspects of such asset acquisitions. The approving authority should be authorized to request the opinion of the Attorney General of the United States in order that the knowledge of the Antitrust Division of the Department of Justice would be available to it. Final authority should, however, be placed in the hands of the Federal banking supervisory agencies whose officials are intimately familiar with banking in all its phases throughout the United States. The views of this Department with respect to this matter were presented to the Senate Committee on Banking and Currency in great detail during the 2d session of the 84th Congress with respect to S. 3911. This recommendation was incorporated in S. 3911, which was passed by the Senate but not by the House of Representatives during the 84th Congress. 43. USE OF CERTAIN WORDS AS PART OF BUSINESS NAME Existing law Title 18, U. S. C., sec 709 (Crimes and Criminal Procedure).— Whoever, except as permitted by the laws of the United States, uses the words "national", "Federal", United States", reserve", or "Deposit Insurance" as part of the business or firm name of a person, corporation, partnership, business trust, association or other business entity engaged in the banking, loan, building and loan, brokerage, factorage, insurance, indemnity, savings or trust business; or Whoever falsely advertises or represents, or publishes or displays any sign, symbol or advertisement reasonably calculated to convey the impression that a nonmember bank, banking association, firm or partnership is a member of the Federal reserve system; or Whoever, except as expressly authorized by Federal law, uses the words "Federal Deposit", "Federal Deposit Insurance", or "Federal Deposit Insurance Corporation" or a combination of any three of these words, as the name or a part thereof under which he or it does business, or advertises or otherwise represents falsely by any device whatsoever that his or its deposit liabilities, obligations, certificates, or shares are insured or guaranteed by the Federal Deposit Insurance Corporation, or by the United States or by any instrumentality thereof, or whoever advertises that his or its deposits, shares, or accounts are federally insured, or falsely advertises or otherwise represents by any device whatsoever the extent to which or the manner in which the deposit liabilities of an insured bank or banks are insured by the Federal Deposit Insurance Corporation; or Whoever, not being organized under chapter 7 of title 12, advertises or represents that it makes Federal Farm loans or advertises or offers for sale as Federal Farm loan bonds any bond not issued under chapter 7 of Title 12, or uses the word "Federal" or the words "United States" or any other words implying Government ownership, cbligation or supervision in advertising or offering for sale any bond, note, mortgage or other security not issued by the Government of the United States under the provisions of said chapter 7 or some other Act of Congress; or Whoever uses the words "Federal Home Loan Bank" or any combination or variation of these words alone or with other words as a business name or part of a business name, or falsely publishes, advertises or represents by any device or symbol or other means reasonably calculated to convey the impression that he or it is a Federal Home Loan Bank or member of or subscriber for the Stock of a Federal Home Loan Bank; or Whoever uses the words "National Agricultural Credit Corporation" as part of the business or firm name of a person, corporation, partnership, business trust, association or other business entity not organized under the laws of the United States as a National Agricultural Credit Corporation; or Whoever uses the word "Federal intermediate credit bank" as part of the business or firm name for any person, corporation, partnership, business trust, association or other business entity not organized as an intermediate credit bank under the laws of the United States; or Whoever uses as a firm or business name the words "Housing and Home Finance Agency", "Federal Housing Administration", Federal National Mortgage Association", or "Public Housing Administration" or the letters "FHA" or any combination or variation of those words or the letters "FHA" alone or with other words or letters reasonably calculated to convey the false impression that such name or business has some connection with, or authorization from, the Housing and Home Finance Agency, the Federal Housing Administration, the Federal National Mortgage Association, the Public Housing Administration, the Government of the United States or any agency thereof, which does not in fact exist, or falsely claims that any repair, improvement, or alteration of any existing structure is required or recommended by the Housing and Home Finance Agency, the Federal Housing Administration, the Federal National Mortgage Association, the Public Housing Administration, the Government of the United States or any agency thereof, for the purpose of inducing any person to enter into a contract for the making of such repairs, alterations, or improvements, or falsely advertises or falsely represents by any device whatsoever that any housing unit, project, business, or product has been in any way endorsed, authorized, inspected, appraised, or approved by the Housing and Home Finance Agency, the Federal Housing Administration, the Federal National Mortgage Association, the Public Housing Administration, the Government of the United States or any agency thereof; or Whoever, except with the written permission of the Director of the Federal Bureau of Investigation, knowingly uses the words "Federal Bureau of Investigation" or the initials "F. B. I.", or any colorable imitation of such words or initials, in connection with any advertisement, circular, book, pamphlet or other publication, play, motion picture, broadcast, telecast, or other production, in a manner reasonably calculated to convey the impression that such advertisement, circular, book, pamphlet or other publication, play, motion picture, broadcast, telecast, or other production, is approved, endorsed, or authorized by the Federal Bureau of Investigation; or |