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The Federal Reserve act

The Federal Reserve Act is the formal, legal authorization for our complete banking system. Under our legal system, all banking-related rules, regulations and directives by the Federal Reserve Board, HUD, State Banking authorities, the FDIC and all other agencies should be in accordance with the "Act". If the rules, regulations and directives are in conflict with the basic Act, they can be challenged in court and should be struck down. There is an established formal procedure for such challenges. That means the only two ways this Act can be significantly changed is (1) by Congress passing new legislation, or (2) by a court decision. The heart of the banking system is Section 204 (SEC. 204), which has to do with "Reserve Requirements"-- particularly SEC. 204.9. Basically SEC. 204 tells how much of their own money the bank has to have on hand to support various size banks. Three sizes are shown -- (Small) $0 to $8.5 million, (Medium) $8.5 million to $45.8 million and (Large) over $45.8 million. Note that the small banks need $0 (zero dollars), the medium size banks need 3% of their transaction accounts and the biggest banks need less than 10%. The average casual reader will probably think that can't be possible, and the reader will assume they do not understand that writing. If you are in that group of average readers please go to << http://www.primeronmoney.com/moneysupply.html >> Where we discuss, in simple language, how money is created.

Information on the complete Federal Reserve Act (Act) can be found if you start at the below- referenced URL.
We left some parts out in this online presentation (the omissions are indicated in red) .

This is taken from <<http://www.fdic.gov/regulations/laws/rules/7500-100.html>>

The links below should be live -- they go to the website of the Federal Deposit Insurance Corporation (FDIC)

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FDIC Law, Regulations, Related Acts

7500 - FDIC FRB Regulations {{6-30-05 p.7501}} TABLE OF CONTENTS FEDERAL RESERVE ACT SEC. 11    Reports of assets and liabilities    7509 SEC. 11A    Pricing of services    7510 SEC. 19(b)    Reserve requirements    7510.01 SEC. 19(c)    Form of reserves    7512.03 SEC. 22(g)    Loans to executive officers of banks    7512.04 SEC. 22(h)    Extensions of credit to executive officers, directors, and principal shareholders of member banks    7512.05 SEC. 23A    Banking Affiliates Act of 1982    7512.06-B  (a)    Restrictions on transactions with affiliates    7512.06-B  (b)    Definitions    7512.07  (c)    Collateral for certain transactions with affiliates    7512.09  (d)    Exemptions    7512.09  (e)    Rules relating to banks with financial subsidiaries    7512.10  (f)    Rulemaking and additional exemptions    7512.10 SEC. 23B    Restrictions on transactions with affiliates    7512.11 SEC. 25(A)    Banking corporations authorized to do foreign banking business    7513 PART 204—RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS (REGULATION D) Regulations SEC. 204.1    Authority, purpose and scope    7571 SEC. 204.2    Definitions    7572 SEC. 204.3    Computation and maintenance    7582 SEC. 204.4    Transitional adjustments in mergers    7586.01 SEC. 204.5    Emergency reserve requirement    7586.01 SEC. 204.6    Supplemental reserve requirement    7586.01 SEC. 204.7    Reserve deficiencies    7586.02 SEC. 204.8    International banking facilities    7586.03 SEC. 204.9    Reserve requirement ratios    7586.05 Interpretations SEC. 204.121    Bankers' banks    7586.06 SEC. 204.122    Secondary market activities of International Banking Facilities    7586.12 SEC. 204.123    Sale of federal funds by investment companies or trusts in which the entire beneficial interest is held exclusively by depository institutions    7586.13 SEC. 204.124    Repurchase agreement involving shares of a money market mutual fund whose portfolio consists wholly of United States Treasury and federal agency securities    7586.14 SEC. 204.125    Foreign, international, and supranational entities referred to in §§ 204.2(c)(1)(iv)(E) and 204.8(a)(2)(i)(B)(5)    7586.15 SEC. 204.126    Depository institution participation in ``federal funds'' market    7586.16 SEC. 204.127    Nondepository participation in ``federal funds'' market    7586.16 SEC. 204.128    Deposits at foreign branches guaranteed by domestic office of a depository institution    7586.17 SEC. 204.129    [Removed] SEC. 204.130    Eligibility for NOW accounts    7587.18 {{6-30-05 p.7502}} SEC. 204.131    Participation by a depository institution in the secondary market for its own time deposits    7586.19 SEC. 204.132    Treatment of loan strip participations    7586.20 SEC. 204.133    Multiple savings deposits treated as a transaction account    7586.21 SEC. 204.134    Linked time deposits and transaction accounts    7586.22 SEC. 204.135    Shifting funds between depository institutions to make use of the low reserve tranche    7586.23 SEC. 204.136    Treatment of trust overdrafts for reserve requirement reporting purposes    7586.25 PART 206—LIMITATIONS ON INTERBANK LIABILITIES (REGULATION F) SEC. 206.1    Authority, purpose, and scope    7586.31 SEC. 206.2    Definitions    7586.31 SEC. 206.3    Prudential standards    7586.32 SEC. 206.4    Credit exposure    7586.33 SEC. 206.5    Capital levels of correspondents    7586.34 SEC. 206.6    Waiver    7586.35 {{6-30-05 p.7503}} PART 211—INTERNATIONAL BANKING OPERATIONS (REGULATION K) ELIMINATED HEREIN PART 215—LOANS TO EXECUTIVE OFFICERS, DIRECTORS, AND PRINCIPAL SHAREHOLDERS OF MEMBER BANKS (REGULATION O) Subpart A—Loans by Member Banks to Their Executive Officers, Directors, and Principal Shareholders SEC. 215.1    Authority, purpose, and scope    7641 SEC. 215.2    Definitions    7642 SEC. 215.3    Extension of credit    7644 SEC. 215.4    General prohibitions    7646 SEC. 215.5    Additional restrictions on loans to executive officers of member banks    7648 SEC. 215.6    Prohibition on knowingly receiving unauthorized extension of credit    7648.01 SEC. 215.7    Extensions of credit outstanding on March 10, 1979    7648.01 SEC. 215.8    Records of member banks    7649 SEC. 215.9    Reports by executive officers    7649 SEC. 215.10    Report on credit to executive officers    7650 SEC. 215.11    Disclosure of credit from member banks to executive officers and principal shareholders    7650 SEC. 215.12    Reporting requirement for credit secured by certain bank stock    7651 SEC. 215.13    Civil penalties    7651 Subpart B—Reports on Indebtedness of Executive Officers and Principal Shareholders to Correspondent Banks SEC. 215.20    Authority, purpose, and scope    7651 SEC. 215.21    Definitions    7651 SEC. 215.22    Report by executive officers and principal shareholders    7652 SEC. 215.23    Disclosure of credit from correspondent banks to executive officers and principal shareholders    7652.01 Background and summary of Regulation O and FIRA title VIII and IX    7653 Board interpretations of Regulation O    7655 Board rulings and staff opinions interpreting Regulation O    7656.08 PART 217—PROHIBITION AGAINST THE PAYMENT OF INTEREST ON DEMAND DEPOSITS ELIMINATED HEREIN PART 220—CREDIT BY BROKERS AND DEALERS (REGULATION T) Regulations SEC. 220.1    Authority, purpose, and scope    7657 SEC. 220.2    Definitions    7658 SEC. 220.3    General provisions    7661 SEC. 220.4    Margin account    7662 SEC. 220.5    Special memorandum account    7664 SEC. 220.6    Good faith account    7664 SEC. 220.7    Broker-dealer credit account    7665 SEC. 220.8    Cash account    7666 SEC. 220.9    Clearance of securities, options, and futures    7668 SEC. 220.10    Borrowing and lending securities    7668 {{10-31-01 p.7504.01}} SEC. 220.11    Requirements for the list of marginable OTC stocks and the list of foreign margin stocks    7668 SEC. 220.12    Supplement: Margin requirements    7670 SEC. 220.132    Credit to brokers and dealers    7671 Forms Agreement of Domestic (T–1) and Foreign (T–2) Nonmember Banks (Federal Reserve Form T–1, T–2)    7672 Statement of Purpose of an Extension of Credit by a Creditor (Federal Reserve Form T–4)    7674 PART 221—CREDIT BY BANKS AND PERSONS OTHER THAN BROKERS OR DEALERS FOR THE PURPOSE OF PURCHASING OR CARRYING MARGIN STOCK (REGULATION U) NOT INCLUDED HERE PART 223—TRANSACTIONS BETWEEN MEMBER BANKS AND THEIR AFFILIATES (REGULATION W) Subpart A — INTRODUCTION AND DEFINITIONS SEC. 223.1    Authority, purpose and scope    7782 SEC. 223.2    What is an ``affiliate'' for purposes of sections 23A and 23B and this part?    7782 SEC. 223.3    What are the meanings of the other terms used in sections 23A and 23B and this part?    7784 Subpart B — General Provisions of Section 23A SEC. 223.11    What is the maximum amount of covered transactions that a member bank may enter into with any single affiliate?    7788 SEC. 223.12    What is the maximum amount of covered transactions that a member bank may enter into with all affiliates?    7788 SEC. 223.13    What safety and soundness requirement applies to covered transactions?    7788 SEC. 223.14    What are the collateral requirements for a credit transaction with an affiliate?    7788 SEC. 223.15    May a member bank purchase a low-quality asset from an affiliate?    7790 SEC. 223.16    What transactions by a member bank with any person are treated as transactions with an affiliate?    7791 Subpart C — Valuation and Timing Principles Under Section 23A SEC. 223.21    What valuation and timing principles apply to credit transactions?    7792 SEC. 223.22    What valuation and timing principles apply to asset purchases?    7794 SEC. 223.23    What valuation and timing principles apply to purchases of and investments in securities issued by an affiliate?    7795 SEC. 223.24    What valuation principles apply to extensions of credit secured by affiliate securities?    7796 Subpart D — Other Requirements Under Section 23A SEC. 223.31    How does section 23A apply to a member bank's acquisition of an affiliate that becomes an operating subsidiary of the member bank after the acquisition?    7797 SEC. 223.32    What rules apply to financial subsidiaries of a member bank?    7798 SEC. 223.33    What rules apply to derivative transactions?    7799 Subpart E — Exemptions from the Provisions of Section 23A SEC. 223.41    What covered transactions are exempt from the quantitative limits and collateral requirements?    7800 SEC. 223.42    What covered transactions are exempt from the quantitative limits, collateral requirements, and low-quality asset prohibition?    7801 SEC. 223.43    What are the standards under which the Board may grant additional exemptions from the requirements of section 23A?    7803 {{10-31-03 p.7507}} Subpart F — General Provisions of Section 23B SEC. 223.51    What is the market terms requirement of section 23B?    7803 SEC. 223.52    What transactions with affiliates or others must comply with section 23B's market terms requirement?    7804 SEC. 223.53    What asset purchases are prohibited by section 23B?    7804 SEC. 223.54    What advertisements and statements are prohibited by section 23B?    7805 SEC. 223.55    What are the standards under which the Board may grant exemptions from the requirements of section 23B?    7805 Subpart G — Application of Sections 23A and 23B to U.S. Branches and Agencies of Foreign Banks NOT INCLUDED HERE Subpart H — Miscellaneous Interpretations SEC. 223.71    How do sections 23A and 23B apply to transactions in which a member bank purchases from one affiliate an asset relating to another affiliate?    7806 PART 224—BORROWERS OF SECURITIES CREDIT (REGULATION X) SEC. 224.1    Authority, purpose and scope    7841 SEC. 224.2    Definitions    7841 SEC. 224.3    Margin regulations to be applied by nonexempted borrowers    7842 [The page following this is 7509.]