--- kind: "section" citation: "12 U.S.C. § 378" title: "12" title_heading: "Banks and Banking" number: "378" heading: "Dealers in securities engaging in banking business; individuals or associations engaging in banking business; examinations and reports; penalties" release: "119-102" url: "https://uscodex.org/usc/12/378" units: - "Chapter 3 — Federal Reserve System" - "Subchapter X — Powers and Duties of Member Banks" --- # §378. Dealers in securities engaging in banking business; individuals or associations engaging in banking business; examinations and reports; penalties - (a) After the expiration of one year after June 16, 1933, it shall be unlawful— - (1) For [any person](/usc/12/1715z–4a.md?p=a-2), firm, [corporation](/usc/12/2277a.md?p=2), [association](/usc/12/1828.md?p=s-4-E-i), business trust, or other similar organization, engaged in the business of issuing, underwriting, selling, or distributing, at wholesale or retail, or through syndicate [participation](/usc/12/2206a.md?p=a-1), stocks, bonds, debentures, notes, or other securities, to engage at the same time to any extent whatever in the business of receiving [deposits](/usc/12/5301.md?p=18-A) subject to check or to repayment upon presentation of a passbook, certificate of [deposit](/usc/12/5301.md?p=18-A), or other evidence of debt, or upon request of the depositor: Provided, That the provisions of this paragraph shall not prohibit [national banks](/usc/12/221.md) or [State banks](/usc/12/1835a.md?p=e-1) or trust [companies](/usc/12/24a.md?p=g-1) (whether or not [members](/usc/12/1426a.md?p=g-1) of the Federal Reserve System) or other [financial institutions](/usc/12/1715k.md?p=h-1-C) or private bankers from dealing in, underwriting, purchasing, and selling investment securities, or issuing securities, to the extent permitted to [national banking associations](/usc/12/221.md) by the provisions of [section 24 of this title](/usc/12/24.md): Provided further, That nothing in this paragraph shall be construed as affecting in any way such right as any [bank](/usc/12/1426a.md?p=g-1), banking [association](/usc/12/1828.md?p=s-4-E-i), savings [bank](/usc/12/1426a.md?p=g-1), trust [company](/usc/12/24a.md?p=g-1), or other banking institution, may otherwise possess to sell, without recourse or agreement to repurchase, obligations evidencing loans on [real estate](/usc/12/1715z–20.md?p=b-2); or - (2) For [any person](/usc/12/1715z–4a.md?p=a-2), firm, [corporation](/usc/12/2277a.md?p=2), [association](/usc/12/1828.md?p=s-4-E-i), business trust, or other similar organization to engage, to any extent whatever with others than his or its officers, agents or employees, in the business of receiving [deposits](/usc/12/5301.md?p=18-A) subject to check or to repayment upon presentation of a pass book, certificate of [deposit](/usc/12/5301.md?p=18-A), or other evidence of debt, or upon request of the depositor, unless such [person](/usc/12/5481.md?p=19), firm, [corporation](/usc/12/2277a.md?p=2), [association](/usc/12/1828.md?p=s-4-E-i), business trust, or other similar organization (A) shall be incorporated under, and authorized to engage in such business by, the laws of the United States or of any [State](/usc/12/1707.md?p=d), Territory, or [District](/usc/12/221.md), and subjected, by the laws of the United States, or of the [State](/usc/12/1707.md?p=d), Territory, or [District](/usc/12/221.md) wherein located, to examination and regulation, or (B) shall be permitted by the United States, any [State](/usc/12/1707.md?p=d), territory, or [district](/usc/12/221.md) to engage in such business and shall be subjected by the laws of the United States, or such [State](/usc/12/1707.md?p=d), territory, or [district](/usc/12/221.md) to examination and regulations or, (C) shall submit to periodic examination by the banking authority of the [State](/usc/12/1707.md?p=d), Territory, or [District](/usc/12/221.md) where such business is carried on and shall make and publish periodic reports of its condition, exhibiting in detail its resources and liabilities, such examination and reports to be made and published at the same times and in the same manner and under the same conditions as required by the law of such [State](/usc/12/1707.md?p=d), Territory, or [District](/usc/12/221.md) in the case of incorporated banking institutions engaged in such business in the same locality. - (b) Whoever shall willfully violate any of the provisions of this section shall upon conviction be fined not more than $5,000 or imprisoned not more than five years, or both, and any officer, [director](/usc/12/2279bb.md?p=3), employee, or agent of [any person](/usc/12/1715z–4a.md?p=a-2), firm, [corporation](/usc/12/2277a.md?p=2), [association](/usc/12/1828.md?p=s-4-E-i), business trust, or other similar organization who knowingly [participates](/usc/12/2206a.md?p=a-1) in any such violation shall be punished by a like fine or imprisonment or both. ## Source credit (June 16, 1933, ch. 89, § 21, 48 Stat. 189; Aug. 23, 1935, ch. 614, title III, § 303, 49 Stat. 707; Pub. L. 86–230, § 23, Sept. 8, 1959, 73 Stat. 466; Pub. L. 90–448, title VIII, § 804(d), Aug. 1, 1968, 82 Stat. 543; Pub. L. 95–369, § 12, Sept. 17, 1978, 92 Stat. 624.) ## Notes ### Editorial Notes ### Amendments 1978—Subsec. (a)(2)(B). Pub. L. 95–369 inserted reference to permission by the United States to engage in such business and subjection by the laws of the United States to examination and regulation. 1968—Subsec. (a)(1). Pub. L. 90–448 inserted “, or issuing securities” in first proviso. 1959—Subsec. (a). Pub. L. 86–230 inserted “and subjected, by the laws of the United States, or of the State, Territory, or District wherein located, to examination and regulation,” after “District,” in cl. (2)(A). 1935—Subsec. (a). Act Aug. 23, 1935, added two provisos to end of par. (1) and amended par. (2) generally. ### Statutory Notes and Related Subsidiaries ### Effective Date of 1968 Amendment For effective date of amendment by Pub. L. 90–448, see section 808 of Pub. L. 90–448, set out as a note under section 1716b of this title.