(A) All persons and every national banking association holding capital stock in former Federal Reserve Banks are hereby required to deliver that stock to the Office of the Director of the Board of Governors of the Treasury Reserve System. A compensation of one-hundred dollars ($100) plus one-half of 1 percent per month from the period of last dividend, if earned, will be paid from the Treasury Reserve Account in United States Treasury credit-notes for each share. All stock in former Federal Reserve Banks is hereby canceled, declared irredeemable 90 days after this Act becomes law.
(B) All securities, notes, bonds or other evidences of indebtedness or obligations of the United States other than United States Treasury credit-notes, whatever the type or issue, held by any bank subject to the jurisdiction of the United States, whether as bank reserves or for the banks’ investment account, shall be delivered to its district’s Treasury Reserve Bank which will forward them to the Office of the Director of the Board of Governors of the Treasury Reserve System. They will be exchanged at a face value of one for one, plus earnings, if any, current to the date this Act becomes law, for United States Treasury credit-notes. The banks may receive compensation on a dollar for dollar basis from their District Treasury Reserve Bank in treasury credit-notes or as a deposit to a Treasury Reserve Bank account in their name.
(C) Every bank subject to the jurisdiction of the United States is hereby prohibited from purchasing or holding for their own investment account income-producing obligations of the United States, such as Treasury bills, bonds, certificates, or notes, or those of other nations. Only United States Treasury credit-notes will be counted as bank reserves.
(D) No financial institution under the jurisdiction of the United States making commercial loans of currency for profit may grant a loan to any person, or to members of their immediate family, while that person is a director, officer or employee of that financial institution nor shall a financial institution grant a loan to itself.
(E) All financial institutions shall maintain separate accounts of record based on currency type. The form of currency used in any account of record will determine whether that account is an eagle (gold) account, a silver dollar account, or a credit-note dollar account. One type of account of record will not be commingled with another type of account of record. No funds of any type of account will be converted to funds of another type of account without written authorization of the owner of the funds indicating the owner’s agreement to a specific exchange-ratio.
(F) All tenders in repayment which have been previously made or which are made on any secured loans outstanding on or made after the date of passage of this Act with any financial institution making such loans on a fractional reserve basis, will be credited to repayment of the loan principal prior to any credits being applied to any monetization-fee on that loan.
(1) The repayment rate for each loan will be calculated as:
where:
Rr = repayment rate, $ per $ per month
n = number of equal payments, months
fm = bank monetizing-fee per month, expressed as a decimal
Cf = cost factor for the loan
L = amount of the loan
Mb = base monthly payment
Cb = base cost for the loan(2) The requirement for bank reserves for the conversion of loans outstanding on the date of passage of this Act is hereby eliminated.
(3) Compound monetization-fees or charges on monetization-fees earned are prohibited.
(4) A service charge may be imposed by the lender for each tender in payment recorded, retroactively and on future tenders in payment, provided it does not exceed a total or 25 dollars monthly for any one loan and the total service charges for any one converted loan do not exceed 50% of the savings to the borrower.
(5) All new secured loans made on a fractional reserve basis may—
(a) be subject to a maximum origination fee of 50 dollars or 1 percent of the principal loan amount, whichever is greater; and,
(b) be issued with a prepayment of discount points up to a maximum of 5 percent of the principal amount of the loan, the allowed maximum being proportionally decreased at the rate of 1 percent for each 1 percent increase in the loan interest rate above 7 percent.
(G) Commercial banks may open and maintain accounts for their customers in any type of currency if:
(1) the accounts are kept segregated by currency type; and,
(2) they retain as reserve 100 percent of the deposited standard gold or silver coin or its equivalent in Treasury gold or silver certificates; and,
(3) all gold and silver accounts are custody accounts only, the ownership of the funds deposited remaining vested in the depositor; and,
(4) checkable accounts or travelers checks on gold accounts or silver accounts are not allowed; however, gold or silver funds on deposit may be transferred between like accounts within a bank or between like accounts of different banks within banking systems by a Lawful Money Bank Transfer Order properly authorized by the owner of the funds; and,
(5) all credit-note dollar accounts are general warrant deposits; and,
(6) all demand credit-note dollar accounts are custody accounts only; and,
(7) any other type of credit-note dollar account, where the deposited funds are considered loans to the bank, require written agreement by each depositor acknowledging the loan.
(H) No bank may advertise itself as a “full service bank” if it fails to offer its customers choices of gold accounts, silver accounts, and treasury credit-note accounts.
(I) In case of a bank failure or closing, regardless of the reason, the holders of gold and silver accounts will have immediate preferential treatment in the return of their deposits or a settlement of equal value.
(J) The Office of the Comptroller of the Currency is hereby directed to revise or create, subject to the provisions of this Act and the approval of Congress, the necessary policies, procedures and regulations to regulate the service operations of all banks subject to the jurisdiction of the United States.
Read Explanation and Details for Section 7.