Reserves — Us Code Code § 3904
Us Code Code § 3904 — Reserves. Reproduced from the official United States Code, with a citation summary, verification link, and related provisions.
§ 3904. Reserves
(a) Establishment and maintenance of special reserves
(1) Each appropriate Federal banking agency shall require a banking institution to establish and maintain a special reserve whenever, in the judgment of such appropriate Federal banking agency—
(A) the quality of such banking institution's assets has been impaired by a protracted inability of public or private borrowers in a foreign country to make payments on their external indebtedness as indicated by such factors, among others, as—
(i) a failure by such public or private borrowers to make full interest payments on external indebtedness;
(ii) a failure to comply with the terms of any restructured indebtedness; or
(iii) a failure by the foreign country to comply with any International Monetary Fund or other suitable adjustment program; or
(B) no definite prospects exist for the orderly restoration of debt service.
(2) Such reserves shall be charged against current income and shall not be considered as part of capital and surplus or allowances for possible loan losses for regulatory, supervisory, or disclosure purposes.
(b) Accommodation of potential losses on foreign loans by United States banks
The appropriate Federal banking agencies shall analyze the results of foreign loan rescheduling negotiations, assess the loan loss risk reflected in rescheduling agreements, and, using the powers set forth in section 3907 of this title (regarding capital adequacy), ensure that the capital and reserve positions of United States banks are adequate to accommodate potential losses on their foreign loans.
(c) Regulations and orders of Federal banking agencies
The appropriate Federal banking agencies shall promulgate regulations or orders necessary to implement this section within one hundred and twenty days after November 30, 1983.
(Pub. L. 98–181, title I [title IX, §905], Nov. 30, 1983, 97 Stat. 1279.)
About This Section
12 U.S.C. § 3904 is part of Title 12 of the United States Code. The United States Code is the official codification of federal statutes maintained by the Office of the Law Revision Counsel of the U.S. House of Representatives. Congress amends the Code through new public laws, which are eventually incorporated into the relevant title.
This section may be cited in legal writing as 12 U.S.C. § 3904. For the most current official text, including any recent amendments, use the official source links below. Do not rely on this page as the sole authority for legal citation or litigation.
How to Read This Statute
Statutes are organized by title, chapter, section, and subsection. Pay attention to words like "shall," "may," "and," and "or," because they determine whether a requirement is mandatory or permissive and whether multiple conditions must all be met. Historical notes and amendments often appear at the end of a section.
Using This Page
This page is intended for research and educational use. Lawyers, students, journalists, and compliance professionals can use it as a starting point, but should always verify the current text through an official government source before relying on it for legal advice, filings, or compliance decisions.