BANK

bank. 1. A financial establishment for the deposit, loan, exchange, or issue of money and for the transmission of funds; esp., a member of the Federal Reserve System. • Under securities law, a bank includes any banking institution, whether or not incorporated, doing business under federal or state law, if a substantial portion of the institution’s business consists of receiving deposits or exercising fiduciary powers similar to those permitted to national banks and if the institution is supervised and examined by a state or federal banking authority; or a receiver, conservator, or other liquidating agent of any of the above institutions. 15 USCA § 78c(a)(6). [Cases: Banks and Banking  1, 232, 289. C.J.S. Banks and Banking §§ 6, 482–483, 599–600.] 2. The office in which such an establishment conducts transactions.

“A bank is a quasi public institution, for the custody and loan of money, the exchange and transmission of the same by means of bills and drafts, and the issuance of its own promissory notes, payable to bearer, as currency, or for the exercise of one or more of these functions, not always necessarily chartered, but sometimes so, created to subserve public ends, or a financial institution regulated by law …. A bank is wholly a creature of statute doing business by legislative grace and the right to carry on a banking business through the agency of a corporation is a ‘franchise’ which is dependent on a grant of corporate powers by the state.” 1A Michie on Banks and Banking§ 2, at 5–6 (1993).

bank for cooperatives.A bank within a system of banks established to provide a permanent

source of credit to farmers’ cooperatives and supervised by the Farm Credit Administration. [Cases:

Banks and Banking  401–409. C.J.S. Banks and Banking §§ 665–666.]

collecting bank.In the check-collection process, any bank handling an item for collection,

except for the payor bank or the depository bank. UCC § 4-105(5). [Cases: Banks and Banking

156–163. C.J.S. Banks and Banking §§ 317, 319, 322, 327, 382–400, 402, 404, 407, 409–410,

414.]

commercial bank.A bank authorized to receive both demand and time deposits, to engage in

trust services, to issue letters of credit, to rent time-deposit boxes, and to provide similar services. correspondent bank.A bank that acts as an agent for another bank, or engages in an exchange of services with that bank, in a geographical area to which the other bank does not have direct access.

custodian bank.A bank or trust company that acts as custodian for a clearing corporation and

that is supervised and examined by a state or federal authority.

depositary bank.The first bank to which an item is transferred for collection. UCC § 4-105(2). [Cases: Banks and Banking  120, 121, 137, 158. C.J.S. Banks and Banking §§ 272–276, 322, 328,

330, 383, 395–397, 399, 402, 404.] drawee bank.See payor bank.

Federal Home Loan Bank.See FEDERAL HOME LOAN BANK.

 

federal intermediate credit bank.One of a system of 12 regional banks created in 1923 to discount obligations of agricultural credit corporations and similar institutions making short-term loans to farmers and ranchers. • The system is now merged with federal land banks to create the federal farm-credit system. [Cases: United States  53(7). C.J.S. United States §§ 90, 92–93.] federal land bank.See FEDERAL LAND BANK.

intermediary bank.A bank to which an item is transferred in the course of collection, even

though the bank is not the depositary or payor bank. UCC § 4-105(4).

investment bank.A bank whose primary purpose is to acquire financing for businesses, esp. through the sale of securities. • An investment bank does not accept deposits and, apart from selling securities, does not deal with the public at large. See INVESTMENT BANKER. [Cases:

Brokers  2. C.J.S. Brokers §§ 2–5.]

member bank.A bank that is a member of the Federal Reserve System. — Also termed reserve bank. See FEDERAL RESERVE SYSTEM. [Cases: Banks and Banking  359. C.J.S.

Banks and Banking §§ 661–662.]

mutual savings bank.A bank that has no capital stock and in which the depositors are the owners. See SAVINGS-AND-LOAN ASSOCIATION. [Cases: Banks and Banking  289; Building and Loan Associations  1. C.J.S. Banks and Banking §§ 599–600; Building and Loan

Associations, Savings and Loan Associations, and Credit Unions §§ 2–4.]

national bank.A bank incorporated under federal law and governed by a charter approved by the Comptroller of the Currency. • A national bank is permitted to use the abbreviation N.A. (national association) as part of its name. [Cases: Banks and Banking  232, 238. C.J.S. Banks and

Banking §§ 482–483, 496.]

negotiating bank.A financial institution that discounts or purchases drafts drawn under a letter of credit issued by another bank. [Cases: Banks and Banking  191. C.J.S. Bills and Notes; Letters of Credit §§ 341–366, 368–370, 372–376.]

nonbank bank.A financial institution that either accepts demand deposits or makes commercial loans, but, unlike banks, does not do both at the same time and therefore can avoid federal regulations on bank ownership. • Nonbank banks were esp. prolific in the 1980s, but amendments to the definition of a bank under federal law have essentially closed this loophole.

nonmember bank.A bank that is not a member of the Federal Reserve System. See FEDERAL RESERVE SYSTEM.

payor bank.A bank that is asked to pay the amount of a negotiable instrument and, on the bank’s acceptance, is obliged to pay that amount; a bank by which an item is payable as drawn or accepted. • Because the bank is the drawee of a draft, it is also termed a drawee bank. UCC §

4-105(3). [Cases: Banks and Banking  137, 158. C.J.S. Banks and Banking §§ 322, 328, 330, 383,

395–397, 399, 402, 404.] presenting bank.A nonpayor bank that presents a negotiable instrument for payment. UCC §

 

4-105(6). [Cases: Banks and Banking  158. C.J.S. Banks and Banking §§ 322, 383, 395–397, 399,

402, 404.]

private bank.An unincorporated banking institution owned by an individual or partnership

and, depending on state statutes, subject to or free from state regulation.

remitting bank.A payor or intermediary bank that pays or transfers an item. reserve bank.See member bank.

respondent bank.A bank, association, or other entity that exercises fiduciary powers, that holds securities on behalf of beneficial owners, and that deposits the securities for safekeeping with another bank, association, or other entity exercising fiduciary powers. SEC Rule 14a-1(k) (17 CFR § 240.14a-1(k)).

savings-and-loan bank.See SAVINGS-AND-LOAN ASSOCIATION.

savings bank.A bank that makes primarily home mortgage and some other consumer loans, receives deposits and pays interest on them, and may offer checking accounts. • Historically, savings banks did not provide any checking services. [Cases: Banks and Banking  289. C.J.S.

Banks and Banking §§ 599–600.]

state bank.A bank chartered by a state and supervised by the state banking department. • For a state bank to have FDIC insurance on deposits, it must become a member of the Federal Reserve

System. [Cases: Banks and Banking  2–6. C.J.S. Banks and Banking §§ 2–5, 7–9, 15–18.]

bank,vb.1. To keep money at <he banks at the downtown branch>.2. To deposit (funds) in a bank <she banked the prize money yesterday>.3.Slang. To loan money to facilitate (a transaction) <who banked the deal?>. • The lender’s consideration usu. consists of a fee or an interest in the property involved in the transaction.[Blacks Law 8th]