§ 1464 Bank Borrowing For U.S. Bonds

• •Only commercial banks can use this borrowing power.
• •The borrowed money must be used to buy U.S. bonds, Treasury certificates, notes, or other U.S. obligations.
• •The borrowing is allowed only for that specific purpose.

A bank wants to invest its customers' deposits in a safe way, so it borrows funds to purchase U.S. Treasury bonds.

The bank can do this because the law specifically allows borrowing for the purpose of buying U.S. Treasury securities.