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8000 - Miscellaneous Statutes and Regulations
SEC. 10. REGULATION OF HOLDING COMPANIES.
(a) DEFINITIONS.--
(1) IN GENERAL.--As used in this section, unless the
context otherwise requires--
(A) SAVINGS ASSOCIATION.--The term "savings
association" includes a savings bank or cooperative bank which is
deemed by the Director to be a savings association under subsection
(l).
(B) UNINSURED INSTITUTION.--The term "uninsured
institution" means any depository institution the deposits of which
are not insured by the Federal Deposit Insurance Corporation.
(C) COMPANY.--The term "company" means any
corporation, partnership, trust, joint-stock company, or similar
organization, but does not include the Federal Deposit Insurance
Corporation, the Resolution Trust Corporation, any Federal home loan
bank, or any company the majority of the shares of which is owned by
the United States or any State, or by an instrumentality of the United
States or any State.
(D) SAVINGS AND LOAN HOLDING COMPANY.--
(i) IN GENERAL.—EXCEPT as provided in clause (ii), the
term "savings and loan holding company" means any company that
directly or indirectly controls a savings association or that controls
any other company that is a savings and loan holding company.
(ii) EXCLUSION.--The term "savings and loan holding
company" does not include a bank holding company that is registered
under, and subject to, the Bank Holding Company Act of 1956, or to any
company directly or indirectly controlled by such company (other than a
savings association).
(E) MULTIPLE SAVINGS AND LOAN HOLDING COMPANY.--The term
"multiple savings and loan holding company" means any savings and
loan holding company which directly or indirectly controls 2 or more
savings associations.
(F) DIVERSIFIED SAVINGS AND LOAN HOLDING COMPANY.--The
term "diversified savings and loan holding company" means any
savings and loan holding company whose subsidiary savings association
and related activities as permitted under paragraph (2) of subsection
(c) of this section represented, on either an actual or a pro forma
basis, less than
{{4-30-97 p.8726.01}}50 percent of its
consolidated net worth at the close of its preceding fiscal year and of
its consolidated net earnings for such fiscal year, as determined in
accordance with regulations issued by the Director.
{{2-28-90 p.8727}}
(G) SUBSIDIARY.--The term "subsidiary" has the
same meaning as in section 3 of
the Federal Deposit Insurance Act.
(H) AFFILIATE.--The term "affiliate" of a savings
association means any person which controls, is controlled by, or is
under common control with, such savings association.
(I) BANK HOLDING COMPANY.--The terms "bank holding
company" and "bank" have the meanings given to such terms in
section 2 of the Bank Holding
Company Act of 1956.
(J) ACQUIRE.--The term "acquire" has the meaning
given to such term in section
13(f)(8) of the Federal Deposit Insurance Act.
(2) CONTROL.--For purposes of this section, a person
shall be deemed to have control of--
(A) a savings association if the person directly or indirectly or
acting in concert with one or more other persons, or through one or
more subsidiaries, owns, controls, or holds with power to vote, or
holds proxies representing, more than 25 percent of the voting shares
of such savings association, or controls in any manner the election of
a majority of the direction of such association;
(B) any other company if the person directly or indirectly
or acting in concert with one or more other persons, or through one or
more subsidiaries, owns, controls, or holds with power to vote, or
holds proxies representing, more than 25 percent of the voting shares
or rights of such other company, or controls in any manner the election
or appointment of a majority of the directors or trustees of such other
company, or is a general partner in or has contributed more than 25
percent of the capital of such other company;
(C) a trust if the person is a trustee thereof; or
(D) a savings association or any other company if the Director
determines, after reasonable notice and opportunity for hearing, that
such person directly or indirectly exercises a controlling influence
over the management or policies of such association or other company.
(3) EXCLUSIONS.--Notwithstanding any other provision of
this subsection, the term "savings and loan holding company" does
not include--
(A) any company by virtue of its ownership or control of voting
shares of a savings association or a savings and loan holding company
acquired in connection with the underwriting of securities if such
shares are held only for such period of time (not exceeding 120 days
unless extended by the Director) as will permit the sale thereof on a
reasonable basis; and
(B) any trust (other than a pension, profit-sharing,
shareholders', voting, or business trust) which controls a savings
association or a savings and loan holding company if such trust by its
terms must terminate within 25 years or not later than 21 years and 10
months after the death of individuals living on the effective date of
the trust, and is (i) in existence on June 26, 1967, or (ii) a
testamentary trust created on or after June 26, 1967.
(4) Special rule relating to qualified stock
issuance.--No savings and loan holding company shall be deemed to
control a savings association solely by reason of the purchase by such
savings and loan holding company of shares issued by such savings
association, or issued by any savings and loan holding company (other
than a bank holding company) which controls such savings association,
in connection with a qualified stock issuance if such purchase is
approved by the Director under subsection (q)(1)(D), unless the
acquiring savings and loan holding company, directly or indirectly, or
acting in concert with 1 or more other persons, or through 1 or more
subsidiaries, owns, controls, or holds with power to vote, or holds
proxies representing, more than 15 percent of the voting shares of such
savings association or holding company.
(b) REGISTRATION AND EXAMINATION.--
(1) IN GENERAL.--Within 90 days after becoming a savings
and loan holding company, each savings and loan holding company shall
register with the Director on forms prescribed by the Director, which
shall include such information, under oath or otherwise, with respect
to the financial condition, ownership, operations, management, and
intercompany relationships of such holding company and its
subsidiaries, and related matters, as the
{{2-28-90 p.8728}}Director may deem
necessary or appropriate to carry out the purposes of this section.
Upon application, the Director may extend the time within which a
savings and loan holding company shall register and file the requisite
information.
(2) REPORTS.--Each savings and loan holding company and
each subsidiary thereof, other than a savings association, shall file
with the Director, and the regional office of the Director of the
district in which its principal office is located, such reports as may
be required by the Director. Such reports shall be made under oath or
otherwise, and shall be in such form and for such periods, as the
Director may prescribe. Each report shall contain such information
concerning the operations of such savings and loan holding company and
its subsidiaries as the Director may require.
(3) BOOKS AND RECORDS.--Each savings and loan holding
company shall maintain such books and records as may be prescribed by
the Director.
(4) EXAMINATIONS.--Each savings and loan holding company
and each subsidiary thereof (other than a bank) shall be subject to
such examinations as the Director may prescribe. The cost of such
examinations shall be assessed against and paid by such holding
company. Examination and other reports may be furnished by the Director
to the appropriate State supervisory authority. The Director shall, to
the extent deemed feasible, use for the purposes of this subsection,
reports filed with or examinations made by other Federal agencies or
the appropriate State supervisory authority.
(5) AGENT FOR SERVICE OF PROCESS.--The Director may
require any savings and loan holding company, or persons connected
therewith if it is not a corporation, to execute and file a prescribed
form of irrevocable appointment of agent for service of process.
(6) RELEASE FROM REGISTRATION.--The Director may at any
time, upon the Director's own motion or upon application, release a
registered savings and loan holding company from any registration
theretofore made by such company, if the Director determines that such
company no longer has control of any savings association.
(c) HOLDING COMPANY ACTIVITIES.--
(1) PROHIBITED ACTIVITIES.--Except as otherwise provided
in this subsection, no savings and loan holding company and no
subsidiary which is not a savings association shall--
(A) engage in any activity or render any service for or on behalf
of a savings association subsidiary for the purpose or with the effect
of evading any law or regulation applicable to such savings
association;
(B) commence any business activity, other than the activities
described in paragraph (2); or
(C) continue any business activity, other than the activities
described in paragraph (2), after the end of the 2-year period
beginning on the date on which such company received approval under
subsection (e) of this section to become a savings and loan holding
company subject to the limitations contained in this subparagraph.
(2) EXEMPT ACTIVITIES.--The prohibitions of
subparagraphs (B) and (C) of paragraph (1) shall not apply to the
following business activities of any savings and loan holding company
or any subsidiary (of such company) which is not a savings association:
(A) Furnishing of performing management services for a savings
association subsidiary of such company.
(B) Conducting an insurance agency or escrow business.
(C) Holding, managing, or liquidating assets owned or acquired
from a savings association subsidiary of such company.
(D) Holding or managing properties used or occupied by a savings
association subsidiary of such company.
(E) Acting as trustee under deed of trust.
(F) Any other activity--
(i) which the Board of Governors of the Federal Reserve System,
by regulation, has determined to be permissible for bank holding
companies under section 4(c) of
the Bank Holding Company Act of 1956, unless the Director, by
regulation, prohibits or limits any such activity for savings and loan
holding companies; or
{{4-28-06 p.8729}}
(ii) in which multiple savings and loan holding companies were
authorized (by regulation) to directly engage on March 5, 1987.
(G) In the case of a savings and loan holding company,
purchasing, holding or disposing of stock acquired in connection with a
qualified stock issuance if the purchase of such stock by such savings
and loan holding company is approved by the Director pursuant to
subsection (q)(1)(D).
(3) Certain limitations on activities not applicable to
certain holding companies.--Notwithstanding paragraphs (4) and (6)
of this subsection, the limitations contained in subparagraphs (B) and
(C) of paragraph (1) shall not apply to any savings and loan holding
company (or any subsidiary of such company) which controls--
(A) only 1 savings association, if the savings association
subsidiary of such company is a qualified thrift lender (as determined
under subsection (m)); or
(B) more than 1 savings association, if--
(i) all, or all but 1, of the savings association subsidiaries of
such company were initially acquired by the company or by an individual
who would be deemed to control such company if such individual were a
company--
(I) pursuant to an acquisition under
section 13(c) or
13(k) of the Federal Deposit
Insurance Act of section 408(m) of the National Housing Act; or
(II) pursuant to an acquisition in which assistance was continued
to a savings association under section 13(i) of the Federal Deposit
Insurance Act; and
(ii) all of the savings association subsidiaries of such company
are qualified thrift lenders (as determined under subsection (m)).
(4) PRIOR APPROVAL OF CERTAIN NEW ACTIVITIES REQUIRED.--
(A) IN GENERAL.--No savings and loan holding company and
no subsidiary which is not a savings association shall commence, either
de novo or by an acquisition (in whole or in part) of a going concern,
any activity described in paragraph (2)(F)(i) of this subsection
without the prior approval of the Director.
(B) FACTORS TO BE CONSIDERED BY DIRECTOR.--In
considering any application under subparagraph (A) by any savings and
loan holding company or any subsidiary of any such company which is not
a savings association, the Director shall consider--
(i) whether the performance of the activity described in such
application by the company or the subsidiary can reasonably be expected
to produce benefits to the public (such as greater convenience,
increased competition, or gains in efficiency) that outweigh possible
adverse effects of such activity (such as undue concentration of
resources, decreased or unfair competition, conflicts of interest, or
unsound financial practices);
(ii) the managerial resources of the companies involved; and
(iii) the adequacy of the financial resources, including capital,
of the companies involved.
(C) Director may differentiate between new and ongoing
activities.--In prescribing any regulation or considering any
application under this paragraph, the Director may differentiate
between activities commenced de novo and activities commenced by the
acquisition, in whole or in part, of a going concern.
(D) APPROVAL OR DISAPPROVAL BY ORDER.--The approval or
disapproval of any application under this paragraph by the Director
shall be made in an order issued by the Director containing the reasons
for such approval or disapproval.
(5) GRACE PERIOD TO ACHIEVE COMPLIANCE.--If any savings
association referred to in paragraph (3) fails to maintain the status
of such association as a qualified thrift lender, the Director may
allow, for good cause shown, any company that controls such association
(or any subsidiary of such company which is not a savings association)
up to 3 years to comply with the limitations contained in paragraph
(1)(C).
(6) Special provisions relating to certain companies
affected by 1987 amendments.--
(A) Exception to 2-year grace period for achieving
compliance.--Notwithstanding paragraph (1)(C), any company
which received approval under subsection (e) of this section to acquire
control of a savings association between March 5, 1987, and
August
{{4-28-06 p.8730}}10, 1987, shall not
continue any business activity other than an activity described in
paragraph (2) after August 10, 1987.
(B) Exemption for activities lawfully engaged in
before March 5, 1987.--Notwithstanding paragraph (1)(C) and
subject to subparagraphs (C) and (D), any savings and loan holding
company which received approval, before March 5, 1987, under subsection
(e) of this section to acquire control of a savings association may
engage, directly or through any subsidiary (other than a savings
association subsidiary of such company), in any activity in which such
company or such subsidiary was lawfully engaged on such date.
(C) Termination of subparagraph (b)
exemption.--The exemption provided under subparagraph (B) for
activities engaged in by any savings and loan holding company or a
subsidiary of such company (which is not a savings association) which
would otherwise be prohibited under paragraph (1)(C) shall terminate
with respect to such activities of such company or subsidiary upon the
occurrence (after August 10, 1987) of any of the following:
(i) The savings and loan holding company acquires control of a
bank or an additional savings association (other than a savings
association acquired pursuant to
section 13(c) or
13(k) of the Federal Deposit
Insurance Act or section 406(f) or 408(m) of the National Housing Act).
(ii) Any savings association subsidiary of the savings and loan
holding company fails to qualify as a domestic building and loan
association under section 7701(a)(19) of the Internal Revenue Code of
1986.
(iii) The savings and loan holding company engages in any
business activity--
(I) which is not described in paragraph (2); and
(II) in which it was not engaged on March 5, 1987.
(iv) Any savings association subsidiary of the savings and loan
holding company increases the number of locations from which such
savings association conducts business after March 5, 1987 (other than
an increase which occurs in connection with a transaction under section
13(c) or (k) of the Federal Deposit Insurance Act or section 408(m) of
the National Housing Act.
(v) Any savings association subsidiary of the savings and loan
holding company permits any overdraft (including an intraday
overdraft), or incurs any such overdraft in its account at a Federal
Reserve bank, on behalf of an affiliate, unless such overdraft is the
result of an inadvertent computer or accounting error that is beyond
the control of both the savings association subsidiary and the
affiliate.
(D) Order by Director to terminate subparagraph (b)
activity.--Any activity described in subparagraph (B) may also be
terminated by the Director, after opportunity for hearing, if the
Director determines, having due regard for the purposes of this Act,
that such action is necessary to prevent conflicts of interest or
unsound practices or is in the public interest.
(7) Foreign savings and loan holding
company.--Notwithstanding any other provision of this section, any
savings and loan holding company organized under the laws of a foreign
country as of June 1, 1984 (including any subsidiary thereof which is
not a savings association), which controls a single savings association
on August 10, 1987, shall not be subject to this subsection with
respect to any activities of such holding company which are conducted
exclusively in a foreign country.
(8) EXEMPTION FOR BANK HOLDING COMPANIES.--Except for
paragraph (1)(A), this subsection shall not apply to any company that
is treated as a bank holding company for purposes of section 4 of the
Bank Holding Company Act of 1956, or any of its subsidiaries.
(9) Prevention of new affiliations between
s&L HOLDING COMPANIES AND COMMERCIAL FIRMS.--
(A) IN GENERAL.--Notwithstanding paragraph (3), no
company may directly or indirectly, including through any merger,
consolidation, or other type of business combination, acquire control
of a savings association after May 4, 1999, unless the company is
engaged, directly or indirectly (including through a subsidiary other
than a savings association), only in activities that are
permitted--
{{4-30-01 p.8731}}
(i) under paragraph (1)(C) or (2) of this subsection; or
(ii) for financial holding companies under
section 4(k) of the Bank
Holding Company Act of 1956.
(B) Prevention of new commercial
affiliations.--Notwithstanding paragraph (3), no savings and loan
holding company may engage directly or indirectly (including through a
subsidiary other than a savings association) in any activity other than
as described in clauses (i) and (ii) of subparagraph (A).
(C) Preservation of authority of existing unitary
s&L HOLDING COMPANIES.--Subparagraphs (A) and
(B) do not apply with respect to any company that was a savings and
loan holding company on May 4, 1999, or that becomes a savings and loan
holding company pursuant to an application pending before the Office on
or before that date, and that--
(i) meets and continues to meet the requirements of paragraph
(3); and
(ii) continues to control not fewer than 1 savings association
that it controlled on May 4, 1999, or that it acquired pursuant to an
application pending before the Office on or before that date, or the
successor to such savings association.
(D) CORPORATE REORGANIZATIONS PERMITTED.--This paragraph
does not prevent a transaction that--
(i) involves solely a company under common control with a savings
and loan holding company from acquiring, directly or indirectly,
control of the savings and loan holding company or any savings
association that is already a subsidiary of the savings and loan
holding company; or
(ii) involves solely a merger, consolidation, or other type of
business combination as a result of which a company under common
control with the savings and loan holding company acquires, directly or
indirectly, control of the savings and loan holding company or any
savings association that is already a subsidiary of the savings and
loan holding company.
(E) AUTHORITY TO PREVENT EVASIONS.--The Director may
issue interpretations, regulations, or orders that the Director
determines necessary to administer and carry out the purpose and
prevent evasions of this paragraph, including a determination that,
notwithstanding the form of a transaction, the transaction would in
substance result in a company acquiring control of a savings
association.
(F) Preservation of authority for family
trusts.--Subparagraphs (A) and (B) do not apply with respect to any
trust that becomes a savings and loan holding company with respect to a
savings association, if--
(i) not less than 85 percent of the beneficial ownership
interests in the trust are continuously owned, directly or indirectly,
by or for the benefit of members of the same family, or their spouses,
who are lineal descendants of common ancestors who controlled, directly
or indirectly, such savings association on May 4, 1999, or a subsequent
date, pursuant to an application pending before the Office on or before
May 4, 1999; and
(ii) at the time at which such trust becomes a savings and loan
holding company, such ancestors or lineal descendants, or spouses of
such descendants, have directly or indirectly controlled the savings
association continuously since May 4, 1999, or a subsequent date,
pursuant to an application pending before the Office on or before May
4, 1999.
(d) TRANSACTIONS WITH AFFILIATES.--Transactions between
any subsidiary savings association of a savings and loan holding
company and any affiliate (of such savings association subsidiary)
shall be subject to the limitations and prohibitions specified in
section 11 of this Act.
(e) ACQUISITIONS.--
(1) IN GENERAL.--It shall be unlawful for--
(A) any savings and loan holding company directly or indirectly,
or through one or more subsidiaries or through one or more
transactions--
(i) to acquire, except with the prior written approval of the
Director, the control of a savings association or a savings and loan
holding company, or to retain the control of
{{4-30-01 p.8732}}such an association
or holding company acquired or retained in violation of this section as
heretofore or hereafter in effect;
(ii) to acquire, except with the prior written approval of the
Director, by the process of merger, consolidation, or purchase of
assets, another savings association or a savings and loan holding
company, or all or substantially all of the assets of any such
association or holding company;
(iii) to acquire, by purchase or otherwise, or to retain, except
with the prior written approval of the Director, more than 5 percent of
the voting shares of a savings association not a subsidiary, or of a
savings and loan holding company not a subsidiary, or in the case of a
multiple savings and loan holding company (other than a company
described in subsection (c)(8)), to acquire or retain, and the Director
may not authorize acquisition or retention of, more than 5 percent of
the voting shares of any company not a subsidiary which is engaged in
any business activity other than the activities specified in subsection
(c)(2). This clause shall not apply to shares of a savings association
or of a savings and loan holding company--
(I) held as a bona fide fiduciary (whether with or without the
sole discretion to vote such shares);
(II) held temporarily pursuant to an underwriting commitment in
the normal course of an underwriting business;
(III) held in an account solely for trading purposes;
(IV) over which no control is held other than control of voting
rights acquired in the normal course of a proxy solicitation; and
(V) acquired in securing or collecting a debt previously
contracted in good faith, during the 2-year period beginning on the
date of such acquisition or for such additional time (not exceeding 3
years) as the Director may permit if the Director determines that such
an extension will not be detrimental to the public interest;
(VI) acquired under section 408(m) of the National Housing Act or
section 13(k) of the Federal
Deposit Insurance Act;
(VII) held by any insurance company, as defined in
section 2(a)(17) of the
Investment Company Act of 1940, except as provided in paragraph (6); or
(VIII) acquired pursuant to a qualified stock issuance if such
purchase is approved by the Director under subsection (q)(1)(D);
except that the aggregate amount of shares held under this clause
(other than under subclauses (I), (II), (III), (IV), and (VI)) may not
exceed 15 percent of all outstanding shares or of the voting power of a
savings association or savings and loan holding company; or
(iv) to acquire the control of an uninsured institution, or
to retain for more than one year after February 14, 1968, or from the
date on which such control was acquired, whichever is later, except
that the Director may upon application by such company extend such
one-year period from year to year, for an additional period not
exceeding 3 years, if the Director finds such extension is warranted
and is not detrimental to the public interest; and
(B) any other company, without the prior written approval of the
Director, directly or indirectly, or through one or more subsidiaries
or through one of more transactions, to acquire the control of one or
more savings associations, except that such approval shall not be
required in connection with the control of a savings association, (i)
acquired by devise under the terms of a will creating a trust which is
excluded from the definition of "savings and loan holding
company" under subsection (a) of this section, (ii) acquired in
connection with a reorganization in which a person or group of persons,
having had control of a savings association for more than 3 years,
vests control of that association in a newly formed holding company
subject to the control of the same person or group of persons, or (iii)
acquired by a bank holding company that is registered under, and
subject to, the Bank Holding Company Act of 1956, or any company
controlled by such bank holding company. The Director shall approve an
acquisition of a savings association under this subparagraph unless the
Director finds the financial and managerial resources and future
prospects of the company and association involved to be such that the
acquisition would be detrimental to
{{4-28-06 p.8732.01}}the association or
the insurance risk of the Deposit Insurance Fund, and shall render a
decision within 90 days after submission to the Director of the
complete record on the application.
Consideration of the managerial resources of a company or savings
association under subparagraph (B) shall include consideration of the
competence, experience, and integrity of the officers, directors, and
principal shareholders of the company or association.
(2) FACTORS TO BE CONSIDERED.--The Director shall not
approve any acquisition under subparagraph (A)(i) or (A)(ii), or of
more than one savings association under subparagraph (B) of paragraph
(1) of this subsection, any acquisition of stock in connection with a
qualified stock issuance, any acquisition under paragraph (4)(A), or
any transaction under section 13(k) of the Federal Deposit Insurance
Act, except in accordance with this paragraph. In every case, the
Director shall take into consideration the financial and managerial
resources and future prospects of the company and association involved,
the effect of the acquisition on the association, the insurance risk to
the Deposit Insurance Fund, and the convenience and needs of the
community to be served, and shall render a decision within 90 days
after submission to the Director of the complete record on the
application. Consideration of the managerial resources of a company or
savings association shall include consideration of the competence,
experience, and integrity of the officers, directors, and principal
shareholders of the company or association. Before approving any such
acquisition, except a transaction under
section 13(k) of the Federal
Deposit Insurance Act, the Director shall request from the Attorney
General and consider any report rendered within 30 days on the
competitive factors involved. The Director shall not approve any
proposed acquisition--
(A) which would result in a monopoly, or which would be in
furtherance of any combination or conspiracy to monopolize or to
attempt to monopolize the savings and loan business in any part of the
United States,
(B) the effect of which in any section of the country may be
substantially to lessen competition, or tend to create a monopoly, or
which in any other manner would be in restraint of trade, unless it
finds that the anticompetitive effects of the proposed acquisition are
clearly outweighed in the public interest by the probable effect of the
acquisition in meeting the convenience and needs of the community to be
served, and
(C) if the company fails to provide adequate assurances to the
Director that the company will make available to the Director such
information on the operations or activities of the company, and any
affiliate of the company, as the Director determines to be appropriate
to determine and enforce compliance with this Act, or
(D) in the case of an application involving a foreign bank, if
the foreign bank is not subject to comprehensive supervision or
regulation on a consolidated basis by the appropriate authorities in
the bank's home country.
(3) INTERSTATE ACQUISITIONS.--No acquisition shall be
approved by the Director under this subsection which will result in the
formation by any company, through one or more subsidiaries or through
one or more transactions, of a multiple savings and loan holding
company controlling savings associations in more than one State,
unless--
(A) such company, or a savings association subsidiary of such
company, is authorized to acquire control of a savings association
subsidiary, or to operate a home or branch office, in the additional
State of States pursuant to section
13(k) of the Federal Deposit Insurance Act;
(B) such company controls a savings association subsidiary which
operated a home or branch office in the additional State of States as
of March 5, 1987; or
(C) the statutes of the State in which the savings association to
be acquired is located permit a savings association chartered by such
State to be acquired by a savings association chartered by the State
where the acquiring savings association or savings and loan holding
company is located or by a holding company that controls such a State
chartered savings association, and such statutes specifically authorize
such an acquisition by language to that effect and not merely by
implication.
{{4-28-06 p.8732.02}}
(4) ACQUISITIONS BY CERTAIN INDIVIDUALS.--
(A) IN GENERAL.--Notwithstanding subsection (h)(2), any
director or officer of a savings and loan holding company, or any
individual who owns, controls, or holds with power to vote (or holds
proxies representing) more than 25 percent of the voting shares of such
holding company, may acquire control of any savings association not a
subsidiary of such savings and loan holding company with the prior
written approval of the Director.
(B) Treatment of certain holding companies.--If any
individual referred to in subparagraph (A) controls more than 1 savings
and loan holding company or more than 1 savings association, any
savings and loan holding company controlled by such individual shall be
subject to the activities limitations contained in subsection (c) to
the same extent such limitations apply to multiple savings and loan
holding companies, unless all or all but 1 of the savings associations
(including any institution deemed to be a savings association under
subsection (1) of this section) controlled directly or indirectly by
such individual was acquired pursuant to an acquisition described in
subclause (I) or (II) of subsection (c)(3)(B)(i).
{{4-28-06 p.8733}}
(5) Acquisitions pursuant to certain security
interests.--This subsection and subsection (c)(2) of this section
do not apply to any savings and loan holding company which acquired the
control of a savings association or of a savings and loan holding
company pursuant to a pledge or hypothecation to secure a loan, or in
connection with the liquidation of a loan, made in the ordinary course
of business. It shall be unlawful for any such company to retain such
control for more than one year after February 14, 1968, or from the
date on which such control was acquired, whichever is later, except
that the Director may upon application by such company extend such
one-year period from year to year, for an additional period not
exceeding 3 years, if the Director finds such extension is warranted
and would not be detrimental to the public interest.
(6) SHARES HELD BY INSURANCE AFFILIATES.--Shares
described in clause (iii)(VII) of paragraph (1)(A) shall not be
excluded for purposes of clause (iii) of such paragraph if--
(A) all shares held under such clause (iii)(VII) by all insurance
company affiliates of such savings association or savings and loan
holding company in the aggregate exceed 5 percent of all outstanding
shares or of the voting power of the savings association or savings and
loan holding company; or
(B) such shares are acquired or retained with a view to
acquiring, exercising, or transferring control of the savings
association or savings and loan holding company.
(f) DECLARATION OF DIVIDEND.--Every subsidiary savings
association of a savings and loan holding company shall give the
Director not less than 30 days' advance notice of the proposed
declaration by its directors of any dividend on its guaranty,
permanent, or other nonwithdrawable stock. Such notice period shall
commence to run from the date of receipt of such notice by the
Director. Any such dividend declared within such period, or without the
giving of such notice to the Director, shall be invalid and shall
confer no rights or benefits upon the holder of any such stock.
(g) ADMINISTRATION AND ENFORCEMENT.--
(1) IN GENERAL.--The Director is authorized to issue
such regulations and orders as the Director deems necessary or
appropriate to enable the Director to administer and carry out the
purposes of this section, and to require compliance therewith and
prevent evasions thereof.
(2) INVESTIGATIONS.--The Director may make such
investigations as the Director deems necessary or appropriate to
determine whether the provisions of this section, and regulations and
orders thereunder, are being and have been complied with by savings and
loan holding companies and subsidiaries and affiliates thereof. For the
purpose of any investigation under this section, the Director may
administer oaths and affirmations, issue subpenas, take evidence, and
require the production of any books, papers, correspondence,
memorandums, or other records which may be relevant or material to the
inquiry. The attendance of witnesses and the production of any such
records may be required from any place in any State. The Director may
apply to the United States district court for the judicial district (or
the United States court in any territory) in which any witness or
company subpenaed resides or carries on business, for enforcement of
any subpena issued pursuant to this paragraph, and such courts shall
have jurisdiction and power to order and require compliance.
(3) PROCEEDINGS.--(A) In any proceeding under subsection
(a)(2)(D) or under paragraph (5) of this subsection, the Director may
administer oaths and affirmations, take or cause to be taken
depositions, and issue subpenas. The Director may make regulations with
respect to any such proceedings. The attendance of witnesses and the
production of documents provided for in this paragraph may be required
from any place in any State or in any territory at any designated place
where such proceeding is being conducted. Any party to such proceedings
may apply to the United States District Court for the District of
Columbia, or the United States district court for the judicial district
or the United States court in any territory in which such proceeding is
being conducted, or where the witness resides or carries on business,
for enforcement of any subpena issued pursuant to this paragraph, and
such courts shall have jurisdiction and power to order and
require
{{4-28-06 p.8734}}compliance therewith.
Witnesses subpenaed under this section shall be paid the same fees and
mileage that are paid witnesses in the district courts of the United
States.
(B) Any hearing provided for in subsection (a)(2)(D) or under
paragraph (5) of this section shall be held in the Federal judicial
district or in the territory in which the principal office of the
association or other company is located unless the party afforded the
hearing consents to another place, and shall be conducted in accordance
with the provisions of chapter 5 of title 5, United States Code.
(4) INJUNCTIONS.--Whenever it appears to the Director
that any person is engaged or has engaged or is about to engage in any
acts or practices which constitute or will constitute a violation of
the provisions of this section or of any regulation or order
thereunder, the Director may bring an action in the proper United
States district court, or the United States court of any territory or
other place subject to the jurisdiction of the United States, to enjoin
such acts or practices, to enforce compliance with this section or any
regulation or order, or to require the divestiture of any acquisition
in violation of this section, or for any combination of the foregoing,
and such courts shall have jurisdiction of such actions. Upon a proper
showing an injunction, decree, restraining order, order of divestiture,
or other appropriate order shall be granted without bond.
(5) CEASE AND DESIST ORDERS.--(A) Notwithstanding any
other provision of this section, the Director may, whenever the
Director has reasonable cause to believe that the continuation by a
savings and loan holding company of any activity or of ownership or
control of any of its noninsured subsidiaries constitutes a serious
risk to the financial safety, soundness, or stability of a savings and
loan holding company's subsidiary savings association and is
inconsistent with the sound operation of a savings association or with
the purposes of this section or section
8 of the Federal Deposit Insurance Act, order the savings and
loan holding company or any of its subsidiaries, after due notice and
opportunity for hearing, to terminate such activities or to terminate
(within 120 days or such longer period as the Director directs in
unusual circumstances) its ownership or control of any such noninsured
subsidiary either by sale or by distribution of the shares of the
subsidiary to the shareholders of the savings and loan holding company.
Such distribution shall be pro rata with respect to all of the
shareholders of the distributing savings and loan holding company, and
the holding company shall not make any charge to its shareholders
arising out of such a distribution.
(B) The Director may in the Director's discretion apply to the
United States district court within the jurisdiction of which the
principal office of the company is located, for the enforcement of any
effective and outstanding order issued under this section, and such
court shall have jurisdiction and power to order and require compliance
therewith. Except as provided in subsection (j), no court shall have
jurisdiction to affect by injunction or otherwise the issuance or
enforcement of any notice or order under this section, or to review,
modify, suspend, terminate, or set aside any such notice or order.
(h) PROHIBITED ACTS.--It shall be unlawful for--
(1) any savings and loan holding company or subsidiary thereof,
or any director, officer, employee, or person owning, controlling, or
holding with power to vote, or holding proxies representing, more than
25 percent of the voting shares, of such holding company or subsidiary,
to hold, solicit, or exercise any proxies in respect of any voting
rights in a savings association which is a mutual association;
(2) any director or officer of a savings and loan holding
company, or any individual who owns, controls, or holds with power to
vote (or holds proxies representing) more than 25 percent of the voting
shares of such holding company, to acquire control of any savings
association not a subsidiary of such savings and loan holding company,
unless such acquisition is approved by the Director pursuant to
subsection (e)(4); or
(3) any individual, except with the prior approval of the
Director, to serve or act as a director, officer, or trustee of, or
become a partner in, any savings and loan holding company after having
been convicted of any criminal offense involving dishonesty or breach
of trust.
(i) PENALTIES.--
{{4-28-06 p.8735}}
(1) CRIMINAL PENALTY.--
(A) Whoever knowingly violates any provision of this section or
being a company, violates any regulation or order issued by the
Director under this section, shall be imprisoned not more than 1 year,
fined not more than $100,000 per day for each day during which the
violation continues, or both.
(B) Whoever, with the intent to deceive, defraud, or profit
significantly, knowingly violates any provision of this section shall
be fined not more than $1,000,000 per day for each day during which the
violation continues, imprisoned not more than 5 years, or both.
(2) CIVIL MONEY PENALTY.--
(A) PENALTY.--Any company which violates, and any person
who participates in a violation of, any provision of this section, or
any regulation or order issued pursuant thereto, shall forfeit and pay
a civil penalty of not more than $25,000 for each day during which such
violation continues.
(B) ASSESSMENT.--Any penalty imposed under subparagraph
(A) may be assessed and collected by the Director in the manner
provided in subparagraphs (E), (F), (G), and (I) of section 8(i)(2) of
the Federal Deposit Insurance Act for penalties imposed (under such
section) and any such assessment shall be subject to the provisions of
such section.
(C) HEARING.--The company or other person against whom
any civil penalty is assessed under this paragraph shall be afforded a
hearing if such company or person submits a request for such hearing
within 20 days after the issuance of the notice of assessment.
Section 8(h) of the Federal
Deposit Insurance Act shall apply to any proceeding under this
paragraph.
(D) DISBURSEMENT.--All penalties collected under
authority of this paragraph shall be deposited into the Treasury.
(E) VIOLATE DEFINED.--For purposes of this section, the
term "violate" includes any action (alone or with another or
others) for or toward causing, bringing about, participating in,
counseling, or aiding or abetting a violation.
(F) REGULATIONS.--The Director shall prescribe
regulations establishing such procedures as may be necessary to carry
out this paragraph.
(3) 1
CIVIL MONEY PENALTY.--
(A) PENALTY.--Any company which violates, and any person
who participates in a violation of, any provision of this section, or
any regulation or order issued pursuant thereto, shall forfeit and pay
a civil penalty of not more than $25,000 for each day during which such
violation continues.
(B) ASSESSMENT; ETC.--Any penalty imposed under
subparagraph (A) may be assessed and collected by the Director in the
manner provided in subparagraphs (E), (F), (G), and (I) of section
8(i)(2) of the Federal Deposit Insurance Act for penalties imposed
(under such section) and any such assessment shall be subject to the
provisions of such section.
(C) HEARING.--The company or other person against whom
any penalty is assessed under this paragraph shall be afforded an
agency hearing if such company or person submits a request for such
hearing within 20 days after the issuance of the notice of assessment.
Section 8(h) of the Federal
Deposit Insurance Act shall apply to any proceeding under this
paragraph.
(D) DISBURSEMENT.--All penalties collected under
authority of this paragraph shall be deposited into the Treasury.
(E) VIOLATE DEFINED.--For purposes of this section, the
term "violate" includes any action (alone or with another or
others) for or toward causing, bringing about, participating in,
counseling, or aiding or abetting a violation.
(F) REGULATIONS.--The Director shall prescribe
regulations establishing such procedures as may be necessary to carry
out this paragraph.
{{4-28-06 p.8736}}
(3) 2
NOTICE UNDER THIS SECTION AFTER SEPARATION FROM SERVICE.--The
resignation, termination of employment or participation, or separation
of an institution-affiliated party (within the meaning of
section 3(u) of the Federal
Deposit Insurance Act) with respect to a savings and loan holding
company or subsidiary thereof (including a separation caused by the
deregistration of such a company or such a subsidiary) shall not affect
the jurisdiction and authority of the Director to issue any notice and
proceed under this section against any such party, if such notice is
served before the end of the 6-year period beginning on the date such
party ceased to be such a party with respect to such holding company or
its subsidiary (whether such date occurs before, on, or after the date
of the enactment of this paragraph).
(4) 3
NOTICE UNDER THIS SECTION AFTER SEPARATION FROM SERVICE.--The
resignation, termination of employment or participation, or separation
of an institution-affiliated party (within the meaning of section 3(u)
of the Federal Deposit Insurance Act) with respect to a savings and
loan holding company or subsidiary thereof (including a separation
caused by the deregistration of such a company or such a subsidiary)
shall not affect the jurisdiction and authority of the Director to
issue any notice and proceed under this section against any such party,
if such notice is served before the end of the 6-year period beginning
on the date such party ceased to be such a party with respect to such
holding company or its subsidiary (whether such date occurs before, on,
or after the date of the enactment of this paragraph).
(j) JUDICIAL REVIEW.--Any party aggrieved by an order of
the Director under this section may obtain a review of such order by
filing in the court of appeals of the United States for the circuit in
which the principal office of such party is located, or in the United
States Court of Appeals for the District of Columbia Circuit, within 30
days after the date of service of such order, a written petition
praying that the order of the Director be modified, terminated, or set
aside. A copy of the petition shall be forthwith transmitted by the
clerk of the court to the Director, and thereupon the Director shall
file in the court the record in the proceeding, as provided in section
2112 of title 28, United States Code. Upon the filing of such petition,
such court shall have jurisdiction, which upon the filing of the record
shall be exclusive, to affirm, modify, terminate, or set aside, in
whole or in part, the order of the Director. Review of such proceedings
shall be had as provided in chapter 7 of title 5, United States Code.
The judgment and decree of the court shall be final, except that the
same shall be subject to review by the Supreme Court upon certiorari as
provided in section 1254 of title 28, United States Code.
(k) SAVINGS CLAUSE.--Nothing contained in this section,
other than any transaction approved under subsection (e)(2) of this
section or section 13 of the
Federal Deposit Insurance Act, shall be interpreted or construed as
approving any act, action, or conduct which is or has been or may be in
violation of existing law, nor shall anything herein contained
constitute a defense to any action, suit, or proceeding pending or
hereafter instituted on account of any act, action, or conduct in
violation of the antitrust laws.
(l) Treatment of FDIC Insured State Savings Banks
and Cooperative Banks as Savings Associations.--
(1) IN GENERAL--Notwithstanding any other provision of
law, a savings bank (as defined in section 3(g) of the Federal Deposit
Insurance Act) and a cooperative bank that is an insured bank (as
defined in section 3(h) of the
Federal Deposit Insurance Act) upon application shall be deemed to be a
savings association for the purpose of this section, if the Director
determines that such bank is a qualified thrift lender (as determined
under subsection (m)).
(2) Failure to maintain qualified thrift lender
status.-- If any savings bank which is deemed to be a savings
association under paragraph (1) subsequently fails to maintain its
status as a qualified thrift lender, as determined by the Director,
such bank may not thereafter be a qualified thrift lender for a period
of 5 years.
{{4-28-06 p.8737}}
(m) Qualified Thrift Lender
Test.-- 4
(1) IN GENERAL.--Except as provided in paragraphs (2)
and (7), any savings association is a qualified thrift lender if--
(A) the savings association qualifies as a domestic building and
loan association, as such term is defined in section 7701(a)(19) of the
Internal Revenue Code of 1986; or
(B)(i) the savings association's qualified thrift investments
equal or exceed 70 percent of the savings association's portfolio
assets; and
(ii) the savings association's qualified thrift investments
continue to equal or exceed 65 percent of the savings association's
portfolio assets on a monthly average basis in 9 out of every 12
months.
(2) EXCEPTIONS GRANTED BY DIRECTOR.--Notwithstanding
paragraph (1), the Director may grant such temporary and limited
exceptions from the minimum actual thrift investment percentage
requirement contained in such paragraph as the Director deems necessary
if--
(A) the Director determines that extraordinary circumstances
exist, such as when the effects of high interest rates reduce mortgage
demand to such a degree that an insufficient opportunity exists for a
savings association to meet such investment requirements; or
(B) the Director determines that--
(i) the grant of any such exception will significantly facilitate
an acquisition under section 13(c) or 13(k) of the Federal Deposit
Insurance Act;
(ii) the acquired association will comply with the transition
requirements of paragraph (7)(B), as if the date of the exemption were
the starting date for the transition period described in that
paragraph; and
(iii) the Director determines that the exemption will not have an
undue adverse effect on competing savings associations in the relevant
market and will further the purposes of this subsection.
(3) Failure to become and remain a qualified thrift
lender.--
(A) IN GENERAL.--A savings association that fails to
become or remain a qualified thrift lender shall either become one or
more banks (other than a savings bank) or be subject to subparagraph
(B), except as provided in subparagraph (D).
(B) Restrictions applicable to savings associations that are
not qualified thrift lenders.—
(i) RESTRICTIONS EFFECTIVE IMMEDIATELY.--The following
restrictions shall apply to a savings association beginning on the date
on which the savings association should have become or ceases to be a
qualified thrift lender:
(I) ACTIVITIES.--The savings association shall not make
any new investment (including an investment in a subsidiary) or engage,
directly or indirectly, in any other new activity unless that
investment or activity would be permissible for the savings association
if it were a national bank, and is also permissible for the savings
association as a savings association.
(II) BRANCHING.--The savings association shall not
establish any new branch office at any location at which a national
bank located in the savings association's home State may not establish
a branch office. For purposes of this subclause, a savings
association's home State is the State in which the savings
association's total deposits were largest on the date on which the
savings association should have become or ceased to be a qualified
thrift lender.
(III) DIVIDENDS.--the savings association shall be
subject to all statutes and regulations governing the payment of
dividends by a national bank in the same manner and to the same extent
as if the savings association were a national bank.
{{4-28-06 p.8738}}
(ii) Additional restrictions effective after 3
years.--Beginning 3 years after the date on which a savings
association should have become a qualified thrift lender, or the date
on which the savings association ceases to be a qualified thrift
lender, as applicable, the savings association shall not retain any
investment (including an investment in any subsidiary) or engage,
directly or indirectly, in any activity, unless that investment or
activity--
(I) would be permissible for the savings association if it were a
national bank; and
(II) is permissible for the savings association as a savings
association.
(C) HOLDING COMPANY REGULATION.--Any company
that controls a savings association that is subject to any provision of
subparagraph (B) shall, within one year after the date on which the
savings association should have become or ceases to be a qualified
thrift lender, register as and be deemed to be a bank holding company
subject to all of the provisions of the Bank Holding Company Act of
1956, section 8 of the Federal Deposit Insurance Act, and other
statutes applicable to bank holding companies, in the same manner and
to the same extent as if the company were a bank holding company and
the savings association were a bank, as those terms are defined in the
Bank Holding Company Act of 1956.
(D) REQUALIFICATION.--A savings association that should
have become or ceases to be a qualified thrift lender shall not be
subject to subparagraph (B) or (C) if the savings association becomes a
qualified thrift lender by meeting the qualified thrift lender
requirement in paragraph (1) for the preceding 2-year period and
remains a qualified thrift lender. If the savings association (or any
savings association that acquired all or substantially all of its
assets from that savings association) at any time thereafter ceases to
be a qualified thrift lender, it shall immediately be subject to all
provisions of subparagraphs (B) and (C) as if all the periods described
in subparagraphs (B)(ii) and (C) had expired.
(E) Exemption for specialized savings associations serving
certain military personnel.--Subparagraph (A) shall not apply
to a savings association subsidiary of a savings and loan holding
company if at least 90 percent of the customers of the savings and loan
holding company and its subsidiaries and affiliates are active or
former members in the United States military services or the widows,
widowers, divorced spouses, or current or former dependents of such
members.
(F) Exemption for certain Federal savings
associations.--This paragraph shall not apply to any Federal
savings association in existence as a Federal savings association on
the date of enactment of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989--
(i) that was chartered before October 15, 1982, as a savings bank
or a cooperative bank under State law; or
(ii) that acquired its principal assets from an association that
was chartered before October 15, 1982, as a savings bank or a
cooperative bank under State law.
(G) NO CIRCUMVENTION OF EXIT MORATORIUM.--Subparagraph
(A) of this paragraph shall not be construed as permitting any insured
depository institution to engage in any conversion transaction
prohibited under section 5(d)
of the Federal Deposit Insurance Act.
(4) DEFINITIONS.--For purposes of this subsection, the
following definitions shall apply:
(A) ACTUAL THRIFT INVESTMENT PERCENTAGE.--The term
"actual thrift investment percentage" means the percentage
determined by dividing--
(i) the amount of a savings association's qualified thrift
investments, by
(ii) the amount of the savings association's portfolio assets.
(B) PORTFOLIO ASSETS.--The term "portfolio assets"
means, with respect to any savings association, the total assets of the
savings association, minus the sum of--
(i) goodwill and other intangible assets;
(ii) the value of property used by the savings association to
conduct its business; and
{{4-28-06 p.8739}}
(iii) liquid assets of the type required to be maintained under
section 6 of the Home Owners' Loan Act, as in effect on the day before
the date of the enactment of the Financial Regulatory Relief and
Economic Efficiency Act of 2000, in an amount not exceeding the amount
equal to 20 percent of the savings association's total assets.
(C) QUALIFIED THRIFT INVESTMENTS.--
(i) IN GENERAL.--The term "qualified thrift
investments" means, with respect to any savings association, the
assets of the savings association that are described in clauses (ii)
and (iii).
(ii) ASSETS INCLUDIBLE WITHOUT LIMIT.--The following
assets are described in this clause for purposes of cause (i):
(I) the aggregate amount of loans held by the savings association
that were made to purchase, refinance, construct, improve, or repair
domestic residential housing or manufactured housing.
(II) Home-equity loans.
(III) Securities backed by or representing an interest in
mortgages on domestic residential housing or manufactured housing.
(IV) Existing obligations of deposit insurance
agencies.--Direct or indirect obligations of the Federal Deposit
Insurance Corporation or the Federal Savings and Loan Insurance
Corporation issued in accordance with the terms of agreements entered
into prior to July 1, 1989, for the 10-year period beginning on the
date of issuance of such obligations.
(V) New obligations of deposit insurance
agencies.--Obligations of the Federal Deposit Insurance
Corporation, the Federal Savings and Loan Insurance Corporation, the
FSLIC Resolution Fund, and the Resolution Trust Corporation issued in
accordance with the terms of agreements entered into on or after July
1, 1989, for the 5-year period beginning on the date of issuance of
such obligations.
(VI) Shares of stock issued by any Federal home loan bank.
(VII) Loans for educational purposes, loans to small businesses,
and loans made through credit cards or credit card accounts.
(iii) Assets includible subject to percentage
restriction.--The following assets are described in this clause for
purposes of clause (i):
(I) 50 percent of the dollar amount of the residential mortgage
loans originated by such savings association and sold within 90 days of
origination.
(II) Investments in the capital stock or obligations of, and any
other security issued by, any service corporation if such service
corporation derives at least 80 percent of its annual gross revenues
from activities directly related to purchasing, refinancing,
constructing, improving, or repairing domestic residential real estate
or manufactured housing.
(III) 200 percent of the dollar amount of loans and investments
made to acquire, develop, and construct 1- to 4-family residences the
purchase price of which is or is guaranteed to be greater than 60
percent of the median value of comparable newly constructed 1- to
4-family residences within the local community in which such real
estate is located, except that not more than 25 percent of the amount
included under this subclause may consist of commercial properties
related to the development if those properties are directly related to
providing services to residents of the development.
(IV) 200 percent of the dollar amount of loans for the
acquisition or improvement of residential real property, churches,
schools, and nursing homes located within, and loans for any other
purpose to any small businesses located within any area which has been
identified by the Director, in connection with any review or
examination of community reinvestment practices, as a geographic area
or neighborhood in which the credit needs of the low- and
moderate-income residents of such area or neighborhood are not being
adequately met.
(V) Loans for the purchase or construction of churches, schools,
nursing homes, and hospitals, other than those qualifying under clause
(IV), and loans for the improvement and upkeep of such
properties.
{{4-28-06 p.8740}}
(VI) Loans for personal, family, or household purposes (other
than loans for personal, family, or household purposes described in
clause (ii)(VII)).
(VII) Shares of stock issued by the Federal Home Loan Mortgage
Corporation or the Federal National Mortgage Association.
(iv) Percentage restriction applicable to certain
assets.--The aggregate amount of the assets described in clause
(iii) which may be taken into account in determining the amount of the
qualified thrift investments of any savings association shall not
exceed the amount which is equal to 20 percent of a savings
association's portfolio assets.
(v) The term "qualified thrift investments" excludes--
(I) except for home equity loans, that portion of any loan or
investment that is used for any purpose other than those expressly
qualifying under any subparagraph of clause (ii) or (iii); or
(II) goodwill or any other intangible asset.
(D) CREDIT CARD.--The Director shall issue such
regulations as may be necessary to define the term "credit card".
(E) SMALL BUSINESS.--The Director shall issue such
regulations as may be necessary to define the term "small
business".
(5) CONSISTENT ACCOUNTING REQUIRED.—
(A) In determining the amount of a savings association's
portfolio assets, the assets of any subsidiary of the savings
association shall be consolidated with the assets of the savings
association if--
(i) Assets of the subsidiary are consolidated with the assets of
the savings association in determining the savings association's
qualified thrift investments; or
(ii) Residential mortgage loans originated by the subsidiary are
included pursuant to paragraph (4)(C)(iii)(I) in determining the
savings association's qualified thrift investments.
(B) In determining the amount of a savings association's
portfolio assets and qualified thrift investments, consistent
accounting principles shall be applied.
(6) Special rules for puerto rico and virgin islands savings
associations.—
(A) PUERTO RICO SAVINGS ASSOCIATIONS.--With respect to
any savings association headquartered and operating primarily in Puerto
Rico--
(i) the term "qualified thrift investments" includes in
addition to the items specified in paragraph (4)--
(I) the aggregate amount of loans for personal, family,
educational, or household purposes made to persons residing or
domiciled in the Commonwealth of Puerto Rico; and
(II) the aggregate amount of loans for the acquisition or
improvement of churches, schools, or nursing homes, and of loans to
small businesses, located within the Commonwealth of Puerto Rico; and
(ii) the aggregate amount of loans related to the purchase,
acquisition, development and construction of 1- to 4-family residential
real estate--
(I) which is located within the Commonwealth of Puerto Rico; and
(II) the value of which (at the time of acquisition or upon
completion of the development and construction) is below the median
value of newly constructed 1- to 4- family residences in the
Commonwealth of Puerto Rico, which may be taken into account in
determining the amount of the qualified thrift investments and of such
savings association shall be doubled.
(B) VIRGIN ISLANDS SAVINGS ASSOCIATIONS.--With respect
to any savings association headquartered and operating primarily in the
Virgin Islands--
(i) the term "qualified thrift investments" includes, in
addition to the items specified in paragraph (4)--
{{4-28-06 p.8740.01}}
(I) the aggregate amount of loans for personal, family,
educational, or household purposes made to persons residing or
domiciled in the Virgin Islands; and
(II) the aggregate amount of loans for the acquisition or
improvement of churches, schools, or nursing homes, and of loans to
small businesses, located within the Virgin Islands; and
(ii) the aggregate amount of loans related to the purchase,
acquisition, development and construction of 1- to 4-family residential
real estate--
(I) which is located within the Virgin Islands; and
(II) the value of which (at the time of acquisition or upon
completion of the development and construction) is below the median
value of newly constructed 1- to 4-family residences in the Virgin
Islands, which may be taken into account in determining the amount of
the qualified thrift investments and of such savings association shall
be doubled.
(7) Transitional rule for certain savings
associations.--
(A) IN GENERAL.--If any Federal savings association in
existence as a Federal savings association on the date of enactment of
the Financial Institutions Reform, Recovery, and Enforcement Act of
1989--
(i) that was chartered as a savings bank or a cooperative bank
under State law before October 15, 1982; or
(ii) that acquired its principal assets from an association that
was chartered before October 15, 1982, as a savings bank or a
cooperative bank under State law,
meets the requirements of subparagraph (B), such savings association
shall be treated as a qualified thrift lender during the period ending
on September 30, 1995.
(B) SUBPARAGRAPH (B) REQUIREMENTS.--A savings
association meets the requirements of this subparagraph if, in the
determination of the Director--
(i) the actual thrift investment percentage of such association
does not, after the date of enactment of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989, decrease below the
actual thrift investment percentage of such association on July 15,
1989; and
(ii) the amount by which--
(I) the actual thrift investment percentage of such association
at the end of each period described in the following table, exceeds
(II) the actual thrift investment percentage of such association
on July 15, 1989,
is equal to or greater than the applicable percentage (as determined
under the following table) of the amount by which 70 percent exceeds
the actual thrift investment percentage of such association on such
date of enactment:
| For the
following period: |
The applicable percentage is:
|
|---|
| July 1, 1991-September 30, 1992 |
25 percent
|
| October 1, 1992-March 31, 1994 |
50 percent |
| April 1,
1994-September 30, 1995 |
75 percent |
| Thereafter |
100
percent
|
(C) For purposes of this paragraph, the actual thrift
investment percentage of an association on July 15, 1989, shall be
determined by applying the definition of "actual thrift investment
percentage" that takes effect on July 1, 1991.
(n) TYING RESTRICTIONS.--A savings and loan holding
company and any of its affiliates shall be subject to section 5(q) and
regulations prescribed under such section, in connection with
transactions involving the products or services of such company or
affiliate and those of an affiliated savings association as if such
company or affiliate were a savings association.
(o) MUTUAL HOLDING COMPANIES.—
(1) IN GENERAL.--A savings association operating in
mutual form may reorganize so as to become a holding company
by--
{{4-28-06 p.8740.02}}
(A) chartering an interim savings association, the stock of which
is to be wholly owned, except as otherwise provided in this section, by
the mutual association; and
(B) transferring the substantial part of its assets and
liabilities, including all of its insured liabilities, to the interim
savings association.
(2) Directors and certain account holders' approval of plan
required.--A reorganization is not authorized under this subsection
unless--
(A) a plan providing for such reorganization has been approved by
a majority of the board of directors of the mutual savings association;
and
(B) in the case of an association in which holders of accounts
and obligors exercise voting rights, such plan has been submitted to
and approved by a majority of such individuals at a meeting held at the
call of the directors in accordance with the procedures prescribed by
the association's charter and bylaws.
(3) NOTICE TO THE DIRECTOR; DISAPPROVAL PERIOD.—
(A) NOTICE REQUIRED.--At least 60 days prior to taking
any action described in paragraph (1), a savings association seeking to
establish a mutual holding company shall provide written notice to the
Director. The notice shall contain such relevant information as the
Director shall require by regulation or by specific request in
connection with any particular notice.
(B) TRANSACTION ALLOWED IF NOT DISAPPROVED.--Unless the
Director within such 60-day notice period disapproves the proposed
holding company formation, or extends for another 30 days the period
during which such disapproval may be issued, the savings association
providing such notice may proceed with the transaction, if the
requirements of paragraph (2) have been met.
(C) GROUNDS FOR DISAPPROVAL.--The Director may
disapprove any proposed holding company formation only if--
(i) such disapproval is necessary to prevent unsafe or unsound
practices;
(ii) the financial or management resources of the savings
association involved warrant disapproval;
(iii) the savings association fails to furnish the information
required under subparagraph (A); or
(iv) the savings association fails to comply with the requirement
of paragraph (2).
(D) RETENTION OF CAPITAL ASSETS.--In connection with the
transaction described in paragraph (1), a savings association may,
subject to the approval of the Director, retain capital assets at the
holding company level to the extent that such capital exceeds the
association's capital requirement established by the Director pursuant
to subsections (s) and (t) of section 5.
{{4-30-97 p.8740.02-A}}
(4) OWNERSHIP.—
(A) IN GENERAL.--Persons having ownership rights in the
mutual association pursuant to section 5(b)(1)(B) of this Act or State
law shall have the same ownership rights with respect to the mutual
holding company.
(B) HOLDERS OF CERTAIN ACCOUNTS.--Holders of savings,
demand or other accounts of--
(i) a savings association chartered as part of a transaction
described in paragraph (1); or
(ii) a mutual savings association acquired pursuant to paragraph
(5)(B),
{{12-30-99 p.8740.03}}shall have the same
ownership rights with respect to the mutual holding company as persons
described in subparagraph (A) of this paragraph.
(5) PERMITTED ACTIVITIES--A mutual holding company may
engage only in the following activities:
(A) Investing in the stock of a savings association.
(B) Acquiring a mutual association through the merger of such
association into a savings association subsidiary of such holding
company or an interim savings association subsidiary of such holding
company.
(C) Subject to paragraph (6), merging with or acquiring another
holding company, one of whose subsidiaries is a savings association.
(D) Investing in a corporation the capital stock of which is
available for purchase by a savings association under Federal law or
under the law of any State where the subsidiary savings association or
associations have their home offices.
(E) Engaging in the activities described in subsection (c)(2) or
(c)(9)(A)(ii).
(6) Limitations on certain activities of acquired holding
companies.—
(A) NEW ACTIVITIES.--If a mutual holding company
acquires or merges with another holding company under paragraph (5)(C),
the holding company acquired or the holding company resulting from such
merger or acquisition may only invest in assets and engage in
activities which are authorized under paragraph (5).
(B) Grace period for divesting prohibited assets or
discontinuing prohibited activities.--Not later than 2 years
following a merger or acquisition described in paragraph (5)(C), the
acquired holding company or the holding company resulting from such
merger or acquisition shall--
(i) dispose of any asset which is an asset in which a mutual
holding company may not invest under paragraph (5); and
(ii) cease any activity which is an activity in which a mutual
holding company may not engage under paragraph (5).
(7) REGULATION.--A mutual holding company shall be
chartered by the Director and shall be subject to such regulations as
the Director may prescribe. Unless the context otherwise requires, a
mutual holding company shall be subject to the other requirements of
this section regarding regulation of holding companies.
(8) CAPITAL IMPROVEMENT.—
(A) Pledge of stock of savings association
subsidiary.--This section shall not prohibit a mutual holding
company from pledging all or a portion of the stock of a savings
association chartered as part of a transaction described in paragraph
(1) to raise capital for such savings association.
(B) ISSUANCE OF NONVOTING SHARES.--This section shall
not prohibit a savings association chartered as part of a transaction
described in paragraph (1) from issuing any nonvoting shares or less
than 50 percent of the voting shares of such association to any person
other than the mutual holding company.
(9) INSOLVENCY AND LIQUIDATION.—
(A) IN GENERAL.--Notwithstanding any provision of law,
upon--
(i) the default of any savings association--
(I) the stock of which is owned by any mutual holding company;
and
(II) which was chartered in a transaction described in paragraph
(1);
(ii) the default of a mutual holding company; or
(iii) a foreclosure on a pledge by a mutual holding company
described in paragraph (8)(A),
a trustee shall be appointed receiver of such mutual holding company
and such trustee shall have the authority to liquidate the assets of,
and satisfy the liabilities of, such mutual holding company pursuant to
title 11, United States Code.
(B) DISTRIBUTION OF NET PROCEEDS.--Except as provided in
subparagraph (C), the net proceeds of any liquidation of any mutual
holding company pursuant to
{{12-30-99 p.8740.04}}subparagraph (A)
shall be transferred to persons who hold ownership interests in such
mutual holding company.
(C) RECOVERY BY CORPORATION.--If the Corporation incurs
a loss as a result of the default of any savings association subsidiary
of a mutual holding company which is liquidated pursuant to
subparagraph (A), the Corporation shall succeed to the ownership
interests of the depositors of such savings association in the mutual
holding company, to the extent of the Corporation's loss.
(10) DEFINITIONS.--For purposes of this subsection--
(A) MUTUAL HOLDING COMPANY.--The term "mutual holding
company" means a corporation organized as a holding company under
this subsection.
(B) MUTUAL ASSOCIATION.--The term "mutual
association" means a savings association which is operating in
mutual form.
(C) DEFAULT.--The term "default" means an
adjudication or other official determination of a court of competent
jurisdiction or other public authority pursuant to which a conservator,
receiver, or other legal custodian is appointed.
(p) Holding Company Activities Constituting Serious Risk to
Subsidiary Savings Association.—
(1) DETERMINATION AND IMPOSITION OF RESTRICTIONS.--If
the Director determines that there is reasonable cause to believe that
the continuation by a savings and loan holding company of any activity
constitutes a serious risk to the financial safety, soundness, or
stability of a savings and loan holding company's subsidiary savings
association, the Director may impose such restrictions as the Director
determines to be necessary to address such risk. Such restrictions
shall be issued in the form of a directive to the holding company and
any of its subsidiaries, limiting--
(A) the payment of dividends by the savings association;
(B) transactions between the savings association, the holding
company, and the subsidiaries or affiliates of either; and
(C) any activities of the savings association that might create a
serious risk that the liabilities of the holding company and its other
affiliates may be imposed on the savings association.
Such directive shall be effective as a cease and desist order that
has become final.
(2) REVIEW OF DIRECTIVE.--
(A) ADMINISTRATIVE REVIEW.--After a directive referred
to in paragraph (1) is issued, the savings and loan holding company, or
any subsidiary of such holding company subject to the directive, may
object and present in writing its reasons why the directive should be
modified or rescinded. Unless within 10 days after receipt of such
response the Director affirms, modifies, or rescinds the directive,
such directive shall automatically lapse.
(B) Judicial review.--If the Director affirms or modifies a
directive pursuant to subparagraph (A), any affected party may
immediately thereafter petition the United States district court for
the district in which the savings and loan holding company had its main
office or in the United States District Court for the District of
Columbia to stay, modify, terminate or set aside the directive. Upon a
showing of extraordinary cause, the savings and loan holding company,
or any subsidiary of such holding company subject to a directive, may
petition a United States district court for relief without first
pursuing or exhausting the administrative remedies set forth in this
paragraph.
(q) Qualified Stock Issuance by Undercapitalized Savings
Associations or Holding Companies.—
(1) IN GENERAL.--For purposes of this section, any issue
of shares of stock shall be treated as a qualified stock issuance if
the following conditions are met:
(A) The shares of stock are issued by--
(i) an undercapitalized savings association; or
(ii) a savings and loan holding company which is not a bank
holding company but which controls an undercapitalized savings
association if, at the time of issuance, the savings and loan holding
company is legally obligated to contribute the net proceeds
from
{{2-28-92 p.8740.05}}the issuance of such
stock to the capital of an undercapitalized savings association
subsidiary of such holding company.
(B) All shares of stock issued consist of previously unissued
stock or treasury shares.
(C) All shares of stock issued are purchased by a savings and
loan holding company that is registered, as of the date of purchase,
with the Director in accordance with the provisions of subsection
(b)(1) of this section.
(D) Subject to paragraph (2), the Director approved the purchase
of the shares of stock by the acquiring savings and loan holding
company.
(E) The entire consideration for the stock issued is paid in cash
by the acquiring savings and loan holding company.
(F) At the time of the stock issuance, each savings association
subsidiary of the acquiring savings and loan holding company (other
than an association acquired in a transaction pursuant to
subsection (c) or
(k) of section 13 of the
Federal Deposit Insurance Act or section 408(m) of the National Housing
Act) has capital (after deducting any subordinated debt, intangible
assets, and deferred, unamortized gains or losses) of not less than
61/2 percent of the total assets of such savings association.
(G) Immediately after the stock issuance, the acquiring savings
and loan holding company holds not more than 15 percent of the
outstanding voting stock of the issuing undercapitalized savings
association or savings and loan holding company.
(H) Not more than one of the directors of the issuing association
or company is an officer, director, employee, or other representative
of the acquiring company or any of its affiliates.
(I) Transactions between the savings association or savings and
loan holding company that issues the shares pursuant to this section
and the acquiring company and any of its affiliates shall be subject to
the provisions of section 11.
(2) APPROVAL OF ACQUISITIONS.—
(A) ADDITIONAL CAPITAL COMMITMENTS NOT REQUIRED.--The
Director shall not disapprove any application for the purchase of stock
in connection with a qualified stock issuance on the grounds that the
acquiring savings and loan holding company has failed to undertake to
make subsequent additional capital contributions to maintain the
capital of the undercapitalized savings association at or above the
minimum level required by the Director or any other Federal agency
having jurisdiction.
(B) OTHER CONDITIONS.--Notwithstanding subsection
(a)(4), the Director may impose such conditions on any approval of an
application for the purchase of stock in connection with a qualified
stock issuance as the Director determines to be appropriate,
including--
(i) a requirement that any savings association subsidiary of the
acquiring savings and loan holding company limit dividends paid to such
holding company for such period of time as the Director may require;
and
(ii) such other conditions as the Director deems necessary or
appropriate to prevent evasions of this section.
(C) Application deemed approved if not disapproved within 90
days.--An application for approval of a purchase of stock in
connection with a qualified stock issuance shall be deemed to have been
approved by the Director if such application has not been disapproved
by the Director before the end of the 90-day period beginning on the
date such application has been deemed sufficient under regulations
issued by the Director.
(3) NO LIMITATION ON CLASS OF STOCK ISSUED.--The shares
of stock issued in connection with a qualified stock issuance may be
shares of any class.
(4) UNDERCAPITALIZED SAVINGS ASSOCIATION DEFINED.--For
purposes of this subsection, the term "undercapitalized savings
association" means any savings association--
(A) the assets of which exceed the liabilities of such
association; and
(B) which does not comply with one or more of the capital
standards in effect under section 5(t).
(r) Penalty for Failure To Provide Timely and Accurate
Reports.—
{{2-28-92 p.8740.06}}
(1) FIRST TIER.--Any savings and loan holding company,
and any subsidiary of such holding company, which--
(A) maintains procedures reasonably adapted to avoid any
inadvertent and unintentional error and, as a result of such an error--
(i) fails to submit or publish any report or information required
under this section or regulations prescribed by the Director, within
the period of time specified by the Director; or
(ii) submits or publishes any false or misleading report or
information; or
(B) inadvertently transmits or publishes any report which is
minimally late,
shall be subject to a penalty of not more than $2,000 for each day
during which such failure continues or such false or misleading
information is not corrected. Such holding company or subsidiary shall
have the burden of proving by a preponderance of the evidence that an
error was inadvertent and unintentional and that a report was
inadvertently transmitted or published late.
(2) Second tier.--Any savings and loan holding company, and
any subsidiary of such holding company, which--
(A) fails to submit or publish any report or information required
under this section or under regulations prescribed by the Director,
within the period of time specified by the Director; or
(B) submits or publishes any false or misleading report or
information,
in a manner not described in paragraph (1) shall be subject to a
penalty of not more than $20,000 for each day during which such failure
continues or such false or misleading information is not corrected.
(3) THIRD TIER.--If any savings and loan holding company
or any subsidiary of such a holding company knowingly or with reckless
disregard for the accuracy of any information or report described in
paragraph (2) submits or publishes any false or misleading report or
information, the Director may assess a penalty of not more than
$1,000,000 or 1 percent of total assets of such company or subsidiary,
whichever is less, per day for each day during which such failure
continues or such false or misleading information is not corrected.
(4) ASSESSMENT.--Any penalty imposed under paragraph
(1), (2), or (3) shall be assessed and collected by the Director in the
manner provided in subparagraphs (E), (F), (G), and (I) of section
8(i)(2) of the Federal Deposit Insurance Act (for penalties imposed
under such section) and any such assessment (including the
determination of the amount of the penalty) shall be subject to the
provisions of such subsection.
(5) HEARING.--Any savings and loan holding company or
any subsidiary of such a holding company against which any penalty is
assessed under this subsection shall be afforded a hearing if such
savings and loan holding company or such subsidiary, as the case may
be, submits a request for such hearing within 20 days after the
issuance of the notice of assessment. Section 8(h) of the Federal
Deposit Insurance Act shall apply to any proceeding under this
subsection.
(t) *
MERGERS, CONSOLIDATIONS, AND OTHER ACQUISITIONS AUTHORIZED.--
(1) IN GENERAL.--Subject to
sections 5(d)(8) and
18(c) of the Federal Deposit
Insurance Act and all other applicable laws, any Federal savings
association may acquire or be acquired by any insured depository
institution.
(2) EXPEDITED APPROVAL OF ACQUISITIONS.--
(A) IN GENERAL.--Any application by a savings
association to acquire or be acquired by another insured depository
institution which is required to be filed with the Director under
section 5(d)(3) of the Federal Deposit Insurance Act or any other
applicable law or regulation shall be approved or disapproved in
writing by the Director before the end of the 60-day period beginning
on the date such application is filed with the agency.
(B) EXTENSION OF PERIOD.--The period for approval or
disapproval referred to in subparagraph (A) may be extended for an
additional 30-day period if the Director determines that--
{{4-28-06 p.8740.07}}
(i) an applicant has not furnished all of the information
required to be submitted; or
(ii) in the Director's judgment any material information
submitted is substantially inaccurate or incomplete.
(3) ACQUIRE DEFINED.--For purposes of this subsection,
the term "acquire" means to acquire, directly or indirectly,
ownership or control through a merger or consolidation or an
acquisition of assets or assumption of liabilities, provided that
following such merger, consolidation, or acquisition, an acquiring
insured depository institution may not own the shares of the acquired
insured depository institution.
(4) REGULATIONS.--
(A) REQUIRED.--The Director shall prescribe such
regulations as may be necessary to carry out paragraph (1).
(B) EFFECTIVE DATE.--The regulations required under
subparagraph (A) shall--
(i) be prescribed in final form before the end of the 90-day
period beginning on the date of the enactment of this subsection; and
(ii) take effect before the end of the 120-day period beginning
on such date.
(5) LIMITATION.--No provision of this section shall be
construed to authorize a national bank or any subsidiary thereof to
engage in any activity not otherwise authorized under the National Bank
Act or any other law governing the powers of a national bank.
(t) EXEMPTION FOR BANK HOLDING COMPANIES.--This section
shall not apply to a bank holding company that is subject to the Bank
Holding Company Act of 1956, or any company controlled by such bank
holding company.
[Codified to 12 U.S.C. 1467a]
[Source: Sections 301 and 303(a) of title III and sections 905(j)
and 907(k) of title IX of the Act of August 9, 1989 (Pub. L. No.
101--73; 103 Stat. 318, 343, 462 and 476, respectively), effective
August 9, 1989, except that subsection (m) is effective July 1, 1991;
as amended by section 211 of title II, sections 437, 438, 439 and 440
of title IV, and section 502(a) of title V of the Act of December 19,
1991 (Pub. L. No. 102--242; 105 Stat. 2298, 2381 and 2392,
respectively), effective December 19, 1991; section 1077 of title X of
the Act of September 23, 1996 (Pub. L. No. 104--201; 110 Stat. 2664),
effective September 23, 1996; sections 2203(a)-(c) and 2303(e) and (g)
of title II of the Act of September 30, 1996 (Pub. L. No. 104-208; 110
Stat. 3009-403, 3009-404, 3009-424, and 3009-425, respectively),
effective September 30, 1996; sections 401(a) and (b) of title IV of
the Act of November 12, 1999 (Pub. L. No. 106-102; 113 Stat. 1434 and
1436), effective November 12, 1999; section 604(d) of title VI of the
Act of November 12, 1999 (Pub. L. No. 106--102; 113 Stat. 1452),
effective November 12, 1999; sections 1201(b)(2) and 1202 of title XII
of the Act of December 27, 2000 (Pub. L. No. 106--569; 114 Stat.
3032), effective December 27, 2000; section 9(e)(2) of the Act of
February 15, 2006 (Pub. L. No. 107--193; 119 Stat. 3617), effective
shall take effect on the date of the merger of the Bank Insurance Fund
and the Savings Association Insurance Fund pursuant to the Federal
Deposit Insurance Reform Act of
2005]
1So in statute. Go Back to Text
2So in statute. Go Back to Text
3So in statute. Go Back to Text
4The effective date for subsection (m) is July 1, 1991. Go Back to Text
*Editor's Note: So in statute as enacted. Should
probably be "(s)". Go Back to Text
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