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2000 - Rules and Regulations
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Subpart FRules and Procedures Applicable to Proceedings
for Involuntary Termination of Insured Status
§ 308.119 Scope.
(a) Involuntary termination of insurance pursuant to section
8(a) of the FDIA. The rules and procedures in this subpart,
subpart B of the Local Rules and the Uniform Rules shall apply to
proceedings in connection with the involuntary termination of the
insured status of an insured bank depository institution or an insured
branch of a foreign bank pursuant to section 8(a) of the FDIA
(12 U.S.C. 1818(a)), except
that the Uniform Rules and subpart B of the Local Rules shall not apply
to the temporary suspension of insurance pursuant to section 8(a)(8) of
the FDIA (12 U.S.C. 1818(a)(8)).
(b) Involuntary termination of insurance pursuant to section
8(p) of the Act. The rules and procedures in § 308.124 of this
subpart F shall apply to proceeding in connection with the involuntary
termination of the insured status of an insured depository institution
or an insured branch of a foreign bank pursuant to section 8(p) of the
FDIA (12 U.S.C. 1818(p)). The
Uniform Rules shall not apply to proceedings under section 8(p) of the
FDIA.
[Codified to 12 C.F.R.
§ 308.119]
§ 308.120 Grounds for termination of insurance.
(a) General rule. The following are grounds for
involuntary termination of insurance pursuant to section 8(a) of the
FDIA:
(1) An insured depository institution or its directors or
trustees have engaged or are engaging in unsafe or unsound practices in
conducting the business of such depository institution;
(2) An insured depository institution is in an unsafe or unsound
condition such that it should not continue operations as an insured
depository institution; or
(3) An insured depository institution or its directors or
trustees have violated an applicable law, rule, regulation, order, or
condition imposed in writing by the FDIC in connection with the
granting of any application or other request by the insured depository
institution or have violated any written agreement entered into between
the insured depository institution and the FDIC.
(b) Extraterritorial acts of foreign banks. An act or
practice committed outside the United States by a foreign bank or its
directors or trustees which would otherwise be a ground for termination
of insured status under this section shall be a ground for termination
if the Board of Directors finds:
(1) The act or practice has been, is, or is likely to be a cause
of, or carried on in connection with or in furtherance of, an act or
practice committed within any state, territory, or possession of the
United States or the District of Columbia that, in and of itself, would
be an appropriate basis for action by the FDIC; or
(2) The act or practice committed outside the United States, if
proven, would adversely affect the insurance risk of the FDIC.
(c) Failure of foreign bank to secure removal of
personnel. The failure of a foreign bank to comply with any order
of removal or prohibition issued by the Board of Directors or the
failure of any person associated with a foreign bank to appear promptly
as a party to a proceeding pursuant to section 8(e) of the FDIA
(12 U.S.C. 1818(e)), shall be a
ground for termination of insurance of deposits in any branch of the
bank.
[Codified to 12 C.F.R.
§ 308.120]
§ 308.121 Notification to primary regulator.
(a) Service of notification. (1) Upon a determination
by the Board of Directors or its designee pursuant to § 308.120 of an
unsafe or unsound practice or condition or of a violation, a
notification shall be served upon the appropriate federal banking
agency of the insured depository institution, or the state banking
supervisor if the FDIC is the appropriate federal banking
agency.
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The notification shall be served not less than 30 days before the
Notice of Intent to Terminate Insured Status required by section
8(a)(2)(B) of the FDIA (12 U.S.C. 1818(a)(2)(B)), and § 308.122,
except that this period for notification may be reduced or eliminated
with the agreement of the appropriate federal banking agency.
(2) Appropriate Federal banking agency shall have the
meaning given that term in section 3(q) of the FDIA
(12 U.S.C. 1813 (q)), and shall
be the OCC in the case of a national bank, a District bank or an
insured federal branch of a foreign bank; the FDIC in the case of an
insured nonmember bank, including an insured state branch of a foreign
bank; the Board of Governors in the case of a state member bank; or the
OTS in the case of an insured federal or state savings association.
(3) In the case of a state nonmember bank, insured federal branch
of a foreign bank, or state member bank, in addition to service of the
notification upon the appropriate federal banking agency, a copy of the
notification shall be sent to the appropriate state banking supervisor.
(4) In instances in which a Temporary Order Suspending Insurance
is issued pursuant to section 8(a)(8) of the FDIA
(12 U.S.C. 1818(a)(8)), the
notification may be served concurrently with such order.
(b) Contents of notification. The notification shall
contain the FDIC's determination, and the facts and circumstances upon
which such determination is based, for the purpose of securing
correction of such practice, condition, or violation.
[Codified to 12 C.F.R.
§ 308.121]
§ 308.122 Notice of intent to terminate.
(a) If, after serving the notification under § 308.121, the Board
of Directors determines that any unsafe or unsound practices,
condition, or violation, specified in the notification, requires the
termination of the insured status of the insured depository
institution, the Board of Directors or its designee, if it determines
to proceed further, shall cause to be served upon the insured
depository institution a notice of its intention to terminate insured
status not less than 30 days after service of the notification, unless
a shorter time period has been agreed upon by the appropriate federal
banking agency.
(b) The Board of Directors or its designee shall cause a copy of
the notice to be sent to the appropriate federal banking agency and to
the appropriate state banking supervisor, if any.
[Codified to 12 C.F.R.
§ 308.122]
§ 308.123 Notice to depositors.
If the Board of Directors enters an order terminating the insured
status of an insured depository institution or branch, the insured
depository institution shall, on the day that order becomes final, or
on such other day as that order prescribes, mail a notification of
termination of insured status to each depositor at the depositor's last
address of record on the books of the insured depository institution or
branch. The insured depository institution shall also publish the
notification in two issues of a local newspaper of general circulation
and shall furnish the FDIC with proof of such publications. The
notification to depositors shall include information provided in
substantially the following form:
Notice
(Date) _______
1. The status of the _______ as an (insured depository
institution) (insured branch) under the provisions of the Federal
Deposit Insurance Act, will terminate as of the close of business on
the _______ day of _______ , 19 ____________________________________________ .
2. Any deposits made by you after that date, either new deposits
or additions to existing deposits, will not be insured by the Federal
Deposit Insurance Corporation.
3. Insured deposits in the (depository institution) (branch) on
the _______ day of _______ , 19 ____________________________________________ , will
continue to be insured, as provided by Federal Deposit Insurance Act,
for 2 years after the close of business on
the _______ day of _______ ,
19 ____________________________________________ .
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Provided, however, that any withdrawals after the close of business
on the _______ day of _______ , 19 ____________________________________________ ,
will reduce the insurance coverage by the amount of
such withdrawals.
________________________________________________________ (Name of (depository institution or branch)
________________________________________________________ (Address)
The notification may include any additional information on the
depository institution deems advisable, provided that the information
required by this section shall be set forth in a conspicuous manner on
the first page of the notification.
[Codified to 12 C.F.R.
§ 308.123]
§ 308.124 Involuntary termination of insured status for failure
to receive deposits.
(a) Notice to show cause. When the Board of Directors
or its designee has evidence that an insured depository institution is
not engaged in the business of receiving deposits, other than trust
funds, the Board of Directors or its designee shall give written notice
of this evidence to the depository institution and shall direct the
depository institution to show cause why its insured status should not
be terminated under the provisions of section 8(p) of the FDIA
(12 U.S.C. 1818(p)). The
insured depository institution shall have 30 days after receipt of the
notice, or such longer period as is prescribed in the notice, to submit
affidavits, other written proof, and any legal arguments that it is
engaged in the business of receiving deposits other than trust funds.
(b) Notice of termination date. If, upon consideration
of the affidavits, other written proof, and legal arguments, the Board
of Directors determines that the depository institution is not engaged
in the business of receiving deposits, other than trust funds, the
finding shall be conclusive and the Board of Directors shall notify the
depository institution that its insured status will terminate at the
expiration of the first full semiannual assessment period following
issuance of that notification.
(c) Notification to depositors of termination of insured
status. Within the time specified by the Board of Directors and
prior to the date of termination of its insured status, the depository
institution shall mail a notification of termination of insured status
to each depositor at the depositor's last address of record on the
books of the depository institution. The depository institution shall
also publish the notification in two issues of a local newspaper of
general circulation and shall furnish the FDIC with proof of such
publications. The notification to depositors shall include information
provided in substantially the following form:
Notice
(Date) _______
The status of the _______ , as an (insured depository
institution) (insured branch) under the Federal Deposit Insurance Act,
will terminate on the _______ day of _______ ,
19 ____________________________________________ , and its deposits will thereupon cease to be
insured.
________________________________________________________ (Name of depository institution or branch)
________________________________________________________ (Address)
The notification may include any additional information the
depository institution deems advisable, provided that the information
required by this section shall be set forth in a conspicuous manner on
the first page of the notification.
[Codified to 12 C.F.R.
§ 308.124]
§ 308.125 Temporary suspension of deposit insurance.
(a) If, while an action is pending under section 8(a)(2) of the
FDIA (12 U.S.C. 1818(a)(2)),
the Board of Directors, after consultation with the appropriate Federal
banking agency, finds that an insured depository institution (other
than a special supervisory association to which § 308.126 of this
subpart applies) has no tangible capital under the
{{8-16-91 p.2156}}capital guidelines or
regulations of the appropriate Federal banking agency, the Board of
Directors may issue a Temporary Order Suspending Deposit Insurance,
pending completion of the proceedings under section 8(a)(2) of the FDIA
(12 U.S.C. 1818(a)(2)).
(b) The temporary order shall be served upon the insured
institution and a copy sent to the appropriate Federal banking agency
and to the appropriate state banking supervisor.
(c) The temporary order shall become effective ten days from the
date of service upon the insured depository institution. Unless set
aside, limited, or suspended in proceedings under section 8(a)(8)(D) of
the FDIA (12 U.S.C. 1818(a)(8)(D)), the temporary order shall remain
effective and enforceable until an order terminating the insured status
of the institution is entered by the Board of Directors and becomes
final, or the Board of Directors dismisses the proceedings.
(d) Notification to depositors of suspension of insured status.
Within the time specified by the Board of Directors and prior to the
suspension of insured status, the depository institution shall mail a
notification of suspension of insured status to each depositor at the
depositor's last address of record on the books of the depository
institution. The depository institution shall also publish the
notification in two issues of a local newspaper of general circulation
and shall furnish the FDIC with proof of such publications. The
notification to depositors shall include information provided in
substantially the following form:
Notice
(Date) _______
1. The status of the _______ , as an (insured depository
institution) (insured branch) under the provisions of the Federal
Deposit Insurance Act, will be suspended as of the close of business on
the _______ day of _______ , 19 ____________________________________________ , pending
the completion of administrative proceedings under section 8(a) of the
Federal Deposit Insurance Act.
2. Any deposits made by you after that date, either new deposits
or additions to existing deposits, will not be insured by the Federal
Deposit Insurance Corporation.
3. Insured deposits in the (depository institution) (branch) on
the _______ day of _______ , 19 ____________________________________________ , will
continue to be insured for _______ after the close of business
on the _______ day of _______ , 19 ____________________________________________ .
Provided, however, that any withdrawals after the close of business on
the _______ day of _______ , 19 ____________________________________________ , will
reduce the insurance coverage by the amount of such withdrawals.
________________________________________________________ (Name of depository institution or branch)
________________________________________________________ (Address)
The notification may include any additional information the
depository institution deems advisable, provided that the information
required by this section shall be set forth in a conspicuous manner on
the first page of the notification.
[Codified to 12 C.F.R.
§ 308.125]
§ 308.126 Special supervisory associations.
If the Board of Directors finds that a savings association is a
special supervisory association under the provisions of section
8(a)(8)(B) of the FDIA (12 U.S.C.
1818(a)(8)(B)) for purposes of temporary suspension of insured
status, the Board of Directors shall serve upon the association its
findings with regard to the determination that the capital of the
association, as computed using applicable accounting standards, has
suffered a material decline; that such association or its directors or
officers, is engaging in an unsafe or unsound practice in conducting
the business of the association; that such association is in an unsafe
or unsound condition to continue operating as an insured association;
or that such association or its directors or officers, has violated any
law, rule, regulation, order, condition imposed in writing by any
federal banking agency, or any written agreement, or that the
association failed to enter into a capital improvement plan acceptable
to the Corporation prior to January 1990.
[Codified to 12 C.F.R. § 308.126]
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