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2000 - Rules and Regulations
Subpart R—Submission and Review of Safety and Soundness
Compliance Plans and Issuance of Orders to Correct Safety and Soundness
Deficiencies
§ 308.300 Scope.
The rules and procedures set forth in this subpart apply to insured
state nonmember banks and to state-licensed insured branches of foreign
banks, that are subject to the provisions of section 39 of the Federal
Deposit Insurance Act (section 39)
(12 U.S.C. 1831p--1).
[Codified to 12 CFR § 308.300]
[Section 308.300 added at 60 Fed. Reg. 35684, July 10,
1995, effective August 9, 1995]
§ 308.301 Purpose.
Section 39 of the FDI Act requires the FDIC to establish safety and
soundness standards. Pursuant to section 39, a bank may be required to
submit a compliance plan if it is not in compliance with a safety and
soundness standard established by guideline under section 39(a) or (b).
An enforceable order under section 8 of the FDI Act may be issued if,
after being notified that it is in violation of a safety and soundness
standard established under
{{6-30-05 p.2166.17}}section 39, the bank fails to
submit an acceptable compliance plan or fails in any material respect
to implement an accepted plan. This subpart establishes procedures for
requiring submission of a compliance plan and issuing an enforceable
order pursuant to section 39.
[Codified to 12 C.F.R. § 308.301]
[Section 308.301 added at 60 Fed. Reg. 35684, July 10,
1995, effective August 9, 1995]
§ 308.302 Determination and notification of failure to meet a
safety and soundness standard and request for compliance plan.
(a) Determination. The FDIC may, based upon an
examination, inspection or any other information that becomes available
to the FDIC, determine that a bank has failed to satisfy the safety and
soundness standards set out in part
364 of this chapter and in the Interagency Guidelines
Establishing Standards for Safety and Soundness in
appendix A and the
Interagency Guidelines Establishing Information Security Standards in
appendix B to part
364 of this chapter.
(b) Request for compliance plan. If the FDIC determines
that a bank has failed a safety and soundness standard pursuant to
paragraph (a) of this section, the FDIC may request, by letter or
through a report of examination, the submission of a compliance plan
and the bank shall be deemed to have notice of the request three days
after mailing of the letter by the FDIC or delivery of the report of
examination.
[Codified to 12 C.F.R. § 308.302]
[Section 308.302 added at 60 Fed. Reg. 35684, July 10,
1995, effective August 9, 1995; amended at 66 Fed. Reg. 8638, February
1, 2001, effective July 1, 2001]
§ 308.303 Filing of safety and soundness compliance plan.
(a) Schedule for filing compliance plan--(1) In
general. A bank shall file a written safety and soundness
compliance plan with the FDIC within 30 days of receiving a request for
a compliance plan pursuant to § 308.302(b), unless the FDIC notifies
the bank in writing that the plan is to be filed within a different
period.
(2) Other plans. If a bank is obligated to file, or is
currently operating under, a capital restoration plan submitted
pursuant to section 38 of the FDI Act
(12 U.S.C. 1831o), a
cease-and-desist order entered into pursuant to section 8 of the FDI
Act, a formal or informal agreement, or a response to a report of
examination or report of inspection, it may, with the permission of the
FDIC, submit a compliance plan under this section as part of that plan,
order, agreement, or response, subject to the deadline provided in
paragraph (a)(1) of this section.
(b) Contents of plan. The compliance plan shall include
a description of the steps the bank will take to correct the deficiency
and the time within which those steps will be taken.
(c) Review of safety and soundness compliance plans.
Within 30 days after receiving a safety and soundness compliance
plan under this subpart, the FDIC shall provide written notice to the
bank of whether the plan has been approved or seek additional
information from the bank regarding the plan. The FDIC may extend the
time within which notice regarding approval of a plan will be provided.
(d) Failure to submit or implement a compliance
plan--(1) Supervisory actions. If a bank fails to
submit an acceptable plan within the time specified by the FDIC or
fails in any material respect to implement a compliance plan, then the
FDIC shall, by order, require the bank to correct the deficiency and
may take further actions provided in section 39(e)(2)(B). Pursuant to
section 39(e)(3), the FDIC may be required to take certain actions if
the bank commenced operations or experienced a change in control within
the previous 24-month period, or the bank experienced extraordinary
growth during the previous 18-month period.
(2) Extraordinary growth. For purposes of paragraph
(d)(1) of this section, extraordinary growth means an increase in
assets of more than 7.5 percent during any quarter within the 18-month
period preceding the issuance of a request for submission of a
compliance plan, by a bank that is not well capitalized for purposes of
section 38 of the FDI Act. For purposes of calculating an increase in
assets, assets acquired through merger or acquisition approved pursuant
to the Bank Merger Act (12 U.S.C.
1828(c)) will be excluded.
{{6-30-05 p.2166.18}}
(e) Amendment of compliance plan. A bank that has filed
an approved compliance plan may, after prior written notice to and
approval by the FDIC, amend the plan to reflect a change in
circumstance. Until such time as a proposed amendment has been
approved, the bank shall implement the compliance plan as previously
approved.
[Codified to 12 C.F.R. § 308.303]
[Section 308.303 added at 60 Fed. Reg. 35684, July 10,
1995, effective August 9, 1995]
§ 308.304 Issuance of orders to correct deficiencies and to
take or refrain from taking other actions.
(a) Notice of intent to issue order--(1) In
general. The FDIC shall provide a bank prior written notice of the
FDIC's intention to issue an order requiring the bank to correct a
safety and soundness deficiency or to take or refrain from taking other
actions pursuant to section 39 of the FDI Act. The bank shall have such
time to respond to a proposed order as provided by the FDIC under
paragraph (c) of this section.
(2) Immediate issuance of final order. If the FDIC
finds it necessary in order to carry out the purposes of
section 39 of the FDI Act,
the FDIC may, without providing the notice prescribed in paragraph
(a)(1) of this section, issue an order requiring a bank immediately to
take actions to correct a safety and soundness deficiency or take or
refrain from taking other actions pursuant to section 39. A bank that
is subject to such an immediately effective order may submit a written
appeal of the order to the FDIC. Such an appeal must be received by the
FDIC within 14 calendar days of the issuance of the order, unless the
FDIC permits a longer period. The FDIC shall consider any such appeal,
if filed in a timely matter, within 60 days of receiving the appeal.
During such period of review, the order shall remain in effect unless
the FDIC, in its sole discretion, stays the effectiveness of the order.
(b) Contents of notice. A notice of intent to issue an
order shall include:
(1) A statement of the safety and soundness deficiency or
deficiencies that have been identified at the bank;
(2) A description of any restrictions, prohibitions, or
affirmative actions that the FDIC proposes to impose or require;
(3) The proposed date when such restrictions or prohibitions
would be effective or the proposed date for completion of any required
action; and
(4) The date by which the bank subject to the order may file with
the FDIC a written response to the notice.
(c) Response to notice--(1) Time for response.
A bank may file a written response to a notice of intent to issue
an order within the time period set by the FDIC. Such a response must
be received by the FDIC within 14 calendar days from the date of the
notice unless the FDIC determines that a different period is
appropriate in light of the safety and soundness of the bank or other
relevant circumstances.
(2) Contents of response. The response should include:
(i) An explanation why the action proposed by the FDIC is not an
appropriate exercise of discretion under section 39;
(ii) Any recommended modification of the proposed order; and
(iii) Any other relevant information, mitigating circumstances,
documentation, or other evidence in support of the position of the bank
regarding the proposed order.
(d) Agency consideration of response. After considering
the response, the FDIC may:
(1) Issue the order as proposed or in modified form;
(2) Determine not to issue the order and so notify the bank; or
(3) Seek additional information or clarification of the response
from the bank, or any other relevant source.
(e) Failure to file response. Failure by a bank to file
with the FDIC, within the specified time period, a written response to
a proposed order shall constitute a waiver of the opportunity to
respond and shall constitute consent to the issuance of the
order.
{{2-28-01 p.2166.19}}
(f) Request for modification of rescission of order. Any
bank that is subject to an order under this subpart may, upon a change
in circumstances, request in writing that the FDIC reconsider the terms
of the order, and may propose that the order be rescinded or modified.
Unless otherwise ordered by the FDIC, the order shall continue in place
while such request is pending before the FDIC.
[Codified to 12 C.F.R. § 308.304]
[Section 308.304 added at 60 Fed. Reg. 35685, July 10,
1995, effective August 9, 1995]
§ 308.305 Enforcement of orders.
(a) Judicial remedies. Whenever a bank fails to comply
with an order issued under section 39, the FDIC may seek enforcement of
the order in the appropriate United States district court pursuant to
section 8(i)(1) of the FDI Act.
(b) Failure to comply with order. Pursuant to section
8(i)(2)(A) of the FDI Act, the FDIC may assess a civil money penalty
against any bank that violates or otherwise fails to comply with any
final order issued under section 39 and against any
institution-affiliated party who participates in such violation or
noncompliance.
(c) Other enforcement action. In addition to the actions
described in paragraphs (a) and (b) of this section, the FDIC may seek
enforcement of the provisions of section 39 or this part through any
other judicial or administrative proceeding authorized by law.
[Codified to 12 C.F.R. § 308.305]
[Section 308.305 added at 60 Fed. Reg. 35685, July 10, 1995,
effective August 9, 1995]
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