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1000 - Federal Deposit Insurance Act
{{12-31-08 p.1257}}
SEC. 18(a) REPRESENTATIONS OF DEPOSIT INSURANCE.--
(a) INSURANCE LOGO.--
(1) INSURED DEPOSITORY INSTITUTIONS.--
(A) IN GENERAL.--Each insured depository institution
shall display at each place of business maintained by that institution
a sign or signs relating to the insurance of the deposits of the
institution, in accordance with regulations to be prescribed by the
Corporation.
(B) STATEMENT TO BE INCLUDED.--Each sign required under
subparagraph (A) shall include a statement that insured deposits are
backed by the full faith and credit of the United States Government.
(2) REGULATIONS.--The Corporation shall prescribe
regulations to carry out this subsection, including regulations
governing the substance of signs required by paragraph (1) and the
manner of display or use of such signs.
(3) PENALTIES.--For each day that an insured depository
institution continues to violate paragraph (1) or any regulation issued
under paragraph (2), it shall be subject to a penalty of not more than
$100, which the corporation may recover for its use.
[Codified to 12 U.S.C. 1828(a)]
[Source: Section 2[18(a)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 891), effective September 21, 1950, as amended by
sections 201(a)(1) and 221(1) of title II of the Act of August 9, 1989
(Pub. L. No. 101--73; 103 Stat. 187 and 266), effective August 9, 1989;
section 2(c)(2) of the Act of February 15, 2006 (Pub. L. No. 109--173;
119 Stat. 3602), effective date shall take effect on the date on which
the final regulations required under section 2109(a)(2), of the Federal
Deposit Insurance Reform Act of 2005 take effect; sections 126(a),
126(d)(1) and (d)(2), of title I of the Act of October 3, 2008 (Pub. L.
No. 110--343; 122 Stat. 3796), effective October 3,
2008]
(b) No insured depository institution shall pay any dividends on
its capital stock or interest on its capital notes or debentures (if
such interest is required to be paid only out of net profits) or
distribute any of its capital assets while it remains in default in the
payment of any assessment due to the Corporation; and any director or
officer of any insured depository institution who participates in the
declaration or payment of any such dividend or interest or in any such
distribution shall, upon conviction, be fined not more than $1,000
or imprisoned not more than one year, or both: Provided,
That, if such default is due to a dispute between the insured
depository institution and the Corporation over the amount of such
assessment, this subsection shall not apply if the insured depository
institution deposits security satisfactory to the Corporation for
payment upon final determination of the issue.
[Codified to 12 U.S.C. 1828(b)]
[Source: Section 2[18(b)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 891), effective September 21, 1950, as amended by
section 201(a)(1) of title II of the Act of August 9, 1989 (Pub. L. No.
101--73; 103 Stat. 187), effective August 9,
1989]
(c)(1) *
Except with the prior written approval of the responsible agency,
which shall in every case referred to in this paragraph be the
Corporation, no insured depository institution shall--
(A) merge or consolidate with any noninsured bank or institution;
(B) assume liability to pay any deposits (including liabilities
which would be "deposits" except for the proviso in
section
3(l)(5) of this Act) made in, or
similar liabilities of, any noninsured bank or institution;
or
{{12-31-08 p.1258}}
(C) transfer assets to any noninsured bank or institution in
consideration of the assumption of liabilities for any portion of the
deposits made in such insured depository institution.
(2) No insured depository institution shall merge or consolidate
with any other insured depository institution or, either directly or
indirectly, acquire the assets of, or assume liability to pay any
deposits made in, any other insured depository institution except with
the prior written approval of the responsible agency, which shall be--
(A) the Comptroller of the Currency if the acquiring, assuming,
or resulting bank is to be a national bank;
(B) the Board of Governors of the Federal Reserve System if the
acquiring, assuming, or resulting bank is to be a State member bank;
(C) the Corporation if the acquiring, assuming, or resulting bank
is to be a State nonmember insured bank (except a savings bank
supervised by the Director of the Office of Thrift Supervision); and
(D) the Director of the Office of Thrift Supervision if the
acquiring, assuming, or resulting institution is to be a savings
association.
(3) Notice of any proposed transaction for which approval is
required under paragraph (1) or (2) (referred to hereafter in this
subsection as a "merger transaction") shall, unless the
responsible agency finds that it must act immediately in order to
prevent the probable default of one of the banks or savings
associations involved, be published--
(A) prior to the granting of approval of such transaction,
(B) in a form approved by the responsible agency,
(C) at appropriate intervals during a period at least as long as
the period allowed for furnishing reports under paragraph (4) of this
subsection, and
(D) in a newspaper of general circulation in the community or
communities where the main offices of the banks or savings associations
involved are located, or, if there is no such newspaper in any such
community, then in the newspaper of general circulation published
nearest thereto.
(4) REPORTS ON COMPETITIVE FACTORS.--
(A) REQUEST FOR REPORT.--In the interests of uniform
standards and subject to subparagraph (B), before acting on any
application for approval of a merger transaction, the responsible
agency shall--
(i) request a report on the competitive factors involved from the
Attorney General of the United States; and
(ii) provide a copy of the request to the Corporation (when the
Corporation is not the responsible agency).
(B) FURNISHING OF REPORT.--The report requested under
subparagraph (A) shall be furnished by the Attorney General to the
responsible agency--
(i) not later than 30 calendar days after the date on which the
Attorney General received the request; or
(ii) not later than 10 calendar days after such date, if the
requesting agency advises the Attorney General that an emergency exists
requiring expeditious action.
(C) EXCEPTIONS.--A responsible agency may not be
required to request a report under subparagraph (A) if--
(i) the responsible agency finds that it must act immediately in
order to prevent the probable failure of 1 of the insured depository
institutions involved in the merger transaction; or
(ii) the merger transaction involves solely an insured depository
institution and 1 or more of the affiliates of such depository
institution.
(5) The responsible agency shall not approve--
(A) any proposed merger transaction 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 business of
banking in any part of the United States, or
(B) any other proposed merger transaction whose effect in any
section of the country may be substantially to lessen competition, or
to tend to create a monopoly, or
{{12-29-06 p.1258.01}}which in any other manner would be in restraint
of trade, unless it finds that the anticompetitive effects of the
proposed transaction are clearly outweighed in the public interest by
the probable effect of the transaction in meeting the convenience and
needs of the community to be served.
In every case, the responsible agency shall take into consideration
the financial and managerial resources and future prospects of the
existing and proposed institutions, and the convenience and needs of
the community to be served.
{{2-29-08 p.1259}}
(6) The responsible agency shall immediately notify the Attorney
General of any approval by it pursuant to this subsection of a proposed
merger transaction. If the agency has found that it must act
immediately to prevent the probable failure of one of the insured
depository institutions involved, or if the proposed merger transaction
is solely between an insured depository institution and 1 or more of
its affiliates, and the report on the competitive factors has been
dispensed with, the transaction may be consummated immediately upon
approval by the agency. If the agency has advised the Attorney General
under paragraph (4)(B)(ii) of the existence of an emergency requiring
expeditious action and has requested a report on the competitive
factors within 10 days, the transaction may not be consummated before
the fifth calendar day after the date of approval by the agency. In all
other cases, the transaction may not be consummated before the
thirtieth calendar day after the date of approval by the agency or, if
the agency has not received any adverse comment from the Attorney
General of the United States relating to competitive factors, such
shorter period of time as may be prescribed by the agency with the
concurrence of the Attorney General, but in no event less than 15
calendar days atfer the date of approval.
(7)(A) Any action brought under the antitrust laws arising out of
a merger transaction shall be commenced prior to the earliest time
under paragraph (6) at which a merger transaction approved under
paragraph (5) might be consummated. The commencement of such an action
shall stay the effectiveness of the agency's approval unless the court
shall otherwise specifically order. In any such action, the court shall
review de novo the issues presented.
(B) In any judicial proceeding attacking a merger transaction
approved under paragraph (5) on the ground that the merger transaction
alone and of itself constituted a violation of any antitrust laws other
than section 2 of the Act of July 2, 1890 (section 2 of the Sherman
Antitrust Act, 15 U.S.C. 2), the standards applied by the court shall
be identical with those that the banking agencies are directed to apply
under paragraph (5).
(C) Upon the consummation of a merger transaction in compliance
with this subsection and after the termination of any antitrust
litigation commenced within the period prescribed in this paragraph, or
upon the termination of such period if no such litigation is commenced
therein, the transaction may not thereafter be attacked in any judicial
proceeding on the ground that it alone and of itself constituted a
violation of any antitrust laws other than section 2 of the Act of July
2, 1890 (section 2 of the Sherman Antitrust Act, 15 U.S.C. 2), but
nothing in this subsection shall exempt any bank or savings association
resulting from a merger transaction from complying with the antitrust
laws after the consummation of such transaction.
(D) In any action brought under the antitrust laws arising out of
a merger transaction approved by a Federal supervisory agency pursuant
to this subsection, such agency, and any State banking supervisory
agency having jurisdiction within the State involved, may appear as a
party of its own motion and as of right, and be represented by its
counsel.
(8) For the purposes of this subsection, the term "antitrust
laws" means the Act of July 2, 1890 (the Sherman Antitrust Act, 15
U.S.C. 1--7), the Act of October 15, 1914 (the Clayton Act, 15 U.S.C.
12--27), and any other Acts in pari materia.
(9) Each of the responsible agencies shall include in its annual
report to the Congress a description of each merger transaction
approved by it during the period covered by the report, along with--
(A) the name and total resources of each bank or savings
association involved;
(B) whether a report was submitted by the Attorney General under
paragraph (4), and, if so, a summary by the Attorney General of the
substance of such report; and
(C) a statement by the responsible agency of the basis for its
approval.
(10) Until June 30, 1976, the responsible agency shall not grant
any approval required by law which has the practical effect of
permitting a conversion from the mutual to the stock form of
organization, including approval of any application pending on the date
of enactment of this subsection, except that this sentence shall not be
deemed to limit now or hereafter the authority of the responsible
agency to grant approvals in cases where the responsible agency finds
that it must act in order to maintain the safety, soundness, and
stability of an insured bank. The responsible agency may by rule,
regulation, or otherwise and under such civil penalties (which shall be
cumulative to any other remedies) as it may
{{2-29-08 p.1260}}prescribe take whatever action it deems
necessary or appropriate to implement or enforce this subsection.
(11) MONEY LAUNDERING.--In every case, the responsible
agency, shall take into consideration the effectiveness of any insured
depository institution involved in the proposed merger transaction in
combatting money laundering activities, including in overseas branches.
(12) The provisions of this subsection do not apply to any merger
transaction involving a foreign bank if no party to the transaction is
principally engaged in business in the United States.
[Codified to 12 U.S.C. 1828(c)]
[Source: Section 2[18(c)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 892), effective September 21, 1950, as amended by
the Act of May 13, 1960 (Pub. L. No. 86--463; 74 Stat. 129), effective
May 13, 1960; section 1(a) of the Act of February 21, 1966 (Pub. L. No.
89--356; 80 Stat. 7), effective February 21, 1966; section 106 of title
I of the Act of October 28, 1974 (Pub. L. No. 93--495; 88 Stat. 1505),
effective October 28, 1974; section 6(c)(25) of the Act of September
17, 1978 (Pub. L. No. 95--369; 92 Stat. 620), effective September 17,
1978; section 306 of title III of the Act of November 10, 1978 (Pub. L.
No. 95--630; 92 Stat. 3677), effective March 10, 1979; section 113(n)
of title I of the Act of October 15, 1982 (Pub. L. No. 97--320; 96
Stat. 1474), effective October 15, 1982; section 504(b)(1) of title V
of the Act of August 10, 1987 (Pub. L. No. 100--86; 101 Stat. 632),
effective August 10, 1987; sections 201(a)(1) and (b) and 221(2) of
title II of the Act of August 9, 1989 (Pub. L. No. 101--73; 103 Stat.
187--188 and 266--267, respectively), effective August 9, 1989;
sections 321(b) and 324 of title III and section 602(a)(45)--(48) of
title VI of the Act of September 23, 1994 (Pub. L. No. 103--325; 108
Stat. 2226, 2227 and 2290, respectively), effective September 23, 1994;
section 327(b)(1) of title III of the Act of October 26, 2001 (Pub. L.
No. 107--56; 115 Stat. 319), effective October 26, 2001; sections
8(a)(5)(A)--(C) of the Act of October 30, 2004 (Pub. L. No. 108-386;
118 Stat. 2231), effective October 30, 2004; section 606 of title VI of
the Act of October 13, 2006 (Pub. L. No. 109--351; 120 Stat. 1981),
effective October 13, 2006]
(d)(1) No State nonmember insured bank shall establish and
operate any new domestic branch unless it shall have the prior written
consent of the Corporation, and no State nonmember insured bank shall
move its main office or any such branch from one location to another
without such consent. No foreign bank may move any insured branch from
one location to another without such consent. The factors to be
considered in granting or withholding the consent of the Corporation
under this subsection shall be those enumerated in section 6 of this
Act.
(2) No State nonmember insured bank shall establish or operate
any foreign branch, except with the prior written consent of the
Corporation and upon such conditions and pursuant to such regulations
as the Corporation may prescribe from time to time.
(3) EXCLUSIVE AUTHORITY FOR ADDITIONAL BRANCHES.--
(A) IN GENERAL.--Effective June 1, 1997, a State
nonmember bank may not acquire, establish, or operate a branch in any
State other than the bank's home State (as defined in
section
44(f)(4)) *
or a State in which the bank already has a branch unless the
acquisition, establishment, or operation of a branch in such State by a
State nonmember bank is authorized under this subsection or
section 13(f),
13(k), or 44.
(B) RETENTION OF BRANCHES.--In the case of a State
nonmember bank which relocates the main office of such bank from 1
State to another State after May 31, 1997, the bank may retain and
operate branches within the State which was the bank's home State (as
defined in section 44(f)(4)) before the relocation of such office only
to the extent the bank would be authorized, under this section or any
other provision of law referred to in subparagraph (A), to acquire,
establish, or commence to operate a branch in such State if--
(i) the bank had no branches in such State; or
(ii) the branch resulted from--
{{2-28-05 p.1261}}
(I) an interstate merger transaction approved pursuant to section
44; or
(II) a transaction after May 31, 1997, pursuant to which the bank
received assistance from the Corporation under section 13(c).
(4) State ``opt-in'' election to permit interstate
branching through de novo branches.--
(A) IN GENERAL.--Subject to subparagraph (B), the
Corporation may approve an application by an insured State nonmember
bank to establish and operate a de novo branch in a State (other than
the bank's home State) in which the bank does not maintain a branch
if--
(i) there is in effect in the host State a law that--
(I) applies equally to all banks; and
(II) expressly permits all out-of-State banks to establish de
novo branches in such State; and
(ii) the conditions established in, or made applicable to this
paragraph by, subparagraph (B) are met.
(B) Conditions on establishment and operation of interstate
branch.--
(i) ESTABLISHMENT.--An application by an insured State
nonmember bank to establish and operate a de novo branch in a host
State shall be subject to the same requirements and conditions to which
an application for a merger transaction is subject under paragraphs
(1), (3), and (4) of section 44(b).
(ii) OPERATION.--Subsections (c) and (d)(2) of section
44 shall apply with respect to each branch of an insured State
nonmember bank which is established and operated pursuant to an
application approved under this paragraph in the same manner and to the
same extent such provisions of such section apply to a branch of a
State bank which resulted from a merger transaction under such section
44.
(C) DE NOVO BRANCH DEFINED.--For purposes of this
paragraph, the term "de novo branch" means a branch of a State
bank which--
(i) is originally established by the State bank as a branch; and
(ii) does not become a branch of such bank as a result of--
(I) the acquisition by the bank of an insured depository
institution or a branch of an insured depository institution; or
(II) the conversion, merger, or consolidation of any such
institution or branch.
(D) HOME STATE DEFINED.--The term "home State"
means the State by which a State bank is chartered.
(E) HOST STATE DEFINED.--The term "host State"
means, with respect to a bank, a State, other than the home State of
the bank, in which the bank maintains, or seeks to establish and
maintain, a branch.
[Codified to 12 U.S.C. 1828(d)]
[Source: Section 2[18(d)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 892), effective September 21, 1950, as amended by
section 6(c)(26) of the Act of September 17, 1978 (Pub. L. No. 95--369;
92 Stat. 620), effective September 17, 1978; section 301(b) of title
III of the Act of November 10, 1978 (Pub. L. No. 95--630; 92 Stat.
3675), effective March 10, 1979; sections 102(b)(3) and 103(b) of title
I of the Act of September 29, 1994 (Pub. L. No. 103--328; 108 Stat.
2352 and 2353), effective September 29, 1994; section 8(a)(5)(D) of the
Act of October 30, 2004 (Pub. L. No. 108-386; 118 Stat. 2231),
effective October 30, 2004]
(e) The Corporation may require any insured depository institution
to provide protection and indemnity against burglary, defalcation, and
other similar insurable losses. Whenever any insured depository
institution refuses to comply with any such requirement the Corporation
may contract for such protection and indemnity and add the cost thereof
to the assessment otherwise payable by such bank.
[Codified to 12 U.S.C. 1828(e)]
[Source: Section 2[18(e)] of the Act of September 21,
1950 (Pub. L. No. 797; 64 Stat. 892), effective September 21, 1950, as
amended by section 201(a)(1) of title II of the Act of August 9, 1989
(Pub. L. No. 101--73; 103 Stat. 187), effective August 9,
1989]
{{2-28-05 p.1262}}
(f) Whenever any insured depository institution (except a national
bank), after written notice of the recommendations of the Corporation
based on a report of examination of such insured depository institution
by an examiner of the Corporation, shall fail to comply with such
recommendations within one hundred and twenty days after such notice,
the Corporation shall have the power, and is hereby authorized, to
publish only such part of such report of examination as relates to any
recommendation not complied with: Provided, That notice of
intention to make such publication shall be given to the insured
depository institution at least ninety days before such publication is
made.
[Codified to 12 U.S.C. 1828(f)]
[Source: Section 2[18(f)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 892), effective September 21, 1950, as amended by
section 201(a)(1) of title II of the Act of August 9, 1989 (Pub. L. No.
101--73; 103 Stat. 187), effective August 9, 1989; section 602(a)(49)
of title VI of the Act of September 23, 1994 (Pub. L. No. 103--325; 108
Stat. 2290), effective September 23, 1994; section 8(a)(5)(E) of the
Act of October 30, 2005 (Pub. L. No. 108-386; 118 Stat. 2231),
effective October 30, 2005]
(g)(1) The Board of Directors shall by regulation prohibit the
payment of interest or dividends on demand deposits in insured
nonmember banks and in insured branches of foreign banks and for such
purpose it may define the term "demand deposits"; but such
exceptions from this prohibition shall be made as are now or may
hereafter be prescribed with respect to deposits payable on demand in
member banks by section 19 of the Federal Reserve Act, as amended, or
by regulation of the Board of Governors of the Federal Reserve System.
The Board of Directors may from time to time, after consulting with the
Board of Governors of the Federal Reserve System and the Director of
the Office of Thrift Supervision, prescribe rules governing the
advertisement of interest or dividends on deposits by insured nonmember
banks (including insured mutual savings banks) on time and savings
deposits. The Board of Directors is authorized for the purposes of this
subsection to define the terms "time deposits" and "savings
deposits", to determine what shall be deemed a payment of interest,
and to prescribe such regulations as it may deem necessary to
effectuate the purposes of this subsection and to prevent evasions
thereof. The provisions of this subsection and of regulations issued
thereunder shall also apply, in the discretion of the Board of
Directors, to obligations other than deposits that are undertaken by
insured nonmember banks or their affiliates. As used in this
subsection, the term "affiliate" has the same meaning as when
used in section 2(b) of the Banking Act of 1933, as amended (12 U.S.C.
221a(b)), except that the term "member bank", as used in such
section 2(b), shall be deemed to refer to an insured nonmember bank.
During the period commencing on October 15, 1962, and ending on October
15, 1968, the provisions of this subsection shall not apply to the rate
of interest which may be paid by insured nonmember banks on time
deposits of foreign governments, monetary and financial authorities of
foreign governments when acting as such, or international financial
institutions of which the United States is a member. The authority
conferred by this subsection shall also apply to noninsured banks in
any State if the total amount of time and savings deposits held in all
such banks in the State, plus the total amount of deposits, shares, and
withdrawable accounts held in all building and loan, savings and loan,
and homestead associations (including cooperative banks) in the State
which are not members of a Federal home loan bank, is more than 20 per
centum of the total amount of such deposits, shares, and withdrawable
accounts held in all banks and building and loan, savings and loan, and
homestead associations (including cooperative banks) in the State. Such
authority shall only be exercised by the Board of Directors with
respect to such noninsured banks prior to July 31, 1970, to limit the
rates of interest or dividends which such banks may pay on time and
savings deposits to maximum rates not lower than 51/2 per centum
per annum. Whenever it shall appear to the Board of Directors that any
noninsured bank or any affiliate thereof 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 subsection or of any
regulations thereunder, the Board of Directors may, in its discretion,
bring an action in the United States district court for the judicial
district in which the principal office of the noninsured bank or
affiliate thereof is located to enjoin such acts or practices, to
enforce compliance with this subsection or any regulations
{{4-28-06 p.1263}}thereunder, or for a combination of the
foregoing, and such courts shall have jurisdiction of such actions,
and, upon a proper showing, an injunction, restraining order, or other
appropriate order may be granted without bond.
(2) Notwithstanding the provisions of paragraph (1), an insured
nonmember bank may permit withdrawals to be made automatically from a
savings deposit that consists only of funds in which the entire
beneficial interest is held by one or more individuals through payment
to the bank itself or through transfer of credit to a demand deposit or
other account pursuant to written authorization from the depositor to
make such payments or transfers in connection with checks or drafts
drawn upon the bank, pursuant to terms and conditions prescribed by the
Board of Directors.
[Codified to 12 U.S.C. 1828(g)]
[Source: Section 2[18(g)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 893), effective September 21, 1950, as amended by
section 2 of the Act of October 15, 1962 (Pub. L. No. 87--827; 76 Stat.
953), effective October 15, 1962; section 2 of the Act of July 21, 1965
(Pub. L. No. 89--79; 79 Stat. 244), effective July 21, 1965; section 3
of the Act of September 21, 1966 (Pub. L. No. 89--597; 80 Stat. 824),
effective September 21, 1966; sections 2(a) and 4(b) of title I of the
Act of December 23, 1969 (Pub. L. No. 91--151; 83 Stat. 372 and 374),
effective December 23, 1969; section 3 of the Act of August 16, 1973
(Pub. L. No. 93--100; 87 Stat. 342), effective September 15, 1973;
section 107 of title I of the Act of October 28, 1974 (Pub. L. No.
93--495; 88 Stat. 1505), effective October 28, 1974; section 102 of
title I of the Act of October 29, 1974 (Pub. L. No. 93--501; 88 Stat.
1558), effective October 29, 1974; section 6(c)(27) of the Act of
September 17, 1978 (Pub. L. No. 95--369; 92 Stat. 620), effective
September 17, 1978; section 101 of title I of the Act of December 28,
1979 (Pub. L. No. 96--161; 93 Stat. 1233), effective December 31, 1979
through March 31, 1980; section 302 of title III of the Act of March
31, 1980 (Pub. L. No. 96--221; 94 Stat. 146), effective March 31, 1980;
and section 201(b) of title II of the Act of August 9, 1989 (Pub. L.
No. 101--73; 103 Stat. 188), effective August 9,
1989]
(h) PENALTY FOR FAILURE TO TIMELY PAY ASSESSMENTS.--
(1) IN GENERAL.--Subject to paragraph (3), any insured
depository institution which fails or refuses to pay any assessment
shall be subject to a penalty in an amount of not more than 1 percent
of the assessment due for each day that such violation continues.
(2) EXCEPTION IN CASE OF DISPUTE.--Paragraph (1) shall
not apply if--
(A) the failure to pay an assessment is due to a dispute between
the insured depository institution and the Corporation over the amount
of such assessment; and
(B) the insured depository institution deposits security
satisfactory to the Corporation for payment upon final determination of
the issue.
(3) SPECIAL RULE FOR SMALL ASSESSMENT AMOUNTS.--If the
amount of the assessment which an insured depository institution fails
or refuses to pay is less than $10,000 at the time of such failure or
refusal, the amount of any penalty to which such institution is subject
under paragraph (1) shall not exceed $100 for each day that such
violation continues.
(4) AUTHORITY TO MODIFY OR REMIT PENALTY.--The
Corporation, in the sole discretion of the Corporation, may compromise,
modify or remit any penalty which the Corporation may assess or has
already assessed under paragraph (1) upon a finding that good cause
prevented the timely payment of an assessment.
[Codified to 12 U.S.C. 1828(h)]
[Source: Section 2[18(h)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 893), effective September 21, 1950, as amended by
section 201(a)(1) of title II of the Act of August 9, 1989 (Pub. L. No.
101--73; 103 Stat. 187), effective August 9, 1989; section 2104(c) of
title II of the Act of February 8, 2006 (Pub. L. No. 109--171; 120
Stat. 13), effective date shall take effect on the date that the final
regulations required under section 9(a)(5) take
effect]
(i)(1) No insured State nonmember bank shall, without the prior
consent of the Corporation, reduce the amount or retire any part of its
common or preferred capital stock, or retire any part of its capital
notes or debentures.
{{4-28-06 p.1264}}
(2) No insured Federal depository institution shall convert into
an insured State depository institution if its capital stock or its
surplus will be less than the capital stock or surplus, respectively,
of the converting bank at the time of the shareholder's meeting
approving such conversion, without the prior written consent of--
(A) the Board of Governors of the Federal Reserve System if the
resulting bank is to be a State member bank;
(B) the Corporation if the resulting bank is to be a State
nonmember insured bank; and
(C) the Director of the Office of Thrift Supervision if the
resulting institution is to be an insured State savings association.
(3) Without the prior written consent of the Corporation, no
insured depository institution shall convert into a noninsured bank or
institution.
(4) In granting or withholding consent under this subsection, the
responsible agency shall consider--
(A) the financial history and condition of the bank,
(B) the adequacy of its capital structure,
(C) its future earnings prospects,
(D) the general character and fitness of its management,
(E) the convenience and needs of the community to be served, and
(F) whether or not its corporate powers are consistent with the
purposes of this Act.
[Codified to 12 U.S.C. 1828(i)]
[Source: Section 2[18(i)] of the Act of September 21, 1950 (Pub.
L. No. 797), as added by section 1(b) of the Act of February 21, 1966
(Pub. L. No. 89--356; 80 Stat. 9), effective February 21, 1966; as
amended by section 504(b)(2) of title V of the Act of August 10, 1987
(Pub. L. No. 100--86; 101 Stat. 633), effective August 10, 1987;
sections 201(a)(1) and 221(3) of title II of the Act of August 9, 1989
(Pub. L. No. 101--73; 103 Stat. 187 and 267), effective August 9, 1989;
sections 8(a)(5)(F)--(I) of the Act of October 30, 2004 (Pub. L. No.
108--386; 118 Stat. 2231), effective October 30,
2004]
(j) Restrictions on Transactions With Affiliates and
Insiders.--
(1) TRANSACTIONS WITH AFFILIATES.--
(A) IN GENERAL.--Sections
23A and 23B of the Federal
Reserve Act shall apply with respect to every nonmember insured bank in
the same manner and to the same extent as if the nonmember insured bank
were a member bank.
(B) AFFILIATE DEFINED.--For the purpose of subparagraph
(A), any company that would be an affiliate (as defined in sections 23A
and 23B) of a nonmember insured bank if the nonmember insured bank were
a member bank shall be deemed to be an affiliate of that nonmember
insured bank.
(2) Extensions of credit to officers, directors, and
principal shareholders.--Subsections
(g) and (h) of section
22 of the Federal Reserve Act shall apply with respect to every
nonmember insured bank in the same manner and to the same extent as if
the nonmember insured bank were a member bank.
(3) Avoiding extraterritorial application to foreign
banks.--
(A) TRANSACTIONS WITH AFFILIATES.--Paragraph (1) shall
not apply with respect to a foreign bank solely because the foreign
bank has an insured branch.
(B) Extensions of credit to officers, directors, and
principal shareholders.--Paragraph (2) shall not apply with respect
to a foreign bank solely because the foreign bank has an insured
branch, but shall apply with respect to the insured branch.
(C) FOREIGN BANK DEFINED.--For purposes of this
paragraph, the term "foreign bank" has the same meaning as in
section 1(b)(7) of the
International Banking Act of 1978.
[Codified to 12 U.S.C. 1828(j)]
[Source: Section 2[18(j)] of the Act of September 21,
1950 (Pub. L. No. 797), as added by section 12(c) of the Act of July 1,
1966 (Pub. L. No. 89--485; 80 Stat. 242), effective July 1, 1966; and
as amended by section 6(c)(28) of the Act of September 17, 1978 (Pub.
L. No. 95--369; 92 Stat. 620), effective September 17, 1978; section
108 of title I of the Act of November 10, 1978 (Pub. L. No. 95--630; 92
Stat. 3664), effective March 10, 1979; sections
{{4-28-06 p.1264.01}}113(o) of title I, and 410(d), 423, and
424(b), (d)(10), and (e) of title IV of the Act of October 15, 1982
(Pub. L. No. 97--320; 96 Stat. 1474, 1520, 1522, and 1523), effective
October 15, 1982; sections 102(b) and 103 of title I of the Act of
August 10, 1987 (Pub. L. No. 100--86; 101 Stat. 566 to 567), effective
August 10, 1987; section 201(a)(1) of title II and sections 905(d) and
907(c) of title IX of the Act of August 9, 1989 (Pub. L. No. 101--73;
103 Stat. 187, 460 and 466, respectively), effective August 9, 1989;
section 306(k) of title III of the Act of December 19, 1991 (Pub. L.
No. 102--242; 105 Stat. 2359), effective December 19,
1991]
{{12-29-06 p.1265}}
(k) Authority to Regulate or Prohibit Certain Forms of
Benefits to Institution-Affiliated Parties.--
(1) GOLDEN PARACHUTES AND INDEMNIFICATION PAYMENTS.--The
Corporation may prohibit or limit, by regulation or order, any golden
parachute payment or indemnification payment.
(2) FACTORS TO BE TAKEN INTO ACCOUNT.--The Corporation
shall prescribe, by regulation, the factors to be considered by the
Corporation in taking any action pursuant to paragraph (1) which may
include such factors as the following:
(A) Whether there is a reasonable basis to believe that the
institution-affiliated party has committed any fraudulent act or
omission, breach of trust or fiduciary duty, or insider abuse with
regard to the depository institution or covered company that has had a
material affect on the financial condition of the institution.
(B) Whether there is a reasonable basis to believe that the
institution-affiliated party is substantially responsible for--
(i) the insolvency of the depository institution or covered
company;
(ii) the appointment of a conservator or receiver for the
depository institution; or
(iii) the troubled condition of the depository institution (as
defined in the regulations prescribed pursuant to section 32(f)).
(C) Whether there is reasonable basis to believe that the
institution-affiliated party has materially violated any applicable
Federal or State banking law or regulation that has had a material
affect on the financial condition of the institution.
(D) Whether there is a reasonable basis to believe that the
institution-affiliated party has violated or conspired to violate--
(i) section 215,
656,
657,
1005,
1006,
1007,
1014,
1032, or
1344 of title 18, United
States Code; or
(ii) section 1341 or
1343 of such title affecting
a federally insured financial institution.
(E) Whether the institution-affiliated party was in a position of
managerial or fiduciary responsibility.
(F) The length of time the party was affiliated with the insured
depository institution or covered company and the degree to which--
(i) the payment reasonably reflects compensation earned over the
period of employment; and
(ii) the compensation involved represents a reasonable payment
for services rendered.
(3) CERTAIN PAYMENTS PROHIBITED.--No insured depository
institution or covered company may prepay the salary or any liability
or legal expense of any institution-affiliated party if such payment is
made--
(A) in contemplation of the insolvency of such institution or
covered company or after the commission of an act of insolvency; and
(B) with a view to, or has the result of--
(i) preventing the proper application of the assets of the
institution to creditors; or
(ii) preferring one creditor over another.
(4) GOLDEN PARACHUTE PAYMENT DEFINED.--For purposes of
this subsection--
(A) IN GENERAL.--The term "golden parachute
payment" means any payment (or any agreement to make any payment) in
the nature of compensation by any insured depository institution or
covered company for the benefit of any institution-affiliated party
pursuant to an obligation of such institution or covered company that--
(i) is contingent on the termination of such party's affiliation
with the institution or covered company; and
(ii) is received on or after the date on which--
(I) the insured depository institution or covered company, or any
insured depository institution subsidiary of such covered company, is
insolvent;
{{12-29-06 p.1266}}
(II) any conservator or receiver is appointed for such
institution;
(III) the institution's appropriate Federal banking agency
determines that the insured depository institution is in a troubled
condition (as defined in the regulations precribed pursuant to section
32(f));
(IV) the insured depository institution has been assigned a
composite rating by the appropriate Federal banking agency or the
Corporation of 4 or 5 under the Uniform Financial Institutions Rating
System; or
(V) the insured depository institution is subject to a proceeding
initiated by the Corporation to terminate or suspend deposit insurance
for such institution.
(B) CERTAIN PAYMENTS IN CONTEMPLATION OF AN EVENT.--Any
payment which would be a golden parachute payment but for the fact that
such payment was made before the date referred to in subparagraph
(A)(ii) shall be treated as a golden parachute payment if the payment
was made in contemplation of the occurrence of an event described in
any subclause of such subparagraph.
(C) CERTAIN PAYMENTS NOT INCLUDED.--The term "golden
parachute payment" shall not include--
(i) any payment made pursuant to a retirement plan which is
qualified (or is intended to be qualified) under section 401 of the
Internal Revenue Code of 1986 or other nondiscriminatory benefit plan;
(ii) any payment made pursuant to a bona fide deferred
compensation plan or arrangement which the Board determines, by
regulation or order, to be permissible; or
(iii) any payment made by reason of the death or disability of an
institution-affiliated party.
(5) OTHER DEFINITIONS.--For purposes of this
subsection--
(A) INDEMNIFICATION PAYMENT.--Subject to paragraph (6),
the term "indemnification payment" means any payment (or any
agreement to make any payment) by any insured depository institution or
covered company for the benefit of any person who is or was an
institution-affiliated party, to pay or reimburse such person for any
liability or legal expense with regard to any administrative proceeding
or civil action instituted by the appropriate Federal banking agency
which results in a final order under which such person--
(i) is assessed a civil money penalty;
(ii) is removed or prohibited from participating in conduct of
the affairs of the insured depository institution; or
(iii) is required to take any affirmative action described in
section 8(b)(6) with respect to such institution.
(B) LIABILITY OR LEGAL EXPENSE.--The term "liability
or legal expense" means--
(i) any legal or other professional expense incurred in
connection with any claim, proceeding, or action;
(ii) the amount of, and any cost incurred in connection with, any
settlement of any claim, proceeding, or action; and
(iii) the amount of, and any cost incurred in connection with,
any judgment or penalty imposed with respect to any claim, proceeding,
or action.
(C) PAYMENT.--The term "payment" includes--
(i) any direct or indirect transfer of any funds or any asset;
and
(ii) any segregation of any funds or assets for the purpose of
making, or pursuant to an agreement to make, any payment after the date
on which such funds or assets are segregated, without regard to whether
the obligation to make such payment is contingent on--
(I) the determination, after such date, of the liability for the
payment of such amount; or
(II) the liquidation, after such date, of the amount of such
payment.
(D) COVERED COMPANY.--The term "covered company"
means any depository institution holding company (including any company
required to file a report under section 4(f)(6) of the Bank Holding
Company Act of 1956), or any other company that controls an insured
depository institution.
(6) Certain commercial insurance coverage not treated as
covered benefit payment.--No provision of this subsection shall be
construed as prohibiting any insured depository institution or covered
company from purchasing any commercial insurance
{{2-29-08 p.1267}}policy or fidelity bond, except that, subject
to any requirement described in paragraph (5)(A)(iii), such insurance
policy or bond shall not cover any legal or liability expense of the
institution or covered company which is described in paragraph (5)(A).
[Codified to 12 U.S.C. 1828(k)]
[Source: Section 2[18(k)] of the Act of September 1, 1950 (Pub.
L. No. 797), effective September 21, 1950, as added by section 2523(a)
of title XXV of the Act of November 29, 1990 (Pub. L. No. 101--647; 104
Stat. 4868), effective November 29, 1990; as amended by section
602(a)(50) of title VI of the Act of September 23, 1994 (Pub. L. No.
103--325; 108 Stat. 2290), effective September 23, 1994; section 704 of
title VII of the Act of October 13, 2006 (Pub. L. No. 109--351; 120
Stat. 1986), effective October 13, 2006]
(l) When authorized by State law, a State
nonmember insured bank may, but only with the prior written consent of
the Corporation and upon such conditions and under such regulations as
the Corporation may prescribe from time to time, acquire and hold,
directly or indirectly, stock or other evidences of ownership in one or
more banks or other entities organized under the law of a foreign
country or a dependency or insular possession of the United States and
not engaged, directly or indirectly, in any activity in the United
States except as, in the judgment of the Board of Directors shall be
incidental to the international or foreign business of such foreign
bank or entity; and notwithstanding the provisions of subsection (j) of
this section, such State nonmember insured bank may, as to such foreign
bank or entity, engage in transactions that would otherwise be covered
thereby, but only in the manner and within the limit prescribed by the
Corporation by general or specific regulation or ruling.
[Codified to 12 U.S.C. 1828(l)]
[Source: Section 2[18(l)] of the Act of September 21, 1950 (Pub.
L. No. 797), as added by section 301(c) of title III of the Act of
November 10, 1978 (Pub. L. No. 95--630; 92 Stat. 3676), effective March
10, 1979]
(m) Activities of Savings Associations and Their
Subsidiaries.--
(1) PROCEDURES.--When an insured savings association
establishes or acquires a subsidiary or when an insured savings
association elects to conduct any new activity through a subsidiary
that the insured savings association controls, the insured savings
association--
(A) shall notify the Corporation and the Director of the Office
of Thrift Supervision not less than 30 days prior to the establishment,
or acquisition, of any such subsidiary, and not less than 30 days prior
to the commencement of any such activity, and in either case shall
provide at that time such information as each such agency may, by
regulation, require; and
(B) shall conduct the activities of the subsidiary in accordance
with regulations and orders of the Director of the Office of Thrift
Supervision.
(2) ENFORCEMENT POWERS.--With respect to any subsidiary
of an insured savings association:
(A) the Corporation and the Director of the Office of Thrift
Supervision shall each have, with respect to such subsidiary, the
respective powers that each has with respect to the insured savings
association pursuant to this section or
section 8; and
(B) the Director of the Office of Thrift Supervision may
determine, after notice and opportunity for hearing, that the
continuation by the insured savings association of its ownership or
control of, or its relationship to, the subsidiary--
(i) constitutes a serious risk to the safety, soundness, or
stability of the insured savings association, or
(ii) is inconsistent with sound banking principles or with the
purposes of this Act.
Upon making any such determination, the Corporation or the Director
of the Office of Thrift Supervision shall have authority to order the
insured savings association to divest itself of control of the
subsidiary. The Director of the Office of Thrift Supervision may
take
{{2-29-08 p.1268}}any other corrective measures with respect to
the subsidiary, including the authority to require the subsidiary to
terminate the activities or operations posing such risks, as the
Director may deem appropriate.
(3) ACTIVITIES INCOMPATIBLE WITH DEPOSIT INSURANCE.--
(A) IN GENERAL.--The Corporation may determine by
regulation or order that any specific activity poses a serious threat
to the Deposit Insurance Fund. Prior to adopting any such regulation,
the Corporation shall consult with the Director of the Office of Thrift
Supervision and shall provide appropriate State supervisors the
opportunity to comment thereon, and the Corporation shall specifically
take such comments into consideration. Any such regulation shall be
issued in accordance with section
553 of title 5, United States Code. If the Board of Directors
makes such a determination with respect to an activity, the Corporation
shall have authority to order that no savings association may engage in
the activity directly.
(B) AUTHORITY OF DIRECTOR.--This section does not limit
the authority of the Office of Thrift Supervision to issue regulations
to promote safety and soundness or to enforce compliance with other
applicable laws.
(C) Additional authority of fdic to prevent serious risks to
insurance fund.--Notwithstanding subparagraph (A), the Corporation
may prescribe and enforce such regulations and issue such orders as the
Corporation determines to be necessary to prevent actions or practices
of savings associations that pose a serious threat to the Deposit
Insurance Fund.
(4) ``SUBSIDIARY'' DEFINED.--As used in this
subsection, the term "subsidiary" does not include an insured
depository institution.
(5) Applicability to certain savings
banks.--Subparagraphs (A) and (B) of paragraph (1) of this
subsection do not apply to--
(A) any Federal savings bank that was chartered prior to October
15, 1982, as a savings bank under State law, or
(B) a savings association that acquired its principal assets from
an institution that was chartered prior to October 15, 1982, as a
savings bank under State law.
[Codified to 12 U.S.C. 1828(m)]
[Source: Section 2[18(m)] of the Act of September 21, 1950 (Pub.
L. No. 797), effective September 21, 1950, as added by section 221(4)
of title II of the Act of August 9, 1989 (Pub. L. No. 101--73; 103
Stat. 267), effective August 9, 1989; section 8(a)(28) of the Act of
February 15, 2006 (Pub. L. No. 109--173; 119 Stat. 3615), effective
date shall take effect on the day of the merger of the Bank Insurance
Fund and the Savings Association Insurance Fund pursuant to the Federal
Deposit Insurance Reform Act of 2005]
(n) CALCULATION OF CAPITAL.--No appropriate Federal
banking agency shall allow any insured depository institution to
include an unidentifiable intangible asset in its calculation of
compliance with the appropriate capital standard, if such
unidentifiable intangible asset was acquired after April 12, 1989,
except to the extent permitted under
section 5(t) of the Home Owners'
Loan Act.
[Codified to 12 U.S.C. 1828(n)]
[Source: Section 2[18(n)] of the Act of September 21, 1950 (Pub.
L. No. 797), effective September 21, 1950, as added by section 221(4)
of title II of the Act of August 9, 1989 (Pub. L. No. 101--73; 103
Stat. 267), effective August 9, 1989]
(o) REAL ESTATE LENDING.--
(1) UNIFORM REGULATIONS.--Not more than 9 months after
the date of enactment of the Federal Deposit Insurance Corporation
Improvement Act of 1991, each appropriate Federal banking agency shall
adopt uniform regulations prescribing standards for extensions of
credit that are--
(A) secured by liens on interests in real estate; or
(B) made for the purpose of financing the construction of a
building or other improvements to real estate.
(2) STANDARDS.--
{{4-28-06 p.1269}}
(A) CRITERIA.--In prescribing standards under paragraph
(1), the agencies shall consider--
(i) the risk posed to the Deposit Insurance Fund by such
extensions of credit;
(ii) the need for safe and sound operation of insured depository
institution; and
(iii) the availability of credit.
(B) VARIATIONS PERMITTED.--In prescribing standards
under paragraph (1), the appropriate Federal banking agencies may
differentiate among types of loans--
(i) as may be required by Federal statute;
(ii) as may be warranted, based on the risk to the Deposit
Insurance Fund; or
(iii) as may be warranted, based on the safety and soundness of
the institutions.
(3) LOAN EVALUATION STANDARD.--No appropriate Federal
banking agency shall adversely evaluate an investment or a loan made by
an insured depository institution, or consider such a loan to be
nonperforming, solely because the loan is made to or the investment is
in commercial, residential, or industrial property, unless such
investment or loan may affect the institution's safety and soundness.
(4) EFFECTIVE DATE.--The regulations adopted under
paragraph (1) shall become effective not later than 15 months after the
date of enactment of the Federal Deposit Insurance Corporation
Improvement Act of 1991. Such regulations shall continue in effect
except as uniformly amended by the appropriate Federal banking
agencies, acting in concert.
[Codified to 12 U.S.C. 1828(o)]
[Source: Section 2[18(o)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 304(a) of title III of the Act of December 19, 1991 (Pub. L.
No. 102--242; 105 Stat. 2354), effective December 19, 1991; section
8(a)(29) of the Act of February 15, 2006 (Pub. L. No. 109--173; 119
Stat. 3615), effective date shall take effect on the day of the merger
of the Bank Insurance Fund and the Savings Association Insurance Fund
pursuant to the Federal Deposit Insurance Reform Act of
2005]
(p) PERIODIC REVIEW OF CAPITAL STANDARDS.--Each
appropriate Federal banking agency shall, in consultation with the
other Federal banking agencies, biennially review its capital standards
for insured depository institution to determine whether those standards
require sufficient capital to facilitate prompt corrective action to
prevent or minimize loss to the Deposit Insurance Fund, consistent with
section 38.
[Codified to 12 U.S.C. 1828(p)]
[Source: Section 2[18(o)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 305(a) of title III of the Act of December 19, 1991 (Pub. L.
No. 102--242; 105 Stat. 2354), effective December 19, 1991; as
redesignated at section 1605(a)(9) of title XVI of the Act of October
28, 1992 (Pub. L. No. 102--550; 106 Stat. 4086), effective December 19,
1991; section 8(a)(30) of the Act of February 15, 2006 (Pub. L. No.
109--173; 119 Stat. 3615), effective date shall take effect on the day
of the merger of the Bank Insurance Fund and the Savings Association
Insurance Fund pursuant to the Federal Deposit Insurance Reform Act of
2005]
(q) SOVEREIGN RISK.--Section 25C of the Federal Reserve
Act shall apply to every nonmember insured bank in the same manner and
to the same extent as if the nonmember insured bank were a member bank.
[Codified to 12 U.S.C. 1828(q)]
[Source: Section 2[18(q)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 326(b) of title III of the Act of September 23, 1994 (Pub. L.
No. 103--325; 108 Stat. 2229), effective September 23,
1994]
(r) Subsidiary Depository Institutions as Agents for Certain
Affiliates.--
{{4-28-06 p.1270}}
(1) IN GENERAL.--Any bank subsidiary of a bank holding
company may receive deposits, renew time deposits, close loans, service
loans, and receive payments on loans and other obligations as an agent
for a depository institution affiliate.
(2) Bank acting as agent is not a
branch.--Notwithstanding any other provision of law, a bank acting
as an agent in accordance with paragraph (1) for a depository
institution affiliate shall not be considered to be a branch of the
affiliate.
(3) PROHIBITIONS ON ACTIVITIES.--Adepository institution
may not--
(A) conduct any activity as an agent under paragraph (1) or (6)
which such institution is prohibited from conducting as a principal
under any applicable Federal or State law; or
(B) as a principal, have an agent conduct any activity under
paragraph (1) or (6) which the institution is prohibited from
conducting under any applicable Federal or State law.
(4) EXISTING AUTHORITY NOT AFFECTED.--No provision of
this subsection shall be construed as affecting--
(A) the authority of any depository institution to act as an
agent on behalf of any other depository institution under any other
provision of law; or
(B) whether a depository institution which conducts any activity
as an agent on behalf of any other depository institution under any
other provision of law shall be considered to be a branch of such other
institution.
(5) Agency relationship required to be consistent with safe
and sound banking practices.--An agency relationship between
depository institutions under paragraph (1) or (6) shall be on terms
that are consistent with safe and sound banking practices and all
applicable regulations of any appropriate Federal banking agency.
(6) AFFILIATED INSURED SAVINGS ASSOCIATIONS.--An insured
savings association which was an affiliate of a bank on July 1, 1994,
may conduct activities as an agent on behalf of such bank in the same
manner as an insured bank affiliate of such bank may act as agent for
such bank under this subsection to the extent such activities are
conducted only in--
(A) any State in which--
(i) the bank is not prohibited from operating a branch under any
provision of Federal or State law; and
(ii) the savings association maintained an office or branch and
conducted business as of July 1, 1994; or
(B) any State in which--
(i) the bank is not expressly prohibited from operating a branch
under a State law described in section 44(a)(2); and
(ii) the savings association maintained a main office and
conducted business as of July 1, 1994.
[Codified to 12 U.S.C. 1828(r)]
{{10-31-08 p.1271}}
[Source: Section 2[18(r)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 101(d) of title I of the Act of September 29, 1994 (Pub. L. No.
103--328; 108 Stat. 2342), effective September 29,
1995]
(s) PROHIBITION OF CERTAIN AFFILIATIONS.--
(1) IN GENERAL.--No depository institution may be an
affiliate of, be sponsored by, or accept financial support, directly or
indirectly, from any Government-sponsored enterprise.
(2) Exception for members of a federal home loan
bank.--Paragraph (1) shall not apply with respect to the membership
of a depository institution in a Federal home loan bank.
(3) ROUTINE BUSINESS FINANCING.--Paragraph (1) shall not
apply with respect to advances or other forms of financial assistance
provided by a Government-sponsored enterprise pursuant to the statutes
governing such enterprise.
(4) STUDENT LOANS.--
(A) In general
This subsection shall not apply to any arrangement between the
Holding Company (or any subsidiary of the Holding Company other than
the Student Loan Marketing Association) and a depository institution,
if the Secretary approves the affiliation and determines that--
(i) the reorganization of such Association in accordance with
section 1087--3 of title 20 will not be adversely affected by the
arrangement;
(ii) the dissolution of the Association pursuant to such
reorganization will occur before the end of the 2-year period beginning
on the date on which such arrangement is consummated or on such earlier
date as the Secretary deems appropriate: Provided, That the Secretary
may extend this period for not more than 1 year at a time if the
Secretary determines that such extension is in the public interest and
is appropriate to achieve an orderly reorganization of the Association
or to prevent market disruptions in connection with such
reorganization, but no such extensions shall in the aggregate exceed 2
years;
(iii) the Association will not purchase or extend credit to, or
guarantee or provide credit enhancement to, any obligation of the
depository institution;
(iv) the operations of the Association will be separate from the
operations of the depository institution; and
(v) until the "dissolution date" (as that term is defined
in section 1087--3 of title 20) has occurred, such depository
institution will not use the trade name or service mark "Sallie
Mae" in connection with any product or service it offers if the
appropriate Federal banking agency for such depository institution
determines that--
(I) the depository institution is the only institution offering
such product or service using the "Sallie Mae" name; and
(II) such use would result in the depository institution having
an unfair competitive advantage over other depository institutions.
(B) Terms and conditions
In approving any arrangement referred to in subparagraph (A) the
Secretary may impose any terms and conditions on such an arrangement
that the Secretary considers appropriate, including--
(i) imposing additional restrictions on the issuance of debt
obligations by the Association; or
(ii) restricting the use of proceeds from the issuance of such
debt.
(C) Additional limitations
In the event that the Holding Company (or any subsidiary of the
Holding Company) enters into such an arrangement, the value of the
Association's "investment portfolio" shall not at any time
exceed the lesser of--
(i) the value of such portfolio on the date of the enactment of
this subsection; or
(ii) the value of such portfolio on the date such an arrangement
is consummated. The term "investment portfolio" shall mean all
investments shown on the consolidated balance sheet of the Association
other than--
{{10-31-08 p.1272}}
(I) any instrument or assets described in section 1087--2(d) of
title 20, as such section existed on the day before the date of the
repeal of such section;
(II) any direct noncallable obligations of the United States or
any agency thereof for which the full faith and credit of the United
States is pledged; or
(III) cash or cash equivalents.
(D) Enforcement
The terms and conditions imposed under subparagraph (B) may be
enforced by the Secretary in accordance with section 1087--3 of title
20.
(E) Definitions
For purposes of this paragraph, the following definition shall
apply--
(i) Association; Holding Company
Notwithstanding any provision in section 1813 of this title, the
terms "Association" and "Holding Company" have the same
meanings as in section 1087--3(i) of title 20.
(ii) Secretary
The term "Secretary" means the Secretary of the Treasury.
(5) ``Government-sponsored enterprise'' defined
For purposes of this subsection, the term "Government-sponsored
enterprise" has the meaning given to such term in section
1404(e)(1)(A) of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989.
[Codified to 12 U.S.C. 1828(s)]
[Source: Section 2[18(s)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 2615(b) of title II of the Act of September 30, 1996 (Pub. L.
No. 104--208; 110 Stat. 3009--479), effective January 1, 1996; section
438(b) of title IV of the Act of August 14, 2008 (Pub. L. No. 110--315;
122 Stat. 3258), effective August 14, 2008]
(t) RECORDKEEPING REQUIREMENTS.--
(1) REQUIREMENTS.--Each appropriate Federal banking
agency, after consultation with and consideration of the views of the
Commission, shall establish recordkeeping requirements for banks
relying on exceptions contained in paragraphs (4) and (5) of section
3(a) of the Securities Exchange Act of 1934. Such recordkeeping
requirements shall be sufficient to demonstrate compliance with the
terms of such exceptions and be designed to facilitate compliance with
such exceptions.
(2) AVAILABILITY TO COMMISSION; CONFIDENTIALITY.--Each
appropriate Federal banking agency shall make any information required
under paragraph (1) available to the Commission upon request.
Notwithstanding any other provision of law, the Commission shall not be
compelled to disclose any such information. Nothing in this paragraph
shall authorize the Commission to withhold information from Congress,
or prevent the Commission from complying with a request for information
from any other Federal department or agency or any self-regulatory
organization requesting the information for purposes within the scope
of its jurisdiction, or complying with an order of a court of the
United States in an action brought by the United States or the
Commission. For purposes of section 552 of title 5, United States Code,
this paragraph shall be considered a statute described in subsection
(b)(3)(B) of such section 552.
(3) DEFINITION.--As used in this subsection the term
"Commission" means the Securities and Exchange Commission.
[Codified to 12 U.S.C. 1828(t)]
[Source: Section 2[18(t)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882) effective September 21, 1950, as added by
section 208 of title II of the Act of November 12, 1999 (Pub. L. No.
106--102; 113 Stat. 1391), effective May 12, 2001]
(u) LIMITATION ON CLAIMS.--
(1) IN GENERAL.--No person may bring a claim against any
Federal banking agency (including in its capacity as conservator or
receiver) for the return of assets of an affiliate or controlling
shareholder of the insured depository institution transferred to, or
for the benefit of, an insured depository institution by such affiliate
or controlling shareholder of
{{10-31-08 p.1272.01}}the insured depository institution, or a claim
against such Federal banking agency for monetary damages or other legal
or equitable relief in connection with such transfer, if at the time of
the transfer--
(A) the insured depository institution is subject to any
direction issued in writing by a Federal banking agency to increase its
capital; and
(B) for that portion of the transfer that is made by an entity
covered by section 5(g) of the
Bank Holding Company Act of 1956 or section 45 of this Act, the Federal
banking agency has followed the procedure set forth in such section.
(2) DEFINITION OF CLAIM.--For purposes of paragraph (1),
the term "claim"--
(A) means a cause of action based on Federal or State law that--
(i) provides for the avoidance of preferential or fraudulent
transfers or conveyances; or
(ii) provides similar remedies for preferential or fraudulent
transfers or conveyances; and
(B) does not include any claim based on actual intent to hinder,
delay, or defraud pursuant to such a fraudulent transfer or conveyance
law.
[Codified to 12 U.S.C. 1828(u)]
[Source: Section 2[18(t)] of the Act of September 21, 1950
(Pub. L. No. 797; 64 Stat. 882), effective September 21, 1950, as
added by section 730 of title III of the Act of November 12, 1999
(Pub. L. 106--102; 113 Stat. 1476), effective November 12, 1999;
redesignated as subsection (u) by section 1207(b)(1) of title XII of
the Act of December 27, 2000 (Pub. L. No. 106--569; 114 Stat. 3034,
effective December 27, 2000; section 702(b) of title VII of the Act of
October 13, 2006 (Pub. L. No. 109--351; 120 Stat. 1985), effective
October 13, 2006]
(v) LOANS BY INSURED INSTITUTIONS ON THEIR OWN STOCK.--
(1) GENERAL PROHIBITION.--No insured depository
institution may make any loan or discount on the security of the shares
of its own capital stock.
(2) EXCLUSION.--For purposes of this subsection, an
insured depository institution shall not be deemed to be making a loan
or discount on the security of the shares of its own capital stock if
it acquires the stock to prevent loss upon a debt previously contracted
for in good faith.
[Codified to 12 U.S.C. 1828(v)]
[Source: Section 2[18(v)] of the Act of September 21, 1950
(Pub. L. No. 797; 64 Stat. 882), effective September 21, 1950, as
added by section 1207(b)(2) of the Act of December 27, 2000 (Pub. L.
No. 106--569; 114 Stat. 3034), effective December 27,
2000]
(w) Written Employment References May Contain Suspicions of
Involvement in Illegal Activity--
(1) AUTHORITY TO DISCLOSE INFORMATION.--Notwithstanding
any other provision of law, any insured depository institution, and any
director, officer, employee, or agent of such institution, may disclose
in any written employment reference relating to a current or former
institution-affiliated party of such institution which is provided to
another insured depository institution in response to a request from
such other institution, information concerning the possible involvement
of such institution-affiliated party in potentially unlawful activity.
(2) INFORMATION NOT REQUIRED.--Nothing in paragraph (1)
shall be construed, by itself, to create any affirmative duty to
include any information described in paragraph (1) in any employment
reference referred to in paragraph (1).
(3) MALICIOUS INTENT.--Notwithstanding any other
provision of this subsection, voluntary disclosure made by an insured
depository institution, and any director, officer, employee, or agent
of such institution under this subsection concerning potentially
unlawful activity that is made with malicious intent, shall not be
shielded from liability from the person identified in the disclosure.
(4) DEFINITION.--For purposes of this subsection, the
term "insured depository institution" includes any uninsured
branch or agency of a foreign bank.
{{10-31-08 p.1273}}
[Codified to 12 U.S.C. 1828w]
[Source: Section 2[18(w)] of the Act of September 21, 1950
(Pub. L. No. 797; 64 Stat. 882), effective September 21, 1950; as
added by Section 355 of Title III of the Act of October 26, 2001
(Pub. L. No. 107--56; 115 Stat. 324), effective October 26, 2001; as
amended by Section 6203(j) of title VI of the Act of December 17, 2004
(Pub. L. No. 108--458; 118 Stat. 3747), effective October 26,
2001]
(x) Privileges Not Affected by Disclosure to Banking Agency or
Supervisor.--
(1) IN GENERAL.--The submission by any person of any
information to any Federal banking agency, State bank supervisor, or
foreign banking authority for any purpose in the course of any
supervisory or regulatory process of such agency, supervisor, or
authority shall not be construed as waiving, destroying, or otherwise
affecting any privilege such person may claim with respect to such
information under Federal or State law as to any person or entity other
than such agency, supervisor, or authority.
(2) RULE OF CONSTRUCTION.--No provision of paragraph (1)
may be construed as implying or establishing that--
(A) any person waives any privilege applicable to information
that is submitted or transferred under any circumstance to which
paragraph (1) does not apply; or
(B) any person would waive any privilege applicable to any
information by submitting the information to any Federal banking
agency, State bank supervisor, or foreign banking authority, but for
this subsection.
[Codified to 12 U.S.C.. 1828x]
[Source: Section 2[18(x)] of the Act of September 21, 1950
(Pub. L. No. 797; 64 Stat. 882) effective September 21, 1950 as added
by Section 607(a) of title VII of the Act of October 13, 2006 (Pub. L.
No. 109--351; 120 Stat. 1982), effective October 13, 2006]
NOTES
Derivation. Section 18(a) derives from the second paragraph of
section 12B(v) of the Federal Reserve Act, as added by paragraph (9) of
the Act of June 16, 1934 (Pub. L. No. 362; 48 Stat. 970), effective
June 16, 1934, and as amended by section 101[12B(v)(2)] of title I of
the Act of August 23, 1935 (Pub. L. No. 305; 49 Stat. 701), effective
August 23, 1935. Sections 18(b)-(g) derive from sections 12B(v)(3)-(8)
of the Federal Reserve Act, as added by section 101[12B(v)(3)-(8)] of
title I of the Act of August 23, 1935 (Pub. L. No. 305; 49 Stat. 701),
effective August 23, 1935. Section 12B(v)(4) of the Federal Reserve Act
was amended by section 5 of the Act of August 17, 1950 (Pub. L. No.
706; 64 Stat. 457), effective August 17, 1950. By section 1 of the Act
of September 21, 1950 (Pub. L. No. 797; 64 Stat. 873), effective
September 21, 1950, section 12B of the Federal Reserve Act was
withdrawn as a part of that Act and was made a separate act known as
the "Federal Deposit Insurance Act."
Section 18(h) was enacted by section 2[18(h)] of the Act of
September 21, 1950 (Pub. L. No. 797; 64 Stat. 893), effective September
21, 1950).
Section 18(l) was added by section 301 of
title III of the Act of November 10, 1978 (Pub. L. No. 95--630; 92
Stat. 3676), effective March 10, 1979.
Sections 18(m) and (n) were added by section 221(4) of the Act of
August 9, 1989 (Pub. L. No. 101--73; 103 Stat. 267), effective August
9, 1989.
Implementing Regulations. FDIC regulations regarding
the display of official signs and advertising of membership in the FDIC
are entitled "Part 328--Advertisement of Membership." FDIC
regulations issued pursuant to section 18(g) of the Federal Deposit
Insurance Act relating to the payment and advertisement of interest on
deposits are entitled "Part 329--Interest on Deposits." Both
parts appear under the "FDIC Rules and Regulations" tabcard.
Effective Date: The amendments made by Public Law
108--458 to Public Law 107--56 of the United States Code, the Federal
Deposit Insurance Act, and any other provison of law shall take effect
as if such amendments had been included in Public Law 107--56, as of
its effective date
[The page following this is 1291.]
*See also section 5(o)(1)(D) of the Home Owners Loan Act of
1933 (12 USC 1464(o)(1)(D)). Go Back to Text
*Editor's Note. So in statute as enacted. Should
probably be "section 44(g)(4))". Go Back to Text
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