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8000 - Miscellaneous Statutes and Regulations
{{4-28-06 p.8712}}
(C) Upon the issuance of such a certificate by the Director, such
Federal savings association (i) shall no longer be subject to the
provisions of this section or the regulations of the Director made
pursuant thereto, (ii) shall be entitled to have returned to it any
securities which it may have deposited with State authorities, and
(iii) shall not exercise thereafter any of the powers granted by this
section without first applying for and obtaining a new permit to
exercise such power pursuant to the provisions of this section.
(D) The Director may prescribe regulations necessary to enforce
compliance with the provisions of this subsection.
(10) REVOCATION.--(A) In addition to the authority
conferred by other law, if, in the opinion of the Director, a Federal
savings association is unlawfully or unsoundly exercising, or has
unlawfully or unsoundly exercised, or has failed for a period of 5
consecutive years to exercise, the powers granted by this subsection or
otherwise fails or has failed to comply with the requirements of this
subsection, the Director may issue and serve upon the association a
notice of intent to revoke the authority of the association to exercise
the powers granted by this subsection. The notice shall contain a
statement of the facts constituting the alleged unlawful or unsound
exercise of powers, or failure to exercise powers, or failure to
comply, and shall fix a time and place at which a hearing will be held
to determine whether an order revoking authority to exercise such
powers should issue against the association.
(B) Such hearing shall be conducted in accordance with the
provisions of subsection (d)(1)(B), and subject to judicial review as
therein provided, and shall be fixed for a date not earlier than 30
days and not later than 60 days after service of such notice unless the
Director sets an earlier or later date at the request of any Federal
savings association so served.
(C) Unless the Federal savings association so served shall appear
at the hearing by a duly authorized representative, it shall be deemed
to have consented to the issuance of the revocation order. In the event
of such consent, or if upon the record made at any such hearing, the
Director shall find that any allegation specified in the notice of
charges has been established, the Director may issue and serve upon the
association an order prohibiting it from accepting any new or
additional trust accounts and revoking authority to exercise any and
all powers granted by this subsection, except that such order shall
permit the association to continue to service all previously accepted
trust accounts pending their expeditious divestiture or termination.
(D) A revocation order shall become effective not earlier than
the expiration of 30 days after service of such order upon the
association so served (except in the case of a revocation order issued
upon consent, which shall become effective at the time specified
therein), and shall remain effective and enforceable, except to such
extent as it is stayed, modified, terminated, or set aside by action of
the Director or a reviewing court.
(o) CONVERSION OF STATE SAVINGS BANKS.--(1) Subject to the
provisions of this subsection and under regulations of the Director,
the Director may authorize the conversion of a State-chartered savings
bank into a Federal savings bank, if such conversion is not in
contravention of State law, and provide for the organization,
incorporation, operation, examination, and regulation of such
institution.
(2)(A) Any Federal savings bank chartered pursuant to this
subsection shall continue to be insured by the Deposit Insurance Fund.
(B) The Director shall notify the Corporation of any application
under this Act for conversion to a Federal charter by an institution
insured by the Corporation, shall consult with the Corporation before
disposing of the application, and shall notify the Corporation of the
Director's determination with respect to such application.
(C) Notwithstanding any other provision of law, if the
Corporation determines that conversion into a Federal stock savings
bank or the chartering of a Federal stock savings bank is necessary to
prevent the default of a savings bank it insures or to reopen a savings
bank in default that it insured, or if the Corporation determines, with
the
{{4-30-97 p.8713}}concurrence of the
Director, that severe financial conditions exist that threaten the
stability of a savings bank insured by the Corporation and that such a
conversion or charter is likely to improve the financial condition of
such savings bank, the Corporation shall provide the Director with a
certificate of such determination, the reasons therefor in conformance
with the requirements of this Act, and the bank shall be converted or
chartered by the Director, pursuant to the regulations thereof, from
the time the Corporation issues the certificate.
(D) A bank may be converted under subparagraph (C) only if the
board of trustees of the bank--
(i) has specified in writing that the bank is in danger of
closing or is closed, or that severe financial conditions exist that
threaten the stability of the bank and a conversion is likely to
improve the financial condition of the bank; and
(ii) has requested in writing that the Corporation use the
authority of subparagraph (C).
(E)(i) Before making a determination under subparagraph (D), the
Corporation shall consult that State bank supervisor of the State in
which the bank in danger of closing is chartered. The State bank
supervisor shall be given a reasonable opportunity, and in no event
less than 48 hours, to object to the use of the provisions of
subparagraph (D).
(ii) If the State supervisor objects during such period, the
Corporation may use the authority of subparagraph (D) only by an
affirmative vote of three-fourths of the Board of Directors. The Board
of Directors shall provide the State supervisor, as soon as
practicable, with a written certification of its determination.
(3) A Federal savings bank chartered under this subsection shall
have the same authority with respect to investments, operations, and
activities, and shall be subject to the same restrictions, including
those applicable to branching and discrimination, as would apply to it
if it were chartered as a Federal savings bank under any other
provision of this Act.
(p) CONVERSIONS.--(1) Nothwithstanding any other provision
of law, and consistent with the purposes of this Act, the Director may
authorize (or in the case of a Federal savings association, require)
the conversion of any mutual savings association or Federal mutual
savings bank that is insured by the Corporation into a Federal stock
savings association or Federal stock savings bank, or charter a Federal
stock savings association of Federal stock savings bank to acquire the
assets of, or merge with such a mutual institution under the
regulations of the Director.
(2) Authorizations under this subsection may be made only--
(A) if the Director has determined that severe financial
conditions exist which threaten the stability of an association and
that such authorization is likely to improve the financial condition of
the association.
(B) when the Corporation has contracted to provide assistance to
such association under section
13 of the Federal Deposit Insurance Act, or
(C) to assist an institution in receivership.
(3) A Federal savings bank chartered under this subsection shall
have the same authority with respect to investments, operations and
activities, and shall be subject to the same restrictions, including
those applicable to branching and discrimination, as would apply to it
if it were chartered as a Federal savings bank under any other
provision of this Act, and may engage in any investment, activity, or
operation that the institution it acquired was engaged in if that
institution was a Federal savings bank, or would have been authorized
to engage in had that institution converted to a Federal charter.
(q) TYING ARRANGEMENTS.--(1) A savings association may not
in any manner extend credit, lease, or sell property of any kind, or
furnish any service, or fix or vary the consideration for any of the
foregoing, on the condition or requirement--
(A) that the customer shall obtain additional credit, property,
or service from such savings association, or from any service
corporation or affiliate of such association, other than a loan,
discount, deposit, or trust service;
(B) that the customer provide additional credit, property, or
service to such association, or to any service corporation or affiliate
of such association, other than those
{{4-30-97 p.8714}}related to and usually
provided in connection with a similar loan, discount, deposit, or trust
service; and
(C) that the customer shall not obtain some other credit,
property, or service from a competitor or such association, or from a
competitor of any service corporation of affiliate of such association,
other than a condition or requirement that such association shall
reasonably impose in connection with credit transactions to assure the
soundness of credit.
(2)(A) Any person may sue for and have injunctive relief, in any
court of the United States having jurisdiction over the parties,
against threatened loss or damage by reason of a violation of paragraph
(1), under the same conditions and principles as injunctive relief
against threatened conduct that will cause loss or damage is granted by
courts of equity and under the rules governing such proceedings.
(B) Upon the execution of proper bond against damages for an
injunction improvidently granted and a showing that the danger of
irreparable loss or damage is immediate, a preliminary injunction may
issue.
(3) Any person injured by a violation of paragraph (1) may bring
an action in any district court of the United States in which the
defendant resides or is found or has an agent, without regard to the
amount in controversy, or in any other court of competent jurisdiction,
and shall be entitled to recover three times the amount of the damages
sustained, and the cost of suit, including a reasonable attorney's fee.
Any such action shall be brought within 4 years from the date of the
occurrence of the violation.
(4) Nothing contained in this subsection affects in any manner
the right of the United States or any other party to bring an action
under any other law of the United States or of any State, including any
right which may exist in addition to specific statutory authority,
challenging the legality of any act or practice which may be proscribed
by this subsection. No regulation or order issued by the Director under
this subsection shall in any manner constitute a defense to such
action.
(5) For purposes of this subsection, the term "loan"
includes obligations and extensions or advances of credit.
(6) EXCEPTIONS.--The Director may, by regulation or
order, permit such exceptions to the prohibitions of this subsection as
the Director considers will not be contrary to the purposes of this
subsection and which conform to exceptions granted by the Board of
Governors of the Federal Reserve System pursuant to section 106(b) of
the Bank Holding Company Act Amendments of 1970.
(r) OUT-OF-STATE BRANCHES--(1) No Federal savings
association may establish, retain, or operate a branch outside the
State in which the Federal savings association has its home office,
unless the association qualifies as a domestic building and loan
association under section 7701(a)(19) of the Internal Revenue Code of
1986 or meets the asset composition test imposed by subparagraph
(C) of that section on institutions seeking so to qualify, or
qualifies as a qualified thrift lender, as determined under section
10(m) of this Act. No out-of-State branch so established shall be
retained or operated unless the total assets of the Federal savings
association attributable to all branches of the Federal savings
association in that State would qualify the branches as a whole, were
they otherwise eligible, for treatment as a domestic building and
loan association under section 7701(a)(19), or as a qualified
thrift lender, as determined under section 10(m) of this Act, as
applicable.
(2) The limitations of paragraph (1) shall not apply if--
(A) the branch results from a transaction authorized under
section 13(k) of the Federal
Deposit Insurance Act;
(B) the branch was authorized for the Federal savings association
prior to October 15, 1982;
(C) the law of the State where the branch is located, or is to be
located, would permit establishment of the branch if the association
was a savings association or savings bank chartered by the State in
which its home office is located; or
{{4-30-97 p.8714.01}}
(D) the branch was operated lawfully as a branch under State law
prior to the association's conversion to a Federal charter.
(3) The Director, for good cause shown, may allow Federal savings
associations up to 2 years to comply with the requirements of this
subsection.
(s) MINIMUM CAPITAL REQUIREMENTS.--
(1) IN GENERAL.--Consistent with the purposes of
section 908 of the
International Lending Supervision Act of 1983 and the capital
requirements established pursuant to such section by the appropriate
Federal banking agencies (as defined in section 903(1) of
such
{{12-29-06 p.8715}}Act), the Director
shall require all savings associations to achieve and maintain adequate
capital by--
(A) establishing minimum levels of capital for savings
associations; and
(B) using such other methods as the Director determines to be
appropriate.
(2) Minimum capital levels may be determined by director
case-by-case.--The Director may, consistent with subsection (t),
establish the minimum level of capital for a savings association at
such amount or at such ratio of capital-to-assets as the Director
determines to be necessary or appropriate for such association in light
of the particular circumstances of the association.
(3) UNSAFE OR UNSOUND PRACTICE.--In the Director's
discretion, the Director may treat the failure of any savings
association to maintain capital at or above the minimum level required
by the Director under this subsection or subsection (t) as an unsafe or
unsound practice.
(4) Directive to increase capital.—
(A) PLAN MAY BE REQUIRED.--In addition to any other
action authorized by law, including paragraph (3), the Director may
issue a directive requiring any savings association which fails to
maintain capital at or above the minimum level required by the Director
to submit and adhere to a plan for increasing capital which is
acceptable to the Director.
(B) ENFORCEMENT OF PLAN.--Any directive issued and plan
approved under subparagraph (A) shall be enforceable under
section 8 of the Federal
Deposit Insurance Act to the same extent and in the same manner as an
outstanding order which was issued under
section 8 of the Federal
Deposit Insurance Act and has become final.
(5) PLAN TAKEN INTO ACCOUNT IN OTHER PROCEEDINGS.--The
Director may--
(A) consider a savings association's progress in adhering to any
plan required under paragraph (4) whenever such association of any
affiliate of such association (including any company which controls
such association) seeks the Director's approval for any proposal which
would have the effect of diverting earnings, diminishing capital, or
otherwise impeding such association's progress in meeting the minimum
level of capital required by the Director; and
(B) disapprove any proposal referred to in subparagraph (A) if
the Director determines that the proposal would adversely affect the
ability of the association to comply with such plan.
(t) CAPITAL STANDARDS --
(1) IN GENERAL.--
(A) REQUIREMENT FOR STANDARDS TO BE PRESCRIBED.-- The
Director shall, by regulation, prescribe and maintain uniformly
applicable capital standards for savings associations. Those standards
shall include--
(i) a leverage limit;
(ii) a tangible capital requirement; and
(iii) a risk-based capital requirement.
(B) COMPLIANCE.--A savings association is not in
compliance with capital standards for purposes of this subsection
unless it complies with all capital standards prescribed under this
paragraph.
(C) STRINGENCY.--The standards prescribed under this
paragraph shall be no less stringent than the capital standards
applicable to national banks.
(D) DEADLINE FOR REGULATIONS.--The Director shall
promulgate final regulations under this paragraph not later than 90
days after the date of enactment of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989, and those regulations shall
become effective not later than 120 days after the date of enactment.
(2) CONTENT OF STANDARDS.--
(A) LEVERAGE LIMIT.--The leverage limit prescribed under
paragraph (1) shall require a savings association to maintain core
capital in an amount not less than 3 percent of the savings
association's total assets.
{{12-29-06 p.8716}}
(B) TANGIBLE CAPITAL REQUIREMENT.--The tangible capital
requirement prescribed under paragraph (1) shall require a savings
association to maintain tangible capital in an amount not less than 1.5
percent of the savings association's total assets.
(C) RISK-BASED CAPITAL REQUIREMENT.--Notwithstanding
paragraph (1)(C), the risk-based capital requirement prescribed under
paragraph (1) may deviate from the risk-based capital standards
applicable to national banks to reflect interest-rate risk or other
risks, but such deviations shall not, in the aggregate, result in
materially lower levels of capital being required of savings
associations under the risk-based capital requirement than would be
required under the risk-based capital standards applicable to national
banks.
(3) TRANSITION RULE.--
(A) Certain qualifying supervisory goodwill included in
calculating core capital.--Notwithstanding paragraph (9)(A), an
eligible savings association may include qualifying supervisory
goodwill in calculating core capital. The amount of qualifying
supervisory goodwill that may be included may not exceed the applicable
percentage of total assets set forth in the following table:
| For the
following period: |
The applicable percentage is:
|
|---|
| Prior to January 1, 1992 |
1.500 percent |
| January 1,
1992-December 31, 1992 |
1.000 percent |
| January 1,
1993-December 31, 1993 |
0.750 percent |
| January 1,
1994-December 31, 1994 |
0.375 percent
|
| Thereafter |
0 percent
|
(B) ELIGIBLE SAVINGS ASSOCIATIONS.--For purposes
of subparagraph (A), a savings association is an eligible savings
association so long as the Director determines that--
(i) the savings association's management is competent;
(ii) the savings association is in substantial compliance with
all applicable statutes, regulations, orders, and supervisory
agreements and directives; and
(iii) the savings association's management has not engaged in
insider dealing, speculative practices, or any other activities that
have jeopardized the association's safety and soundness or contributed
to impairing the association's capital.
(4) REPEALED.
{{4-28-06 p.8717}}
(D) QUARTERLY VALUATION.--The fair market value of
purchased mortgage servicing rights shall be determined not less often
than quarterly.
(5) Separate capitalization required for certain
subsidiaries.--
(A) IN GENERAL.--In determining compliance with capital
standards prescribed under paragraph (1), all of a savings
association's investments in and extensions of credit to any subsidiary
engaged in activities not permissible for a national bank shall be
deducted from the savings association's capital.
(B) EXCEPTION FOR AGENCY ACTIVITIES.--Subparagraph (A)
shall not apply with respect to a subsidiary engaged, solely as agent
for its customers, in activities not permissible for a national bank
unless the Corporation, in its sole discretion, determines that, in the
interests of safety and soundness, this subparagraph should cease to
apply to that subsidiary.
(C) OTHER EXCEPTIONS.--Subparagraph (A) shall not apply
with respect to any of the following:
(i) MORTGAGE BANKING SUBSIDIARIES.--A savings
association's investments in and extensions of credit to a subsidiary
engaged solely in mortgage-banking activities.
(ii) SUBSIDIARY INSURED DEPOSITORY INSTITUTIONS.--A
savings association's investments in and extensions of credit to a
subsidiary--
(I) that is itself an insured depository institution or a company
the sole investment of which is an insured depository institution, and
(II) that was acquired by the parent insured depository
institution prior to May 1, 1989.
(iii) CERTAIN FEDERAL SAVINGS BANKS.--Any Federal
savings association existing as a Federal savings association on the
date of enactment of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989--
(I) that was chartered prior to October 15, 1982, as a savings
bank or a cooperative bank under State law; or
(II) that acquired its principal assets from an association that
was chartered prior to October 15, 1982, as a savings bank or a
cooperative bank under State law.
(D) TRANSITION RULE.--
(i) INCLUSION IN CAPITAL.--Notwithstanding subparagraph
(A), if a savings association's subsidiary was, as of April 12, 1989,
engaged in activities not permissible for a national bank, the savings
association may include in calculating capital the applicable
percentage (set forth in clause(ii)) of the lesser of--
(I) the savings association's investments in and extensions of
credit to the subsidiary on April 12, 1989; or
(II) the savings association's investments in and extensions of
credit to the subsidiary on the date as of which the savings
association's capital is being determined.
(ii) APPLICABLE PERCENTAGE.--For purposes of clause (i),
the applicable percentage is as follows:
| For the
following period: |
The applicable percentage is:
|
|---|
|
| Prior to July 1, 1990 |
100 percent |
| July 1, 1990-June
30, 1991 |
90 percent |
| July 1, 1991-October 31,
1992 |
75 percent |
| November 1, 1992-June 30, 1993 |
60
percent |
| July 1, 1993-June 30, 1994 |
40 percent
|
| Thereafter |
0 percent
|
(iii) Agency discretion to prescribe greater
percentage.--Subject to clauses (iv), (v), and (vi), the Director
may prescribe by order, with respect to a particular qualified savings
association, an applicable percentage greater than that provided in
clause (ii) if the Director determines, in the Director's sole
discretion, that the use of the greater percentage, under the
circumstances--
(I) would not constitute an unsafe or unsound
practice;
{{4-28-06 p.8718}}
(II) would not increase the risk to the Deposit Insurance Fund;
and
(III) would not be likely to result in the association's being in
an unsafe or unsound condition.
(iv) Substantial compliance with approved capital
plan.--In the case of a savings association which is subject to a
plan submitted under paragraph (7)(D) of this subsection or an order
issued under this subsection, a directive issued or plan approved under
subsection (s) of this section, or a capital restoration plan approved
or order issued under section
38 or 39 of the
Federal Deposit Insurance Act, an order issued under clause (iii) with
respect to the association shall be effective only so long as the
association is in substantial compliance with such plan, directive, or
order.
(v) LIMITATION ON INVESTMENTS TAKEN INTO ACCOUNT.--In
prescribing the amount by which an applicable percentage under clause
(iii) may exceed the applicable percentage under clause (ii) with
respect to a particular qualified savings association, the Director may
take into account only the sum of--
(I) the association's investments in, and extensions of credit
to, the subsidiary that were made on or before April 12, 1989; and
(II) the association's investments in, and extensions of credit
to, the subsidiary that were made after April 12, 1989, and were
necessary to complete projects initiated before April 12, 1989.
(vi) LIMIT.--The applicable percentage limit allowed by
the Director in an order under clause (iii) shall not exceed the
following limits:
| For the
following period: |
The limit is: |
|---|
|
| Prior to
July 1, 1994 |
75 percent |
| July 1, 1994 through June 30,
1995 |
60 percent |
| July 1, 1995 through June 30, 1996 |
40
percent |
| After June 30, 1996 |
0 percent
|
(vii) Critically undercapitalized
institution.--In the case of a savings association that becomes
critically undercapitalized (as defined in section 38, of the Federal
Deposit Insurance Act as determined under this subparagraph without
applying clause (iii), clauses (iii) through (v) shall be applied by
substituting "Corporation" for "Director" each place such
term appears.
(viii) QUALIFIED SAVINGS ASSOCIATION DEFINED.--For
purposes of clause (iii), the term "qualified savings
association" means an eligible savings association (as defined in
paragraph (3)(B)) which is subject to this paragraph solely because of
the real estate investments or other real estate activities of the
association's subsidiary, and--
(I) is adequately capitalized (as defined in
section 38 of the Federal
Deposit Insurance Act; or
(II) is in compliance with an approved capital restoration plan
meeting the requirements of section 38 of the Federal Deposit Insurance
Act, and is not critically undercapitalized (as defined in such
section).
(ix) FDIC's discretion to prescribe lesser
percentage.--The Corporation may prescribe by order, with respect
to a particular savings association, an applicable percentage less than
that provided in clause (ii) if the Corporation determines, in its sole
discretion, that the use of a greater percentage would, under the
circumstances, constitute an unsafe or unsound practice or be likely to
result in the association's being in an unsafe or unsound condition.
(E) Consolidation of subsidiaries not separately
capitalized.--In determining compliance with capital standards
prescribed under paragraph (1), the assets and liabilities of each of a
savings association's subsidiaries (other than any subsidiary described
in subparagraph (C)(ii) shall be consolidated with the savings
association's assets and liabilities, unless all of the savings
association's investments in and extensions of credit to the subsidiary
are deducted from the savings association's capital pursuant to
subparagraph (A).
{{12-29-06 p.8719}}
(6) Consequences of failing to comply with capital
standards.--
(A) PRIOR TO JANUARY 1, 1991--Prior to January 1, 1991,
the Director--
(i) may restrict the asset growth of any savings association not
in compliance with capital standards; and
(ii) shall, beginning 60 days following the promulgation of final
regulations under this subsection, require any savings association not
in compliance with capital standards to submit a plan under subsection
(s)(4)(A) that--
(I) addresses the savings association's need for increased
capital;
(II) describes the manner in which the savings association will
increase its capital so as to achieve compliance with capital
standards;
(III) specifies the types and levels of activities in which the
savings association will engage;
(IV) requires any increase in assets to be accompanied by an
increase in tangible capital not less in percentage amount than the
leverage limit then applicable;
(V) requires any increase in assets to be accompanied by an
increase in capital not less in percentage amount than required under
the risk-based capital standard then applicable; and
(VI) is acceptable to the Director.
(B) ON OR AFTER JANUARY 1, 1991.--On or after January 1,
1991, the Director--
(i) shall prohibit any asset growth by any savings association
not in compliance with capital standards, except as provided in
subparagraph (C); and
(ii) shall require any savings association not in compliance with
capital standards to comply with a capital directive issued by the
Director (which may include such restrictions, including restrictions
on the payment of dividends, and on compensation, as the Director
determines to be appropriate).
(C) LIMITED GROWTH EXCEPTION.--The Director may permit
any savings association that is subject to subparagraph (B) to increase
its assets in an amount not exceeding the amount of net interest
credited to the savings association's deposit liabilities if--
(i) the savings association obtains the Director's prior
approval;
(ii) any increase in assets is accompanied by an increase in
tangible capital in an amount not less than 6 percent of the increase
in assets (or, in the Director's discretion if the leverage limit then
applicable is less than 6 percent, in an amount equal to the increase
in assets multiplied by the percentage amount of the leverage limit);
(iii) any increase in assets is accompanied by an increase in
capital not less in percentage amount than required under the
risk-based capital standard then applicable;
(iv) any increase in assets is invested in low-risk assets, such
as first mortgage loans secured by 1- to 4-family residences and fully
secured consumer loans; and
(v) the savings association's ratio of core capital to total
assets is not less than the ratio existing on January 1, 1991.
(D) Additional restrictions in case of excessive risks or
rates.--The Director may restrict the asset growth of any savings
association that the Director determines is taking excessive risks or
paying excessive rates for deposits.
(E) Failure to comply with plan, regulation, or
order.--The Director shall treat as an unsafe and unsound practice
any material failure by a savings association to comply with any plan,
regulation, or order under this paragraph.
(F) EFFECT ON OTHER REGULATORY AUTHORITY.--This
paragraph does not limit any authority of the Director under other
provisions of law.
(7) EXEMPTION FROM CERTAIN SANCTIONS.--
(A) APPLICATION FOR EXEMPTION.--Any savings association
not in compliance with the capital standards prescribed under paragraph
(1) may not apply to the Director for an exemption from any applicable
sanction or penalty for noncompliance which the Director may impose
under this Act.
(B) EFFECT OF GRANT OF EXEMPTION.--If the Director
approves any savings association's application under subparagraph (A),
the only sanction or penalty to be imposed by the Director under this
Act for the savings association's failure to comply with
{{12-29-06 p.8720}}the capital standards
prescribed under paragraph (1) is the growth limitation contained in
paragraph (6)(B) or paragraph (6)(C), whichever is applicable.
(C) STANDARDS FOR APPROVAL OR DISAPPROVAL.--
(i) APPROVAL.--The Director may approve an application
for an exemption if the Director determines that--
(I) such exemption would pose no significant risk to the Deposit
Insurance Fund;
(II) the savings association's management is competent;
(III) the savings association is in substantial compliance with
all applicable statutes, regulations, orders, and supervisory
agreements and directives; and
(IV) the savings association's management has not engaged in
insider dealing, speculative practices, or any other activities that
have jeopardized the association's safety and soundness or contributed
to impairing the association's capital.
(ii) DENIAL OF REVOCATION OF APPROVAL.--The Director
shall deny any application submitted under clause (i) and revoke any
prior approval granted with respect to any such application if the
Director determines that the association's failure to meet any capital
standards prescribed under paragraph (1) is accompanied by--
(I) a pattern of consistent losses;
(II) substantial dissipation of assets;
(III) evidence of imprudent management or business behavior;
(IV) a material violation of any Federal law, any law of any
State to which such association is subject, or any applicable
regulation; or
(V) any other unsafe or unsound condition or activity, other than
the failure to meet such capital standards.
(D) SUBMISSION OF PLAN REQUIRED.--Any application
submitted under subparagraph (A) shall be accompanied by a plan which--
(i) meets the requirements of paragraph (6)(A)(ii); and
(ii) is acceptable to the Director.
(E) FAILURE TO COMPLY WITH PLAN.--The Director shall
treat as an unsafe and unsound practice any material failure by any
savings association which has been granted an exemption under this
paragraph to comply with the provisions of any plan submitted by such
association under subparagraph (D).
(F) Exemption not available with respect to unsafe or
unsound practices.--This paragraph does not limit any authority of
the Director under any other provision of law, including section 8 of
the Federal Deposit Insurance Act, to take any appropriate action with
respect to any unsafe or unsound practice or condition of any savings
association, other than the failure of such savings association to
comply with the capital standards prescribed under paragraph (1).
(8) Temporary authority to make exceptions for eligible
savings association.--
(A) IN GENERAL.--Notwithstanding paragraph (1)(C), the
Director may, by order, make exceptions to the capital standards
prescribed under paragraph (1) for eligible savings associations. No
exception under this paragraph shall be effective after January 1,
1991.
(B) STANDARDS FOR APPROVAL OR DISAPPROVAL.--In
determining whether to grant an exception under subparagraph (A), the
Director shall apply the same standards as apply to determinations
under paragraph (7)(C).
(9) DEFINITIONS.--For purposes of this subsection--
(A) CORE CAPITAL.--Unless the Director prescribes a more
stringent definition, the term "core capital" means core capital
as defined by the Comptroller of the Currency for national banks, less
any unidentifiable intangible assets.
(B) QUALIFYING SUPERVISORY GOODWILL.--The term
qualifying supervisory goodwill means supervisory goodwill existing on
April 12, 1989, amortized on a straightline basis over the shorter
of--
{{2-29-08 p.8721}}
(i) 20 years, or
(ii) the remaining period for amortization in effect on April 12,
1989.
(C) TANGIBLE CAPITAL.--The term "tangible capital"
means core capital minus any intangible assets (as intangible assets
are defined by the Comptroller of the Currency for national banks).
(D) TOTAL ASSETS.--The term "total assets" means
total assets (as total assets are defined by the Comptroller of the
Currency for national banks) adjusted in the same manner as total
assets would be adjusted in determining compliance with the leverage
limit applicable to national banks if the savings association were a
national bank.
(10) USE OF COMPTROLLER'S DEFINITIONS.--
(A) IN GENERAL.--The standards prescribed under
paragraph (1) shall include all relevant substantive definitions
established by the Comptroller of the Currency for national banks.
(B) SPECIAL RULE.--If the Comptroller of the Currency
has not made effective regulations defining core capital or
establishing a risk-based capital standard, the Director shall use the
definition and standard contained in the Comptroller's most recently
published final regulations.
(u) LIMITS ON LOANS TO ONE BORROWER.--
(1) IN GENERAL.--Section 5200 of the Revised Statutes
shall apply to savings associations in the same manner and to the same
extent as it applies to national banks.
(2) SPECIAL RULES--
(A) Notwithstanding paragraph (1), a savings association may make
loans to one borrower under one of the following clauses:
(i) For any purpose, not to exceed $500,000.
(ii) To develop domestic residential housing units, not to exceed
the lesser of $30,000,000 or 30 percent of the savings association's
unimpaired capital and unimpaired surplus, if--
(I) the savings association is and continues to be in compliance
with the fully phased-in capital standards prescribed under subsection
(t);
(II) the Director, by order, permits the savings association to
avail itself of the higher limit provided by this clause;
(III) loans made under this clause to all borrowers do not, in
aggregate, exceed 150 percent of the savings association's unimpaired
capital and unimpaired surplus; and
(IV) such loans comply with all applicable loan-to-value
requirements.
(B) A savings association's loans to one borrower to finance the
sale of real property acquired in satisfaction of debts previously
contracted in good faith shall not exceed 50 percent of the savings
association's unimpaired capital and unimpaired surplus.
(3) AUTHORITY TO IMPOSE MORE STRINGENT RESTRICTIONS--The
Director may impose more stringent restrictions on a savings
association's loans to one borrower if the Director determines that
such restrictions are necessary to protect the safety and soundness of
the savings association.
(v) REPORTS OF CONDITION.--
(1) IN GENERAL.--Each association shall make reports of
conditions to the Director which shall be in a form prescribed by the
Director and shall contain--
(A) information sufficient to allow the identification of
potential interest rate and credit risk;
(B) a description of any assistance being received by the
association, including the type and monetary value of such assistance;
(C) the identity of all subsidiaries and affiliates of the
association;
(D) the identity, value, type, and sector of investment of all
equity investments of the associations and subsidiaries; and
(E) other information that the Director may prescribe.
{{2-29-08 p.8722}}
(2) PUBLIC DISCLOSURE.--
(A) Reports required under paragraph (1) and all information
contained therein shall be available to the public upon request, unless
the Director determines--
(i) that a particular item or classification of information
should not be made public in order to protect the safety or soundness
of the institution concerned or institutions concerned, or the Deposit
Insurance Fund; or
(ii) that public disclosure would not otherwise be in the public
interest.
(B) Any determination made by the Director under subparagraph (A)
not to permit the public disclosure of information shall be made in
writing, and if the Director restricts any item of information for
savings institutions generally, the Director shall disclose the reason
in detail in the Federal Register.
(C) The Director's determinations under subparagraph (A) shall
not be subject to judicial review.
(3) ACCESS BY CERTAIN PARTIES.--
(A) Notwithstanding paragraph (2), the persons described in
subparagraph (B) shall not be denied access to any information
contained in a report of condition, subject to reasonable requirements
of confidentiality. Those requirements shall not prevent such
information from being transmitted to the Comptroller General of the
United States for analysis.
(B) The following persons are described in this subparagraph for
purposes of subparagraph (A):
(i) the Chairman and ranking minority member of the Committee on
Banking, Housing, and Urban Affairs of the Senate and their designees;
and
(ii) the Chairman and ranking minority member of the Committee on
Banking, Finance and Urban Affairs of the House of Representatives and
their designees.
(4) FIRST TIER PENALTIES.--Any savings association
which--
(A) maintains procedures reasonably adapted to avoid any
inadvertent and unintentional error and, as a result of such an error--
(i) fails to submit or publish any report or information required
by the Director under paragraph (1) or (2), within the period of time
specified by the Director; or
(ii) submits or publishes any false or misleading report or
information; or
(B) inadvertently transmits or publishes any report which is
minimally late,
shall be subject to a penalty of not more than $2,000 for each day
during which such failure continues or such false or misleading
information is not corrected. The savings association shall have the
burden of proving by a preponderance of the evidence that an error was
inadvertent and unintentional and that a report was inadvertently
transmitted or published late.
(5) SECOND TIER PENALTIES.--Any savings association
which--
(A) fails to submit or publish any report or information required
by the Director under paragraph (1) or (2), within the period of time
specified by the Director; or
(B) submits or publishes any false or misleading report or
information,
in a manner not described in paragraph (4) shall be subject to a
penalty of not more than $20,000 for each day during which such failure
continues or such false or misleading information is not corrected.
(6) THIRD TIER PENALTIES.--If any savings association
knowingly or with reckless disregard for the accuracy of any
information or report described in paragraph (5) submits or publishes
any false or misleading report or information, the Director may assess
a penalty of not more than $1,000,000 or 1 percent of total assets,
whichever is less, per day for each day during which such failure
continues or such false or misleading information is not corrected.
(7) ASSESSMENT.--Any penalty imposed under paragraph
(4), (5), or (6) shall be assessed and collected by the Director in the
manner provided in subparagraphs (E), (F), (G), and (I) of section
8(i)(2) of the Federal Deposit Insurance Act (for penalties imposed
under such section), and any such assessment (including the
determination of the amount of the penalty) shall be subject to the
provisions of such subsection.
{{12-29-06 p.8723}}
(8) HEARING.--Any savings association against which any
penalty is assessed under this subsection shall be afforded a hearing
if such savings association submits a request for such hearing within
20 days after the issuance of the notice of assessment.
Section 8(h) of the Federal
Deposit Insurance Act shall apply to any proceeding under this
subsection.
(w) Forfeiture of Franchise for Money Laundering or Cash
Transaction Reporting Offenses.--
(1) IN GENERAL.--
(A) CONVICTION OF TITLE 18 OFFENSE.--
(i) DUTY TO NOTIFY.--If a Federal savings association
has been convicted of any criminal offense under
section 1956 or
1957 of Title 18, the Attorney
General shall provide to the Director a written notification of the
conviction and shall include a certified copy of the order of
conviction from the court rendering the decision.
(ii) Notice of termination; pretermination
hearing.--After receiving written notification from the Attorney
General of such a conviction, the Director shall issue to the savings
association a notice of the Director's intention to terminate all
rights, privileges, and franchises of the savings association and
schedule a pretermination hearing.
(B) CONVICTION OF TITLE 31 OFFENSES.--If a Federal
savings association is convicted of any criminal offense under
section 5322 or
5324 of Title 31, after
receiving written notification from the Attorney General, the Director
may issue to the savings association a notice of the Director's
intention to terminate all rights, privileges, and franchises of the
savings association and schedule a pretermination hearing.
(C) JUDICIAL REVIEW.--Subsection (d)(1)(B)(vii) of this
section shall apply to any proceeding under this subsection.
(2) FACTORS TO BE CONSIDERED.--In determining whether a
franchise shall be forfeited under paragraph (1), the Director shall
take into account the following factors:
(A) The extent to which directors or senior executive officers of
the savings association knew of, were involved in, the commission of
the money laundering offense of which the association was found guilty.
(B) The extent to which the offense occurred despite the
existence of policies and procedures within the savings association
which were designed to prevent the occurrence of any such offense.
(C) The extent to which the savings association has fully
cooperated with law enforcement authorities with respect to the
investigation of the money laundering offense of which the association
was found guilty.
(D) The extent to which the savings association has implemented
additional internal controls (since the commission of the offense of
which the savings association was found guilty) to prevent the
occurrence of any other money laundering offense.
(E) The extent to which the interest of the local community in
having adequate deposit and credit services available would be
threatened by the forfeiture of the franchise.
(3) SUCCESSOR LIABILITY.--This subsection shall not
apply to a successor to the interests of, or a person who acquires, a
savings association that violated a provision of law described in
paragraph (1), if the successor succeeds to the interests of the
violator, or the acquisition is made, in good faith and not for
purposes of evading this subsection or regulations prescribed under
this subsection.
(4) DEFINITION.--The term "senior executive
officer" has the same meaning as in regulations prescribed under
section 32f of the Federal
Deposit Insurance Act.
(x) HOME STATE CITIZENSHIP.--In determining whether a
Federal court has diversity jurisdiction over a case in which a Federal
savings association is a party, the Federal savings association shall
be considered to be a citizen only of the State in which such savings
association has its home office.
[Codified to 12 U.S.C. 1464]
[Source: Section 301 of title III of the Act of August 9, 1989
(Pub. L. No. 101--73; 103 Stat. 282), effective August 9, 1989; as
amended by sections 131 and 133(d) of title I, 441 of title IV, and
501(c) of title V of the Act of December 19, 1991 (Pub. L. No.
102--242; 105 Stat. 2267, 2271, 2381 and 2391, respectively), effective
December 19, 1991; the Act of July 1, 1992 (Pub. L. No. 102--310; 106
Stat. 276), effective July 1, 1992; section 953 of
{{12-29-06 p.8724}}title IX, 1502(b) of
title XV, 1603(d)(8), and 1606(1)--(3) of title XVI of the Act of
October 28, 1992 (Pub. L. No. 102--550; 106 Stat. 3893, 4046, and 4088,
respectively), effective October 28, 1992; sections 206(a) of title II,
322(b) of title III, and 411(c)(2)(D) of title IV of the Act of
September 23, 1994 (Pub. L. No. 103--325; 108 Stat. 2199, 2227, and
2253, respectively), effective September 23, 1994; by sections 2216(b)
and 2303(a)--(d), and f of title II of the Act of September 30, 1996
(Pub. L. No. 104--208; 110 Stat. 3009--413 and 3009-424, respectively),
effective September 30, 1996; section 3(a)(1) of the Act of March 20,
1998 (Pub. L. No. 105--164; 112 Stat. 33), effective March 20, 1998;
section 603 of title VI and 739 of title VII of the Act of November 12,
1999 (Pub. L. No. 106-102; 113 Stat. 1450 and 1481 respectively),
effective November 12, 1999; section 1201(b)(1) of title XII of the Act
of December 27, 2000 (Pub. L. No. 106--569; 114 Stat. 3032, effective
December 27, 2000; section 9(e)(1) of the Act of February 15, 2006
(Pub. L. No. 107--193; 119 Stat. 3617), effective date shall take
effect on the date of the merger of the Bank Insurance Fund and the
Savings Association Insurance Fund pursuant to the Federal Deposit
Insurance Reform Act of 2005; sections 402, 403, 404 of title III and
section 608(a) of title VI of the Act of October 13, 2006 (Pub. L. No.
109--351; 120 Stat. 1974 and 1983), effective October 13,
2006]
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