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U.S. Code as of:
01/19/04
Section 1823. Corporation monies
(a) Investment of Corporation's funds
(1) Authority
Funds held in the Bank Insurance Fund, the Savings Association
Insurance Fund, or the FSLIC Resolution Fund, that are not
otherwise employed shall be invested in obligations of the United
States or in obligations guaranteed as to principal and interest
by the United States.
(2) Limitation
The Corporation shall not sell or purchase any obligations
described in paragraph (1) for its own account, at any one time
aggregating in excess of $100,000, without the approval of the
Secretary of the Treasury. The Secretary may approve a
transaction or class of transactions subject to the provisions of
this paragraph under such conditions as the Secretary may
determine.
(b) Depository accounts
The depository accounts of the Corporation shall be kept with the
Treasurer of the United States, or, with the approval of the
Secretary of the Treasury, with a Federal Reserve bank, or with a
depository institution designated as a depository or fiscal agent
of the United States: Provided, That the Secretary of the Treasury
may waive the requirements of this subsection under such conditions
as he may determine: And provided further, That this subsection
shall not apply to the establishment and maintenance in any
depository institution for temporary purposes of depository
accounts not in excess of $50,000 in any one depository
institution, or to the establishment and maintenance in any
depository institution of any depository accounts to facilitate the
payment of insured deposits, or the making of loans to, or the
purchase of assets of, insured depository institutions. When
designated for that purpose by the Secretary of the Treasury, the
Corporation shall be a depositary of public moneys, except receipts
from customs, under such regulations as may be prescribed by the
said Secretary, and may also be employed as a financial agent of
the Government. It shall perform all such reasonable duties as
depositary of public moneys and financial agent of the Government
as may be required of it.
(c) Assistance to insured depository institutions
(1) The Corporation is authorized, in its sole discretion and
upon such terms and conditions as the Board of Directors may
prescribe, to make loans to, to make deposits in, to purchase the
assets or securities of, to assume the liabilities of, or to make
contributions to, any insured depository institution -
(A) if such action is taken to prevent the default of such
insured depository institution;
(B) if, with respect to an insured bank in default, such action
is taken to restore such insured bank to normal operation; or
(C) if, when severe financial conditions exist which threaten
the stability of a significant number of insured depository
institutions or of insured depository institutions possessing
significant financial resources, such action is taken in order to
lessen the risk to the Corporation posed by such insured
depository institution under such threat of instability.
(2)(A) In order to facilitate a merger or consolidation of
another (!1) insured depository institution described in
subparagraph (B) with another insured depository institution or the
sale of any or all of the assets of such insured depository
institution or the assumption of any or all of such insured
depository institution's liabilities by another insured depository
institution, or the acquisition of the stock of such insured
depository institution, the Corporation is authorized, in its sole
discretion and upon such terms and conditions as the Board of
Directors may prescribe -
(i) to purchase any such assets or assume any such liabilities;
(ii) to make loans or contributions to, or deposits in, or
purchase the securities of, such other insured depository
institution or the company which controls or will acquire control
of such other insured depository institution;
(iii) to guarantee such other insured depository institution or
the company which controls or will acquire control of such other
insured depository institution against loss by reason of such
insured institution's merging or consolidating with or assuming
the liabilities and purchasing the assets of such insured
depository institution or by reason of such company acquiring
control of such insured depository institution; or
(iv) to take any combination of the actions referred to in
subparagraphs (i) through (iii).
(B) For the purpose of subparagraph (A), the insured depository
institution must be an insured depository institution -
(i) which is in default;
(ii) which, in the judgment of the Board of Directors, is in
danger of default; or
(iii) which, when severe financial conditions exist which
threaten the stability of a significant number of insured
depository institutions or of insured depository institutions
possessing significant financial resources, is determined by the
Corporation, in its sole discretion, to require assistance under
subparagraph (A) in order to lessen the risk to the Corporation
posed by such insured depository institution under such threat of
instability.
(C) Any action to which the Corporation is or becomes a party by
acquiring any asset or exercising any other authority set forth in
this section shall be stayed for a period of 60 days at the request
of the Corporation.
(3) The Corporation may provide any person acquiring control of,
merging with, consolidating with or acquiring the assets of an
insured depository institution under subsection (f) or (k) of this
section with such financial assistance as it could provide an
insured institution under this subsection.
(4) Least-cost resolution required. -
(A) In general. - Notwithstanding any other provision of this
chapter, the Corporation may not exercise any authority under
this subsection or subsection (d), (f), (h), (i), or (k) of this
section with respect to any insured depository institution unless
-
(i) the Corporation determines that the exercise of such
authority is necessary to meet the obligation of the
Corporation to provide insurance coverage for the insured
deposits in such institution; and
(ii) the total amount of the expenditures by the Corporation
and obligations incurred by the Corporation (including any
immediate and long-term obligation of the Corporation and any
direct or contingent liability for future payment by the
Corporation) in connection with the exercise of any such
authority with respect to such institution is the least costly
to the deposit insurance fund of all possible methods for
meeting the Corporation's obligation under this section.
(B) Determining least costly approach. - In determining how to
satisfy the Corporation's obligations to an institution's insured
depositors at the least possible cost to the deposit insurance
fund, the Corporation shall comply with the following provisions:
(i) Present-value analysis; documentation required. - The
Corporation shall -
(I) evaluate alternatives on a present-value basis, using a
realistic discount rate;
(II) document that evaluation and the assumptions on which
the evaluation is based, including any assumptions with
regard to interest rates, asset recovery rates, asset holding
costs, and payment of contingent liabilities; and
(III) retain the documentation for not less than 5 years.
(ii) Foregone tax revenues. - Federal tax revenues that the
Government would forego as the result of a proposed
transaction, to the extent reasonably ascertainable, shall be
treated as if they were revenues foregone by the deposit
insurance fund.
(C) Time of determination. -
(i) General rule. - For purposes of this subsection, the
determination of the costs of providing any assistance under
paragraph (1) or (2) or any other provision of this section
with respect to any depository institution shall be made as of
the date on which the Corporation makes the determination to
provide such assistance to the institution under this section.
(ii) Rule for liquidations. - For purposes of this
subsection, the determination of the costs of liquidation of
any depository institution shall be made as of the earliest of
-
(I) the date on which a conservator is appointed for such
institution;
(II) the date on which a receiver is appointed for such
institution; or
(III) the date on which the Corporation makes any
determination to provide any assistance under this section
with respect to such institution.
(D) Liquidation costs. - In determining the cost of liquidating
any depository institution for the purpose of comparing the costs
under subparagraph (A) (with respect to such institution), the
amount of such cost may not exceed the amount which is equal to
the sum of the insured deposits of such institution as of the
earliest of the dates described in subparagraph (C), minus the
present value of the total net amount the Corporation reasonably
expects to receive from the disposition of the assets of such
institution in connection with such liquidation.
(E) Deposit insurance funds available for intended purpose
only. -
(i) In general. - After December 31, 1994, or at such earlier
time as the Corporation determines to be appropriate, the
Corporation may not take any action, directly or indirectly,
with respect to any insured depository institution that would
have the effect of increasing losses to any insurance fund by
protecting -
(I) depositors for more than the insured portion of
deposits (determined without regard to whether such
institution is liquidated); or
(II) creditors other than depositors.
(ii) Deadline for regulations. - The Corporation shall
prescribe regulations to implement clause (i) not later than
January 1, 1994, and the regulations shall take effect not
later than January 1, 1995.
(iii) Purchase and assumption transactions. - No provision of
this subparagraph shall be construed as prohibiting the
Corporation from allowing any person who acquires any assets or
assumes any liabilities of any insured depository institution
for which the Corporation has been appointed conservator or
receiver to acquire uninsured deposit liabilities of such
institution so long as the insurance fund does not incur any
loss with respect to such deposit liabilities in an amount
greater than the loss which would have been incurred with
respect to such liabilities if the institution had been
liquidated.
(F) Discretionary determinations. - Any determination which the
Corporation may make under this paragraph shall be made in the
sole discretion of the Corporation.
(G) Systemic risk. -
(i) Emergency determination by secretary of the treasury. -
Notwithstanding subparagraphs (A) and (E), if, upon the written
recommendation of the Board of Directors (upon a vote of not
less than two-thirds of the members of the Board of Directors)
and the Board of Governors of the Federal Reserve System (upon
a vote of not less than two-thirds of the members of such
Board), the Secretary of the Treasury (in consultation with the
President) determines that -
(I) the Corporation's compliance with subparagraphs (A) and
(E) with respect to an insured depository institution would
have serious adverse effects on economic conditions or
financial stability; and
(II) any action or assistance under this subparagraph would
avoid or mitigate such adverse effects,
the Corporation may take other action or provide assistance
under this section as necessary to avoid or mitigate such
effects.
(ii) Repayment of loss. - The Corporation shall recover the
loss to the appropriate insurance fund arising from any action
taken or assistance provided with respect to an insured
depository institution under clause (i) expeditiously from 1 or
more emergency special assessments on the members of the
insurance fund (of which such institution is a member) equal to
the product of -
(I) an assessment rate established by the Corporation; and
(II) the amount of each member's average total assets
during the semiannual period, minus the sum of the amount of
the member's average total tangible equity and the amount of
the member's average total subordinated debt.
(iii) Documentation required. - The Secretary of the Treasury
shall -
(I) document any determination under clause (i); and
(II) retain the documentation for review under clause (iv).
(iv) GAO review. - The Comptroller General of the United
States shall review and report to the Congress on any
determination under clause (i), including -
(I) the basis for the determination;
(II) the purpose for which any action was taken pursuant to
such clause; and
(III) the likely effect of the determination and such
action on the incentives and conduct of insured depository
institutions and uninsured depositors.
(v) Notice. -
(I) In general. - The Secretary of the Treasury shall
provide written notice of any determination under clause (i)
to the Committee on Banking, Housing, and Urban Affairs of
the Senate and the Committee on Banking, Finance and Urban
Affairs of the House of Representatives.
(II) Description of basis of determination. - The notice
under subclause (I) shall include a description of the basis
for any determination under clause (i).
(H) Rule of construction. - No provision of law shall be
construed as permitting the Corporation to take any action
prohibited by paragraph (4) unless such provision expressly
provides, by direct reference to this paragraph, that this
paragraph shall not apply with respect to such action.
(5) The Corporation may not use its authority under this
subsection to purchase the voting or common stock of an insured
depository institution. Nothing in the preceding sentence shall be
construed to limit the ability of the Corporation to enter into and
enforce covenants and agreements that it determines to be necessary
to protect its financial interest.
(6)(A) During any period in which an insured depository
institution has received assistance under this subsection and such
assistance is still outstanding, such insured depository
institution may defer the payment of any State or local tax which
is determined on the basis of the deposits held by such insured
depository institution or of the interest or dividends paid on such
deposits.
(B) When such insured depository institution no longer has any
outstanding assistance, such insured depository institution shall
pay all taxes which were deferred under subparagraph (A). Such
payments shall be made in accordance with a payment plan
established by the Corporation, after consultation with the
applicable State and local taxing authorities.
(7) The transfer of any assets or liabilities associated with any
trust business of an insured depository institution in default
under subparagraph (2)(A) shall be effective without any State or
Federal approval, assignment, or consent with respect thereto.
(8) Assistance before appointment of conservator or receiver. -
(A) In general. - Subject to the least-cost provisions of
paragraph (4), the Corporation shall consider providing direct
financial assistance under this section for depository
institutions before the appointment of a conservator or receiver
for such institution only under the following circumstances:
(i) Troubled condition criteria. - The Corporation determines
-
(I) grounds for the appointment of a conservator or
receiver exist or likely will exist in the future unless the
depository institution's capital levels are increased; and
(II) it is unlikely that the institution can meet all
currently applicable capital standards without assistance.
(ii) Other criteria. - The depository institution meets the
following criteria:
(I) The appropriate Federal banking agency and the
Corporation have determined that, during such period of time
preceding the date of such determination as the agency or the
Corporation considers to be relevant, the institution's
management has been competent and has complied with
applicable laws, rules, and supervisory directives and
orders.
(II) The institution's management did not engage in any
insider dealing, speculative practice, or other abusive
activity.
(B) Public disclosure. - Any determination under this paragraph
to provide assistance under this section shall be made in writing
and published in the Federal Register.
(9) Any assistance provided under this subsection may be in
subordination to the rights of depositors and other creditors.
(10) In its annual report to the Congress, the Corporation shall
report the total amount it has saved, or estimates it has saved, by
exercising the authority provided in this subsection.
(11) Payments made under this subsection shall be made -
(A) from the Bank Insurance Fund in the case of payments to or
on behalf of a member of such Fund; or
(B) from the Savings Association Insurance Fund or from funds
made available by the Resolution Trust Corporation in the case of
payments to or on behalf of any Savings Association Insurance
Fund member.
(d) Sale of assets to Corporation
(1) In general
Any conservator, receiver, or liquidator appointed for any
insured depository institution in default, including the
Corporation acting in such capacity, shall be entitled to offer
the assets of such depository institutions for sale to the
Corporation or as security for loans from the Corporation.
(2) Proceeds
The proceeds of every sale or loan of assets to the Corporation
shall be utilized for the same purposes and in the same manner as
other funds realized from the liquidation of the assets of such
depository institutions.
(3) Rights and powers of Corporation
(A) In general
With respect to any asset acquired or liability assumed
pursuant to this section, the Corporation shall have all of the
rights, powers, privileges, and authorities of the Corporation
as receiver under sections 1821 and 1825(b) of this title.
(B) Rule of construction
Such rights, powers, privileges, and authorities shall be in
addition to and not in derogation of any rights, powers,
privileges, and authorities otherwise applicable to the
Corporation.
(C) Fiduciary responsibility
In exercising any right, power, privilege, or authority
described in subparagraph (A), the Corporation shall continue
to be subject to the fiduciary duties and obligations of the
Corporation as receiver to claimants against the insured
depository institution in receivership.
(D) Disposition of assets
In exercising any right, power, privilege, or authority
described in subparagraph (A) regarding the sale or disposition
of assets sold to the Corporation pursuant to paragraph (1),
the Corporation shall conduct its operations in a manner which
-
(i) maximizes the net present value return from the sale or
disposition of such assets;
(ii) minimizes the amount of any loss realized in the
resolution of cases;
(iii) ensures adequate competition and fair and consistent
treatment of offerors;
(iv) prohibits discrimination on the basis of race, sex, or
ethnic groups in the solicitation and consideration of
offers; and
(v) maximizes the preservation of the availability and
affordability of residential real property for low- and
moderate-income individuals.
(4) Loans
The Corporation, in its discretion, may make loans on the
security of or may purchase and liquidate or sell any part of the
assets of an insured depository institution which is now or may
hereafter be in default.
(e) Agreements against interests of Corporation
(1) In general
No agreement which tends to diminish or defeat the interest of
the Corporation in any asset acquired by it under this section or
section 1821 of this title, either as security for a loan or by
purchase or as receiver of any insured depository institution,
shall be valid against the Corporation unless such agreement -
(A) is in writing,
(B) was executed by the depository institution and any person
claiming an adverse interest thereunder, including the obligor,
contemporaneously with the acquisition of the asset by the
depository institution,
(C) was approved by the board of directors of the depository
institution or its loan committee, which approval shall be
reflected in the minutes of said board or committee, and
(D) has been, continuously, from the time of its execution,
an official record of the depository institution.
(2) Public deposits
An agreement to provide for the lawful collateralization of
deposits of a Federal, State, or local governmental entity or of
any depositor referred to in section 1821(a)(2) of this title
shall not be deemed to be invalid pursuant to paragraph (1)(B)
solely because such agreement was not executed contemporaneously
with the acquisition of the collateral or with any changes in the
collateral made in accordance with such agreement.
(f) Assisted emergency interstate acquisitions
(1) This subsection shall apply only to an acquisition of an
insured bank or a holding company by an out-of-State bank (!2)
savings association or out-of-State holding company for which the
Corporation provides assistance under subsection (c) of this
section.
(2)(A) Whenever an insured bank with total assets of $500,000,000
or more (as determined from its most recent report of condition) is
in default, the Corporation, as receiver, may, in its discretion
and upon such terms and conditions as the Corporation may
determine, arrange the sale of assets of the bank in default and
the assumption of the liabilities of the bank in default, including
the sale of such assets to and the assumption of such liabilities
by an insured depository institution located in the State where the
bank in default was chartered but established by an out-of-State
bank or holding company. Where otherwise lawfully required, a
transaction under this subsection must be approved by the primary
Federal or State supervisor of all parties thereto.
(B)(i) Before making a determination to take any action under
subparagraph (A), the Corporation shall consult the State bank
supervisor of the State in which the insured bank in default was
chartered.
(ii) The State bank supervisor shall be given a reasonable
opportunity, and in no event less than forty-eight hours, to object
to the use of the provisions of this paragraph. Such notice may be
provided by the Corporation prior to its appointment as receiver,
but in anticipation of an impending appointment.
(iii) If the State supervisor objects during such period, the
Corporation may use the authority of this paragraph only by a vote
of 75 percent of the Board of Directors. The Board of Directors
shall provide to the State supervisor, as soon as practicable, a
written certification of its determination.
(3) Emergency Interstate Acquisitions of Insured Banks in Danger
of Default. -
(A) Acquisition of insured banks in danger of default. - One or
more out-of-State banks or out-of-State holding companies may
acquire and retain all or part of the shares or assets of, or
otherwise acquire and retain -
(i) an insured bank in danger of default which has total
assets of $500,000,000 or more; or
(ii) 2 or more affiliated insured banks in danger of default
which have aggregate total assets of $500,000,000 or more, if
the aggregate total assets of such banks is equal to or greater
than 33 percent of the aggregate total assets of all affiliated
insured banks.
(B) Acquisition of a holding company or other bank affiliate. -
If one or more out-of-State banks or out-of-State holding
companies acquire 1 or more affiliated insured banks under
subparagraph (A) the aggregate total assets of which is equal to
or greater than 33 percent of the aggregate total assets of all
affiliated insured banks, any such out-of-State bank or
out-of-State holding company may also, as part of the same
transaction, acquire and retain the shares or assets of, or
otherwise acquire and retain -
(i) the holding company which controls the affiliated insured
banks so acquired; or
(ii) any other affiliated insured bank.
(C) Request for assistance by corporate board of directors. -
The Corporation may assist an acquisition or merger authorized
under subparagraph (A) only if the board of directors or trustees
of each insured bank in danger of default which is being acquired
has requested in writing that the Corporation assist the
acquisition or merger.
(D) Certain acquisitions authorized after assistance is
provided. - Notwithstanding paragraph (1), if -
(i) at any time after August 10, 1987, the Corporation
provides any assistance under subsection (c) of this section to
an insured bank; and
(ii) at the time such assistance is granted, the insured
bank, the holding company which controls the insured bank (if
any), or any affiliated insured bank is eligible to be acquired
by an out-of-State bank or out-of-State holding company under
this paragraph,
the insured bank, the holding company, and such other affiliated
insured bank shall remain eligible, subject to such terms and
conditions as the Corporation (in the Corporation's discretion)
may impose, to be acquired by an out-of-State bank or
out-of-State holding company under this paragraph as long as any
portion of such assistance remains outstanding.
(E) State bank supervisor approval. - The Corporation may take
no final action in connection with any acquisition under this
paragraph unless the State bank supervisor of the State in which
the bank in danger of default is located approves the
acquisition.
(F) Other requirements not affected. - This paragraph does not
affect any other requirement under Federal or State law for
regulatory approval of an acquisition under this paragraph.
(G) Acquisition may be conditioned on receipt of consideration
for corporation's assistance. - Any acquisition described in
subparagraph (D) may be conditioned on the receipt of such
consideration for the Corporation's assistance as the Board of
Directors deems appropriate.
(4)(A) Acquisitions Not Subject to Certain Other Laws. - Section
1842(d) of this title, any provision of State law, and section
1730a(e)(3) (!3) of this title shall not apply to prohibit any
acquisition under paragraph (2) or (3), except that an out-of-State
bank may make such an acquisition only if such ownership is
otherwise specifically authorized.
(B) Any subsidiary created by operation of this subsection may
retain and operate any existing branch or branches of the
institution merged with or acquired under paragraph (2) or (3), but
otherwise shall be subject to the conditions upon which a national
bank may establish and operate branches in the State in which such
insured institution is located.
(C) No insured institution acquired under this subsection shall
after it is acquired move its principal office or any branch office
which it would be prohibited from moving if the institution were a
national bank.
(D) Subsequent Nonemergency Interstate Acquisitions Subject to
State Law. -
(i) In general. - Any out-of-State bank holding company which
acquires control of an insured bank in any State under paragraph
(2) or (3) may acquire any other insured bank and establish
branches in such State to the same extent as a bank holding
company whose insured bank subsidiaries' operations are
principally conducted in such State may acquire any other insured
bank or establish branches.
(ii) Delayed date of applicability. - Clause (i) shall not
apply with respect to any out-of-State bank holding company
referred to in such clause before the earlier of -
(I) the end of the 2-year period beginning on the date the
acquisition referred to in such clause with respect to such
company is consummated; or
(II) the end of any period established under State law during
which such out-of-State bank holding company may not be treated
as a bank holding company whose insured bank subsidiaries'
operations are principally conducted in such State for purposes
of acquiring other insured banks or establishing bank branches.
(iii) Determination of principally conducted. - For purposes of
this subparagraph, the State in which the operations of a holding
company's insured bank subsidiaries are principally conducted is
the State determined under section 1842(d) of this title with
respect to such holding company.
(E) Certain State Interstate Banking Laws Inapplicable. - Any
holding company which acquires control of any insured bank or
holding company under paragraph (2) or (3) or subparagraph (D) of
this paragraph shall not, by reason of such acquisition, be
required under the law of any State to divest any other insured
bank or be prevented from acquiring any other bank or holding
company.
(5) In determining whether to arrange a sale of assets and
assumption of liabilities or an acquisition or a merger under the
authority of paragraph (2) or (3), the Corporation may solicit such
offers or proposals as are practicable from any prospective
purchasers or merger partners it determines, in its sole
discretion, are both qualified and capable of acquiring the assets
and liabilities of the bank in default or the bank in danger of
default.
(6)(A) If, after receiving offers, the offer presenting the
lowest expense to the Corporation, that is in a form and with
conditions acceptable to the Corporation (hereinafter referred to
as the "lowest acceptable offer"), is from an offeror that is not
an existing in-State bank of the same type as the bank that is in
default or is in danger of default (or, where the bank is an
insured bank other than a mutual savings bank, the lowest
acceptable offer is not from an in-State holding company), the
Corporation shall permit the offeror which made the initial lowest
acceptable offer and each offeror who made an offer the estimated
cost of which to the Corporation was within 15 per centum or
$15,000,000, whichever is less, of the initial lowest acceptable
offer to submit a new offer.
(B) In considering authorizations under this subsection, the
Corporation shall give consideration to the need to minimize the
cost of financial assistance and to the maintenance of specialized
depository institutions. The Corporation shall authorize
transactions under this subsection considering the following
priorities:
(i) First, between depository institutions of the same type
within the same State.
(ii) Second, between depository institutions of the same type -
(I) in different States which by statute specifically
authorize such acquisitions; or
(II) in the absence of such statutes, in different States
which are contiguous.
(iii) Third, between depository institutions of the same type
in different States other than the States described in clause
(ii).
(iv) Fourth, between depository institutions of different types
in the same State.
(v) Fifth, between depository institutions of different types -
(I) in different States which by statute specifically
authorize such acquisitions; or
(II) in the absence of such statutes, in different States
which are contiguous.
(vi) Sixth, between depository institutions of different types
in different States other than the States described in clause
(v).
(C) Minority Bank Priority. - In the case of a
minority-controlled bank, the Corporation shall seek an offer from
other minority-controlled banks before proceeding with the bidding
priorities set forth in subparagraph (B).
(D) In determining the cost of offers and reoffers, the
Corporation's calculations and estimations shall be determinative.
The Corporation may set reasonable time limits on offers and
reoffers.
(7) No sale may be made under the provisions of paragraph (2) or
(3) -
(A) which would result in a monopoly, or which would be in
furtherance of any combination or conspiracy to monopolize or to
attempt to monopolize the business of banking in any part of the
United States;
(B) whose effect in any section of the country may be
substantially to lessen competition, or to tend to create a
monopoly, or which in any other manner would be in restraint of
trade, unless the Corporation finds that the anticompetitive
effects of the proposed transactions 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;
or
(C) if in the opinion of the Corporation the acquisition
threatens the safety and soundness of the acquirer or does not
result in the future viability of the resulting depository
institution.
(8) As used in this subsection -
(A) the term "in-State depository institution or in-State
holding company" means an existing insured depository institution
currently operating in the State in which the bank in default or
the bank in danger of default is chartered or a company that is
operating an insured depository institution subsidiary in the
State in which the bank in default or the bank in danger of
default is chartered;
(B) the term "acquire" means to acquire, directly or
indirectly, ownership or control through -
(i) an acquisition of shares;
(ii) an acquisition of assets or assumption of liabilities;
(iii) a merger or consolidation; or
(iv) any similar transaction;
(C) the term "affiliated insured bank" means -
(i) when used in connection with a reference to a holding
company, an insured bank which is a subsidiary of such holding
company; and
(ii) when used in connection with a reference to 2 or more
insured banks, insured banks which are subsidiaries of the same
holding company; and
(D) the term "subsidiary" has the meaning given to such term in
section 1841(d) of this title.
(9) No Assistance Authorized for Certain Subsidiaries of Holding
Companies. -
(A) In general. - The Corporation shall not provide any
assistance to a subsidiary, other than a subsidiary that is an
insured depository institution, of a holding company in
connection with any acquisition under this subsection.
(B) Intermediate holding company permitted. - This paragraph
does not prohibit an intermediate holding company or an affiliate
of an insured depository institution from being a conduit for
assistance ultimately intended for an insured bank.
(10) Annual Report. -
(A) Required. - In its annual report to Congress the
Corporation shall include a report on the acquisitions under this
subsection during the preceding year.
(B) Contents. - The report required under subparagraph (A)
shall contain the following information:
(i) The number of acquisitions under this subsection.
(ii) A brief description of each such acquisition and the
circumstances under which such acquisition occurred.
(11) Determination of Total Assets. - For purposes of this
subsection, the total assets of any insured bank shall be
determined on the basis of the most recent report of condition of
such bank which is available at the time of such determination.
(12) Acquisition of minority bank by minority bank holding
company without regard to asset size. -
(A) In general. - For the purpose of ensuring continued
minority control of a minority-controlled bank, paragraphs (2)
and (3) shall apply with respect to the acquisition of a
minority-controlled bank by an out-of-State minority-controlled
depository institution or depository institution holding company
without regard to the fact that the total assets of such
minority-controlled bank are less than $500,000,000.
(B) Definitions. - For purposes of this paragraph:
(i) Minority bank. - The term "minority bank" means any
depository institution described in clause (i), (ii), or (iii)
of section 461(b)(1)(A) of this title -
(I) more than 50 percent of the ownership or control of
which is held by one or more minority individuals; and
(II) more than 50 percent of the net profit or loss of
which accrues to minority individuals.
(ii) Minority. - The term "minority" means any Black
American, Native American, Hispanic American, or Asian
American.
(g) Payment of interest on stock subscriptions
Prior to July 1, 1951, the Corporation shall pay out of its
capital account to the Secretary of the Treasury an amount equal to
2 per centum simple interest per annum on amounts advanced to the
Corporation on stock subscriptions by the Secretary of the Treasury
and the Federal Reserve banks, from the time of such advances until
the amounts thereof were repaid. The amount payable hereunder shall
be paid in two equal installments, the first installment to be paid
prior to December 31, 1950.
(h) Reopening or aversion of closing of insured branch of foreign
bank
The powers conferred on the Board of Directors and the
Corporation by this section to take action to reopen an insured
depository institution in default or to avert the default of an
insured depository institution may be used with respect to an
insured branch of a foreign bank if, in the judgment of the Board
of Directors, the public interest in avoiding the default of such
branch substantially outweighs any additional risk of loss to the
Bank Insurance Fund which the exercise of such powers would entail.
(i) Repealed. Pub. L. 97-320, title II, Sec. 206, Oct. 15, 1982, 96
Stat. 1496
(j) Loan loss amortization for certain banks
(1) Eligibility
The appropriate Federal banking agency shall permit an
agricultural bank to take the actions referred to in paragraph
(2) if it finds that -
(A) there is no evidence that fraud or criminal abuse on the
part of the bank led to the losses referred to in paragraph
(2); and
(B) the agricultural bank has a plan to restore its capital,
not later than the close of the amortization period established
under paragraph (2), to a level prescribed by the appropriate
Federal banking agency.
(2) Seven-year loss amortization
(A) Any loss on any qualified agricultural loan that an
agricultural bank would otherwise be required to show on its
annual financial statement for any year between December 31,
1983, and January 1, 1992, may be amortized on its financial
statements over a period of not to exceed 7 years, as provided in
regulations issued by the appropriate Federal banking agency.
(B) An agricultural bank may reappraise any real estate or
other property, real or personal, that it acquired coincident to
the making of a qualified agricultural loan and that it owned on
January 1, 1983, and any such additional property that it
acquires prior to January 1, 1992. Any loss that such bank would
otherwise be required to show on its annual financial statements
as the result of any such reappraisal may be amortized on its
financial statements over a period of not to exceed 7 years, as
provided in regulations issued by the appropriate Federal banking
agency.
(3) Regulations
Not later than 90 days after August 10, 1987, the appropriate
Federal banking agency shall issue regulations implementing this
subsection with respect to banks that it supervises, including
regulations implementing the capital restoration requirement of
paragraph (1)(B).
(4) Definitions
As used in this subsection -
(A) the term "agricultural bank" means a bank -
(i) the deposits of which are insured by the Federal
Deposit Insurance Corporation;
(ii) which is located in an area the economy of which is
dependent on agriculture;
(iii) which has assets of $100,000,000 or less; and
(iv) which has -
(I) at least 25 percent of its total loans in qualified
agricultural loans; or
(II) fewer than 25 percent of its total loans in
qualified agricultural loans but which the appropriate
Federal banking agency or State bank commissioner
recommends to the Corporation for eligibility under this
section, or which the Corporation, on its motion, deems
eligible; and
(B) the term "qualified agricultural loan" means a loan made
to finance the production of agricultural products or livestock
in the United States, a loan secured by farmland or farm
machinery, or such other category of loans as the appropriate
Federal banking agency may deem eligible.
(5) Maintenance of portfolio
As a condition of eligibility under this subsection, the
agricultural bank must agree to maintain in its loan portfolio a
percentage of agricultural loans which is not lower than the
percentage of such loans in its loan portfolio on January 1,
1986.
(k) Emergency acquisitions
(1) In general
(A) Acquisitions authorized
(i) Transactions described
Notwithstanding any provision of State law, upon
determining that severe financial conditions threaten the
stability of a significant number of savings associations, or
of savings associations possessing significant financial
resources, the Corporation, in its discretion and if it
determines such authorization would lessen the risk to the
Corporation, may authorize -
(I) a savings association that is eligible for assistance
pursuant to subsection (c) of this section to merge or
consolidate with, or to transfer its assets and liabilities
to, any other savings association or any insured bank,
(II) any other savings association to acquire control of
such savings association, or
(III) any company to acquire control of such savings
association or to acquire the assets or assume the
liabilities thereof.
The Corporation may not authorize any transaction under this
subsection unless the Corporation determines that the
authorization will not present a substantial risk to the
safety or soundness of the savings association to be acquired
or any acquiring entity.
(ii) Terms of transactions
Mergers, consolidations, transfers, and acquisitions under
this subsection shall be on such terms as the Corporation
shall provide.
(iii) Approval by appropriate agency
Where otherwise required by law, transactions under this
subsection must be approved by the appropriate Federal
banking agency of every party thereto.
(iv) Acquisitions by savings associations
Any Federal savings association that acquires another
savings association pursuant to clause (i) may, with the
concurrence of the Director of the Office of Thrift
Supervision, hold that savings association as a subsidiary
notwithstanding the percentage limitations of section
1464(c)(4)(B) of this title.
(v) Dual service
Dual service by a management official that would otherwise
be prohibited under the Depository Institution Management
Interlocks Act [12 U.S.C. 3201 et seq.] may, with the
approval of the Corporation, continue for up to 10 years.
(vi) Continued applicability of certain State restrictions
Nothing in this subsection overrides or supersedes State
laws restricting or limiting the activities of a savings
association on behalf of another entity.
(B) Consultation with State official
(i) Consultation required
Before making a determination to take any action under
subparagraph (A), the Corporation shall consult the State
official having jurisdiction of the acquired institution.
(ii) Period for State response
The official shall be given a reasonable opportunity, and
in no event less than 48 hours, to object to the use of the
provisions of this paragraph. Such notice may be provided by
the Corporation prior to its appointment as receiver, but in
anticipation of an impending appointment.
(iii) Approval over objection of State official
If the official objects during such period, the Corporation
may use the authority of this paragraph only by a vote of 75
percent or more of the voting members of the Board of
Directors. The Corporation shall provide to the official, as
soon as practicable, a written certification of its
determination.
(2) Solicitation of offers
(A) In general
In considering authorizations under this subsection, the
Corporation may solicit such offers or proposals as are
practicable from any prospective purchasers or merger partners
it determines, in its sole discretion, are both qualified and
capable of acquiring the assets and liabilities of the savings
association.
(B) Minority-controlled institutions
In the case of a minority-controlled depository institution,
the Corporation shall seek an offer from other
minority-controlled depository institutions before seeking an
offer from other persons or entities.
(3) Determination of costs
In determining the cost of offers under this subsection, the
Corporation's calculations and estimations shall be
determinative. The Corporation may set reasonable time limits on
offers.
(4) Branching provisions
(A) In general
If a merger, consolidation, transfer, or acquisition under
this subsection involves a savings association eligible for
assistance and a bank or bank holding company, a savings
association may retain and operate any existing branch or
branches or any other existing facilities. If the savings
association continues to exist as a separate entity, it may
establish and operate new branches to the same extent as any
savings association that is not affiliated with a bank holding
company and the home office of which is located in the same
State.
(B) Restrictions
(i) In general
Notwithstanding subparagraph (A), if -
(I) a savings association described in such subparagraph
does not have its home office in the State of the bank
holding company bank subsidiary, and
(II) such association does not qualify as a domestic
building and loan association under section 7701(a)(19) of
title 26, or does not meet the asset composition test
imposed by subparagraph (C) of that section on institutions
seeking so to qualify,
such savings association shall be subject to the conditions
upon which a bank may retain, operate, and establish branches
in the State in which the Savings Association Insurance Fund
member is located.
(ii) Transition period
The Corporation, for good cause shown, may allow a savings
association up to 2 years to comply with the requirements of
clause (i).
(5) Assistance before appointment of conservator or receiver
(A) Assistance proposals
The Corporation shall consider proposals by Savings
Association Insurance Fund members for assistance pursuant to
subsection (c) of this section before grounds exist for
appointment of a conservator or receiver for such member under
the following circumstances:
(i) Troubled condition criteria
The Corporation determines -
(I) that grounds for appointment of a conservator or
receiver exist or likely will exist in the future unless
the member's tangible capital is increased;
(II) that it is unlikely that the member can achieve
positive tangible capital without assistance; and
(III) that providing assistance pursuant to the member's
proposal would be likely to lessen the risk to the
Corporation.
(ii) Other criteria
The member meets the following criteria:
(I) Before August 9, 1989, the member was solvent under
applicable regulatory accounting principles but had
negative tangible capital.
(II) The member's negative tangible capital position is
substantially attributable to its participation in
acquisition and merger transactions that were instituted by
the Federal Home Loan Bank Board or the Federal Savings and
Loan Insurance Corporation for supervisory reasons.
(III) The member is a qualified thrift lender (as defined
in section 1467a(m) of this title) or would be a qualified
thrift lender if commercial real estate owned and
nonperforming commercial loans acquired in acquisition and
merger transactions that were instituted by the Federal
Home Loan Bank Board or the Federal Savings and Loan
Insurance Corporation for supervisory reasons were excluded
from the member's total assets.
(IV) The appropriate Federal banking agency has
determined that the member's management is competent and
has complied with applicable laws, rules, and supervisory
directives and orders.
(V) The member's management did not engage in insider
dealing or speculative practices or other activities that
jeopardized the member's safety and soundness or
contributed to its impaired capital position.
(VI) The member's offices are located in an economically
depressed region.
(B) Corporation consideration of assistance proposal
If a member meets the requirements of clauses (i) and (ii) of
subparagraph (A), the Corporation shall consider providing
direct financial assistance.
(C) "Economically depressed region" defined
For purposes of this paragraph, the term "economically
depressed region" means any geographical region which the
Corporation determines by regulation to be a region within
which real estate values have suffered serious decline due to
severe economic conditions, such as a decline in energy or
agricultural values or prices.
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