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U.S. Code as of:
01/19/04
Section 3907. Capital adequacy
(a)(1) Each appropriate Federal banking agency shall cause
banking institutions to achieve and maintain adequate capital by
establishing minimum levels of capital for such banking
institutions and by using such other methods as the appropriate
Federal banking agency deems appropriate.
(2) Each appropriate Federal banking agency shall have the
authority to establish such minimum level of capital for a banking
institution as the appropriate Federal banking agency, in its
discretion, deems to be necessary or appropriate in light of the
particular circumstances of the banking institution.
(b)(1) Failure of a banking institution to maintain capital at or
above its minimum level as established pursuant to subsection (a)
of this section may be deemed by the appropriate Federal banking
agency, in its discretion, to constitute an unsafe and unsound
practice within the meaning of section 1818 of this title.
(2)(A) In addition to, or in lieu of, any other action authorized
by law, including paragraph (1), the appropriate Federal banking
agency may issue a directive to a banking institution that fails to
maintain captial (!1) at or above its required level as established
pursuant to subsection (a) of this section.
(B)(i) Such directive may require the banking institution to
submit and adhere to a plan acceptable to the appropriate Federal
banking agency describing the means and timing by which the banking
institution shall achieve its required capital level.
(ii) Any such directive issued pursuant to this paragraph,
including plans submitted pursuant thereto, shall be enforceable
under the provisions of section 1818(i) of this title to the same
extent as an effective and outstanding order issued pursuant to
section 1818(b) of this title which has become final.
(3)(A) Each appropriate Federal banking agency may consider such
banking institution's progress in adhering to any plan required
under this subsection whenever such banking institution, or an
affiliate thereof, or the holding company which controls such
banking institution, seeks the requisite approval of such
appropriate Federal banking agency for any proposal which would
divert earnings, diminish capital, or otherwise impede such banking
institution's progress in achieving its minimum capital level.
(B) Such appropriate Federal banking agency may deny such
approval where it determines that such proposal would adversely
affect the ability of the banking institution to comply with such
plan.
(C) The Chairman of the Board of Governors of the Federal Reserve
System and the Secretary of the Treasury shall encourage
governments, central banks, and regulatory authorities of other
major banking countries to work toward maintaining and, where
appropriate, strengthening the capital bases of banking
institutions involved in international lending.
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