12 USC 1817 - Assessments

U.S Code last checked for updates: Nov 22, 2024

§ 1817.

Assessments

(a)

Reports of condition; access to reports

(1)

Each insured State nonmember bank and each foreign bank having an insured branch which is not a Federal branch shall make to the Corporation reports of condition which shall be in such form and shall contain such information as the Board of Directors may require. Such reports shall be made to the Corporation on the dates selected as provided in paragraph (3) of this subsection and the deposit liabilities shall be reported therein in accordance with and pursuant to paragraphs (4) and (5) of this subsection. The Board of Directors may call for additional reports of condition on dates to be fixed by it and may call for such other reports as the Board may from time to time require. Any such bank which (A) maintains procedures reasonably adapted to avoid any inadvertent error and, unintentionally and as a result of such an error, fails to make or publish any report required under this paragraph, within the period of time specified by the Corporation, or 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. Such bank shall have the burden of proving that an error was inadvertent and that a report was inadvertently transmitted or published late. Any such bank which fails to make or publish any report required under this paragraph, within the period of time specified by the Corporation, or submits or publishes any false or misleading report or information, in a manner not described in the 2nd preceding sentence 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. Notwithstanding the preceding sentence, if any such bank knowingly or with reckless disregard for the accuracy of any information or report described in such sentence submits or publishes any false or misleading report or information, the Corporation may assess a penalty of not more than $1,000,000 or 1 percent of total assets of such bank, whichever is less, per day for each day during which such failure continues or such false or misleading information is not corrected. Any penalty imposed under any of the 4 preceding sentences shall be assessed and collected by the Corporation in the manner provided in subparagraphs (E), (F), (G), and (I) of section 1818(i)(2) of this title (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 section. Any such bank against which any penalty is assessed under this subsection shall be afforded an agency hearing if such bank submits a request for such hearing within 20 days after the issuance of the notice of assessment. Section 1818(h) of this title shall apply to any proceeding under this paragraph.

(2)

(A)

The Corporation and, with respect to any State depository institution, any appropriate State bank supervisor for such institution, shall have access to reports of examination made by, and reports of condition made to, the Comptroller of the Currency, the Federal Housing Finance Agency, any Federal home loan bank, or any Federal Reserve bank and to all revisions of reports of condition made to any of them, and they shall promptly advise the Corporation of any revisions or changes in respect to deposit liabilities made or required to be made in any report of condition. The Corporation may accept any report made by or to any commission, board, or authority having supervision of a depository institution, and may furnish to the Comptroller of the Currency, to the Federal Housing Finance Agency, to any Federal home loan bank, to any Federal Reserve bank, and to any such commission, board, or authority, reports of examinations made on behalf of, and reports of condition made to, the Corporatio

(B)

Additional reports.—

The Board of Directors may from time to time require any insured depository institution to file such additional reports as the Corporation, after consultation with the Comptroller of the Currency and the Board of Governors of the Federal Reserve System, as appropriate, may deem advisable for insurance purposes.

(C)

Data sharing with other agencies and persons.—

In addition to reports of examination, reports of condition, and other reports required to be regularly provided to the Corporation (with respect to all insured depository institutions, including a depository institution for which the Corporation has been appointed conservator or receiver) or an appropriate State bank supervisor (with respect to a State depository institution) under subparagraph (A) or (B), a Federal banking agency may, in the discretion of the agency, furnish any report of examination or other confidential supervisory information concerning any depository institution or other entity examined by such agency under authority of any Federal law, to—

(i)

any other Federal or State agency or authority with supervisory or regulatory authority over the depository institution or other entity;

(ii)

any officer, director, or receiver of such depository institution or entity; and

(iii)

any other person that the Federal banking agency determines to be appropriate.

(3)

Each insured depository institution shall make to the appropriate Federal banking agency 4 reports of condition annually upon dates which shall be selected by the Chairman of the Board of Directors, the Comptroller of the Currency, and the Chairman of the Board of Governors of the Federal Reserve System. The dates selected shall be the same for all insured depository institutions, except that when any of said reporting dates is a nonbusiness day for any depository institution, the preceding business day shall be its reporting date. Such reports of condition shall be the basis for the certified statements to be filed pursuant to subsection (c). The deposit liabilities shall be reported in said reports of conditions in accordance with and pursuant to paragraphs (4) and (5) of this subsection, and such other information shall be reported therein as may be required by the respective agencies. Each said report of condition shall contain a declaration by the president, a vice president, the cashier or the treasurer, or by any other officer designated by the board of directors or trustees of the reporting depository institution to make such declaration, that the report is true and correct to the best of his knowledge and belief. The correctness of said report of condition shall be attested by the signatures of at least two directors or trustees of the reporting depository institution other than the officer making such declaration, with a declaration that the report has been examined by them and to the best of their knowledge and belief is true and correct. At the time of making said reports of condition each insured depository institution shall furnish to the Corporation a copy thereof containing such signed declaration and attestations. Nothing herein shall preclude any of the foregoing agencies from requiring the banks or savings associations under its jurisdiction to make additional reports of condition at any time.

(4)

In the reports of condition required to be made by paragraph (3) of this subsection, each insured depository institution shall report the total amount of the liability of the depository institution for deposits in the main office and in any branch located in any State of the United States, the District of Columbia, any Territory of the United States, Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, or the Virgin Islands, according to the definition of the term “deposit” in and pursuant to subsection (l) of section 1813 of this title without any deduction for indebtedness of depositors or creditors or any deduction for cash items in the process of collection drawn on others than the reporting depository institution: Provided, That the depository institution in reporting such deposits may (i) subtract from the deposit balance due to any depository institution the deposit balance due from the same depository institution (other than trust funds deposited by either depository institution) and any cash items in the process of collection due from or due to such depository institutions shall be included in determining such net balance, except that balances of time deposits of any depository institution and any balances standing to the credit of private depository institutions, of depository institutions in foreign countries, of foreign branches of other American depository institutions, and of American branches of foreign banks shall be reported gross without any such subtraction, and (ii) exclude any deposits received in any office of the depository institution for deposit in any other office of the depository institution: And provided further, That outstanding drafts (including advices and authorizations to charge depository institution’s balance in another depository institution) drawn in the regular course of business by the reporting depository institution on depository institutions need not be reported as deposit liabilities. The amount of trust funds held in the depository institution’s own trust department, which the reporting depository institution keeps segregated and apart from its general assets and does not use in the conduct of its business, shall not be included in the total deposits in such reports, but shall be separately stated in such reports. Deposits which are accumulated for the payment of personal loans and are assigned or pledged to assure payment of loans at maturity shall not be included in the total deposits in such reports, but shall be deducted from the loans for which such deposits are assigned or pledged to assure repayment.

(5)

The deposits to be reported on such reports of condition shall be segregated between (i) time and savings deposits and (ii) demand deposits. For this purpose, the time and savings deposits shall consist of time certificates of deposit, time deposits-open account, and savings deposits; and demand deposits shall consist of all deposits other than time and savings deposits.

(6)

Lifeline account deposits.—

In the reports of condition required to be reported under this subsection, the deposits in lifeline accounts (as defined in section 1834(a)(3)(D) of this title) shall be reported separately.

(7)

The Board of Directors, after consultation with the Comptroller of the Currency and the Board of Governors of the Federal Reserve System, may by regulation define the terms “cash items” and “process of collection”, and shall classify deposits as “time”, “savings”, and “demand” deposits, for the purposes of this section.

(8)

In respect of any report required or authorized to be supplied or published pursuant to this subsection or any other provision of law, the Board of Directors or the Comptroller of the Currency, as the case may be, may differentiate between domestic banks and foreign banks to such extent as, in their judgment, may be reasonably required to avoid hardship and can be done without substantial compromise of insurance risk or supervisory and regulatory effectiveness.

(9)

Data collections.—

In addition to or in connection with any other report required under this subsection, the Corporation shall take such action as may be necessary to ensure that—

(A)

each insured depository institution maintains; and

(B)

the Corporation receives on a regular basis from such institution,

information on the total amount of all insured deposits, preferred deposits, and uninsured deposits at the institution. In prescribing reporting and other requirements for the collection of actual and accurate information pursuant to this paragraph, the Corporation shall minimize the regulatory burden imposed upon insured depository institutions that are well capitalized (as defined in section 1831o of this title) while taking into account the benefit of the information to the Corporation, including the use of the information to enable the Corporation to more accurately determine the total amount of insured deposits in each insured depository institution for purposes of compliance with this chapter.

(10)

A Federal banking agency may not, by regulation or otherwise, designate, or require an insured institution or an affiliate to designate, a corporation as highly leveraged or a transaction with a corporation as a highly leveraged transaction solely because such corporation is or has been a debtor or bankrupt under title 11, if, after confirmation of a plan of reorganization, such corporation would not otherwise be highly leveraged.

(11)

Streamlining reports of condition.—

(A)

Review of information and schedules.—

Before the end of the 1-year period beginning on October 13, 2006, and before the end of each 5-year period thereafter, each Federal banking agency shall, in conjunction with the other relevant Federal banking agencies, review the information and schedules that are required to be filed by an insured depository institution in a report of condition required under paragraph (3).

(B)

Reduction or elimination of information found to be unnecessary.—

After completing the review required by subparagraph (A), a Federal banking agency, in conjunction with the other relevant Federal banking agencies, shall reduce or eliminate any requirement to file information or schedules under paragraph (3) (other than information or schedules that are otherwise required by law) if the agency determines that the continued collection of such information or schedules is no longer necessary or appropriate.

(12)

Short form reporting.—

(A)

In general.—

The appropriate Federal banking agencies shall issue regulations that allow for a reduced reporting requirement for a covered depository institution when the institution makes the first and third report of condition for a year, as required under paragraph (3).

(B)

Definition.—

In this paragraph, the term “covered depository institution” means an insured depository institution that—

(i)

has less than $5,000,000,000 in total consolidated assets; and

(ii)

satisfies such other criteria as the appropriate Federal banking agencies determine appropriate.

(b)

Assessments

(1)

Risk-based assessment system

(A)

Risk-based assessment system required

(B)

Private reinsurance authorized

In carrying out this paragraph, the Corporation may—

(i)

obtain private reinsurance covering not more than 10 percent of any loss the Corporation incurs with respect to an insured depository institution; and

(ii)

base that institution’s assessment (in whole or in part) on the cost of the reinsurance.

(C)

“Risk-based assessment system” defined

For purposes of this paragraph, the term “risk-based assessment system” means a system for calculating a depository institution’s assessment based on—

(i)

the probability that the Deposit Insurance Fund will incur a loss with respect to the institution, taking into consideration the risks attributable to—

(I)

different categories and concentrations of assets;

(II)

different categories and concentrations of liabilities, both insured and uninsured, contingent and noncontingent; and

(III)

any other factors the Corporation determines are relevant to assessing such probability;

(ii)

the likely amount of any such loss; and

(iii)

the revenue needs of the Deposit Insurance Fund.

(D)

Separate assessment systems

(E)

Information concerning risk of loss and economic conditions

(i)

Sources of information

(ii)

Consultation with Federal banking agencies

(I)

In general

(II)

Treatment on aggregate basis

(iii)

Rule of construction

(F)

Modifications to the risk-based assessment system allowed only after notice and comment

(2)

Setting assessments

(A)

In general

(B)

Factors to be considered

In setting assessments under subparagraph (A), the Board of Directors shall consider the following factors:

(i)

The estimated operating expenses of the Deposit Insurance Fund.

(ii)

The estimated case resolution expenses and income of the Deposit Insurance Fund.

(iii)

The projected effects of the payment of assessments on the capital and earnings of insured depository institutions.

(iv)

The risk factors and other factors taken into account pursuant to paragraph (1) under the risk-based assessment system, including the requirement under such paragraph to maintain a risk-based system.

(v)

Any other factors the Board of Directors may determine to be appropriate.

(D)

 So in original. Par. (2) does not contain a subpar. (C).

Notice of assessments

(E)

Bank Enterprise Act requirement

(3)

Designated reserve ratio

(A)

Establishment

(i)

In general

(ii)

Rulemaking requirement

(B)

Minimum reserve ratio

(C)

Factors

In designating a reserve ratio for any year, the Board of Directors shall—

(i)

take into account the risk of losses to the Deposit Insurance Fund in such year and future years, including historic experience and potential and estimated losses from insured depository institutions;

(ii)

take into account economic conditions generally affecting insured depository institutions so as to allow the designated reserve ratio to increase during more favorable economic conditions and to decrease during less favorable economic conditions, notwithstanding the increased risks of loss that may exist during such less favorable conditions, as determined to be appropriate by the Board of Directors;

(iii)

seek to prevent sharp swings in the assessment rates for insured depository institutions; and

(iv)

take into account such other factors as the Board of Directors may determine to be appropriate, consistent with the requirements of this subparagraph.

(D)

Publication of proposed change in ratio

(E)

DIF restoration plans

(i)

In general

Whenever—

(I)

the Corporation projects that the reserve ratio of the Deposit Insurance Fund will, within 6 months of such determination, fall below the minimum amount specified in subparagraph (B)(ii) for the designated reserve ratio; or

(II)

the reserve ratio of the Deposit Insurance Fund actually falls below the minimum amount specified in subparagraph (B)(ii) for the designated reserve ratio without any determination under subclause (I) having been made,

the Corporation shall establish and implement a Deposit Insurance Fund restoration plan within 90 days that meets the requirements of clause (ii) and such other conditions as the Corporation determines to be appropriate.

(ii)

Requirements of restoration plan

(iii)

Restriction on assessment credits

(iv)

Limitation on restriction

Notwithstanding clause (iii), while any restoration plan under this subparagraph is in effect, the Corporation shall apply credits provided to an insured depository institution under subsection (e)(3) against any assessment imposed on the institution for any assessment period in an amount equal to the lesser of—

(I)

the amount of the assessment; or

(II)

the amount equal to 3 basis points of the institution’s assessment base.

(v)

Transparency

(4)

Depository institution required to maintain assessment-related records

Each insured depository institution shall maintain all records that the Corporation may require for verifying the correctness of any assessment on the insured depository institution under this subsection until the later of—

(A)

the end of the 3-year period beginning on the due date of the assessment; or

(B)

in the case of a dispute between the insured depository institution and the Corporation with respect to such assessment, the date of a final determination of any such dispute.

(5)

Emergency special assessments

In addition to the other assessments imposed on insured depository institutions under this subsection, the Corporation may impose 1 or more special assessments on insured depository institutions in an amount determined by the Corporation if the amount of any such assessment is necessary—

(A)

to provide sufficient assessment income to repay amounts borrowed from the Secretary of the Treasury under section 1824(a) of this title in accordance with the repayment schedule in effect under section 1824(c) of this title during the period with respect to which such assessment is imposed;

(B)

to provide sufficient assessment income to repay obligations issued to and other amounts borrowed from insured depository institutions under section 1824(d) of this title; or

(C)

for any other purpose that the Corporation may deem necessary.

(6)

Community enterprise credits

(c)

Certified statements; payments

(1)

Certified statements required

(A)

In general

(B)

Form of certification

The certified statement required under subparagraph (A) shall—

(i)

be in such form and set forth such supporting information as the Board of Directors shall prescribe; and

(ii)

be certified by the president of the depository institution or any other officer designated by its board of directors or trustees that to the best of his or her knowledge and belief, the statement is true, correct and complete, and in accordance with this chapter and regulations issued hereunder.

(2)

Payments required

(A)

In general

(B)

Form of payment

(3)

Newly insured institutions

(4)

Penalty for failure to make accurate certified statement

(A)

First tier

Any insured depository institution which—

(i)

maintains procedures reasonably adapted to avoid any inadvertent error and, unintentionally and as a result of such an error, fails to submit the certified statement under paragraph (1) within the period of time required under paragraph (1) or submits a false or misleading certified statement; or

(ii)

submits the statement at a time which is minimally after the time required in such paragraph,

shall be subject to a penalty of not more than $2,000 for each day during which such failure continues or such false and misleading information is not corrected. The institution shall have the burden of proving that an error was inadvertent or that a statement was inadvertently submitted late.

(B)

Second tier

(C)

Third tier

(D)

Assessment procedure

(E)

Hearing

(d)

Corporation exempt from apportionment

(e)

Refunds, dividends, and credits

(1)

Refunds of overpayments

In the case of any payment of an assessment by an insured depository institution in excess of the amount due to the Corporation, the Corporation may—

(A)

refund the amount of the excess payment to the insured depository institution; or

(B)

credit such excess amount toward the payment of subsequent assessments until such credit is exhausted.

(2)

Dividends from excess amounts in Deposit Insurance Fund

(A)

Reserve ratio in excess of 1.5 percent of estimated insured deposits

(B)

Limitation

(C)

Notice and opportunity for comment

(3)

One-time credit based on total assessment base at year-end 1996

(A)

In general

(B)

Credit limit

(C)

Eligible insured depository institution defined

For purposes of this paragraph, the term “eligible insured depository institution” means any insured depository institution that—

(i)

was in existence on December 31, 1996, and paid a deposit insurance assessment prior to that date; or

(ii)

is a successor to any insured depository institution described in clause (i).

(D)

Application of credits

(i)

In general

(ii)

Temporary restriction on use of credits

(iii)

Regulations

(E)

Limitation on amount of credit for certain depository institutions

(F)

Successor defined

(4)

Administrative review

(A)

In general

(B)

Administrative review

(f)

Action against depository institutions failing to file certified statements

(g)

Assessment actions

(1)

In general

(2)

Statute of limitations

The following provisions shall apply to actions relating to assessments, notwithstanding any other provision in Federal law, or the law of any State:

(A)

Any action by an insured depository institution to recover from the Corporation the overpaid amount of any assessment shall be brought within 3 years after the date the assessment payment was due, subject to the exception in subparagraph (E).

(B)

Any action by the Corporation to recover from an insured depository institution the underpaid amount of any assessment shall be brought within 3 years after the date the assessment payment was due, subject to the exceptions in subparagraphs (C) and (E).

(C)

If an insured depository institution has made a false or fraudulent statement with intent to evade any or all of its assessment, the Corporation shall have until 3 years after the date of discovery of the false or fraudulent statement in which to bring an action to recover the underpaid amount.

(D)

Except as provided in subparagraph (C), assessment deposit information contained in records no longer required to be maintained pursuant to subsection (b)(4) shall be considered conclusive and not subject to change.

(E)

Any action for the underpaid or overpaid amount of any assessment that became due before

(h)

Forfeiture of rights for failure to comply with law

(i)

Insurance of trust funds

(1)

In general

(2)

Interbank deposits

(3)

Bank deposit financial assistance program

(4)

Regulations

(j)

Change in control of insured depository institutions

(1)

No person, acting directly or indirectly or through or in concert with one or more other persons, shall acquire control of any insured depository institution through a purchase, assignment, transfer, pledge, or other disposition of voting stock of such insured depository institution unless the appropriate Federal banking agency has been given sixty days’ prior written notice of such proposed acquisition and within that time period the agency has not issued a notice disapproving the proposed acquisition or, in the discretion of the agency, extending for an additional 30 days the period during which such a disapproval may issue. The period for disapproval under the preceding sentence may be extended not to exceed 2 additional times for not more than 45 days each time if—

(A)

the agency determines that any acquiring party has not furnished all the information required under paragraph (6);

(B)

in the agency’s judgment, any material information submitted is substantially inaccurate;

(C)

the agency has been unable to complete the investigation of an acquiring party under paragraph (2)(B) because of any delay caused by, or the inadequate cooperation of, such acquiring party; or

(D)

the agency determines that additional time is needed—

(i)

to investigate and determine that no acquiring party has a record of failing to comply with the requirements of subchapter II of chapter 53 of title 31; or

(ii)

to analyze the safety and soundness of any plans or proposals described in paragraph (6)(E) or the future prospects of the institution.

An acquisition may be made prior to expiration of the disapproval period if the agency issues written notice of its intent not to disapprove the action.

(2)

(A)

Notice to State Agency.—

Upon receiving any notice under this subsection, the appropriate Federal banking agency shall forward a copy thereof to the appropriate State depository institution supervisory agency if the depository institution the voting shares of which are sought to be acquired is a State depository institution, and shall allow thirty days within which the views and recommendations of such State depository institution supervisory agency may be submitted. The appropriate Federal banking agency shall give due consideration to the views and recommendations of such State agency in determining whether to disapprove any proposed acquisition. Notwithstanding the provisions of this paragraph, if the appropriate Federal banking agency determines that it must act immediately upon any notice of a proposed acquisition in order to prevent the probable default of the depository institution involved in the proposed acquisition, such Federal banking agency may dispense with the requirements of this paragraph or, if a copy of the notice is forwarded to the State depository institution supervisory agency, such Federal banking agency may request that the views and recommendations of such State depository institution supervisory agency be submitted immediately in any form or by any means acceptable to such Federal banking agency.

(B)

Investigation of Principals Required.—

Upon receiving any notice under this subsection, the appropriate Federal banking agency shall—

(i)

conduct an investigation of the competence, experience, integrity, and financial ability of each person named in a notice of a proposed acquisition as a person by whom or for whom such acquisition is to be made; and

(ii)

make an independent determination of the accuracy and completeness of any information described in paragraph (6) with respect to such person.

(C)

Report.—

The appropriate Federal banking agency shall prepare a written report of any investigation under subparagraph (B) which shall contain, at a minimum, a summary of the results of such investigation. The agency shall retain such written report as a record of the agency.

(D)

Public Comment.—

Upon receiving notice of a proposed acquisition, the appropriate Federal banking agency shall, unless such agency determines that an emergency exists, within a reasonable period of time—

(i)

publish the name of the insured depository institution proposed to be acquired and the name of each person identified in such notice as a person by whom or for whom such acquisition is to be made; and

(ii)

solicit public comment on such proposed acquisition, particularly from persons in the geographic area where the bank 4

 So in original. The word “bank” probably should be “depository institution”.

proposed to be acquired is located, before final consideration of such notice by the agency,

unless the agency determines in writing that such disclosure or solicitation would seriously threaten the safety or soundness of such bank.⁴

(3)

Within three days after its decision to disapprove any proposed acquisition, the appropriate Federal banking agency shall notify the acquiring party in writing of the disapproval. Such notice shall provide a statement of the basis for the disapproval.

(4)

Within ten days of receipt of such notice of disapproval, the acquiring party may request an agency hearing on the proposed acquisition. In such hearing all issues shall be determined on the record pursuant to section 554 of title 5. The length of the hearing shall be determined by the appropriate Federal banking agency. At the conclusion thereof, the appropriate Federal banking agency shall by order approve or disapprove the proposed acquisition on the basis of the record made at such hearing.

(5)

Any person whose proposed acquisition is disapproved after agency hearings under this subsection may obtain review by the United States court of appeals for the circuit in which the home office of the bank ⁴ to be acquired is located, or the United States Court of Appeals for the District of Columbia Circuit, by filing a notice of appeal in such court within ten days from the date of such order, and simultaneously sending a copy of such notice by registered or certified mail to the appropriate Federal banking agency. The appropriate Federal banking agency shall promptly certify and file in such court the record upon which the disapproval was based. The findings of the appropriate Federal banking agency shall be set aside if found to be arbitrary or capricious or if found to violate procedures established by this subsection.

(6)

Except as otherwise provided by regulation of the appropriate Federal banking agency, a notice filed pursuant to this subsection shall contain the following information:

(A)

The identity, personal history, business background and experience of each person by whom or on whose behalf the acquisition is to be made, including his material business activities and affiliations during the past five years, and a description of any material pending legal or administrative proceedings in which he is a party and any criminal indictment or conviction of such person by a State or Federal court.

(B)

A statement of the assets and liabilities of each person by whom or on whose behalf the acquisition is to be made, as of the end of the fiscal year for each of the five fiscal years immediately preceding the date of the notice, together with related statements of income and source and application of funds for each of the fiscal years then concluded, all prepared in accordance with generally accepted accounting principles consistently applied, and an interim statement of the assets and liabilities for each such person, together with related statements of income and source and application of funds, as of a date not more than ninety days prior to the date of the filing of the notice.

(C)

The terms and conditions of the proposed acquisition and the manner in which the acquisition is to be made.

(D)

The identity, source and amount of the funds or other consideration used or to be used in making the acquisition, and if any part of these funds or other consideration has been or is to be borrowed or otherwise obtained for the purpose of making the acquisition, a description of the transaction, the names of the parties, and any arrangements, agreements, or understandings with such persons.

(E)

Any plans or proposals which any acquiring party making the acquisition may have to liquidate the bank,⁴ to sell its assets or merge it with any company or to make any other major change in its business or corporate structure or management.

(F)

The identification of any person employed, retained, or to be compensated by the acquiring party, or by any person on his behalf, to make solicitations or recommendations to stockholders for the purpose of assisting in the acquisition, and a brief description of the terms of such employment, retainer, or arrangement for compensation.

(G)

Copies of all invitations or tenders or advertisements making a tender offer to stockholders for purchase of their stock to be used in connection with the proposed acquisition.

(H)

Any additional relevant information in such form as the appropriate Federal banking agency may require by regulation or by specific request in connection with any particular notice.

(7)

The appropriate Federal banking agency may disapprove any proposed acquisition if—

(A)

the proposed acquisition of control would result in a monopoly or 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)

the effect of the proposed acquisition of control in any section of the country may be substantially to lessen competition or to tend to create a monopoly or the proposed acquisition of control would in any other manner be in restraint of trade, and the anticompetitive effects of the proposed acquisition of control are not 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;

(C)

either the financial condition of any acquiring person or the future prospects of the institution is such as might jeopardize the financial stability of the bank ⁴ or prejudice the interests of the depositors of the bank; ⁴

(D)

the competence, experience, or integrity of any acquiring person or of any of the proposed management personnel indicates that it would not be in the interest of the depositors of the bank, or in the interest of the public to permit such person to control the bank; ⁴

(E)

any acquiring person neglects, fails, or refuses to furnish the appropriate Federal banking agency all the information required by the appropriate Federal banking agency; or

(F)

the appropriate Federal banking agency determines that the proposed transaction would result in an adverse effect on the Deposit Insurance Fund.

(8)

For the purposes of this subsection, the term—

(A)

“person” means an individual or a corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization, or any other form of entity not specifically listed herein; and

(B)

“control” means the power, directly or indirectly, to direct the management or policies of an insured depository institution or to vote 25 per centum or more of any class of voting securities of an insured depository institution.

(9)

Reporting of stock loans.—

(A)

Report required.—

Any foreign bank, or any affiliate thereof, that has credit outstanding to any person or group of persons which is secured, directly or indirectly, by shares of an insured depository institution shall file a consolidated report with the appropriate Federal banking agency for such insured depository institution if the extensions of credit by the foreign bank or any affiliate thereof, in the aggregate, are secured, directly or indirectly, by 25 percent or more of any class of shares of the same insured depository institution.

(B)

Definitions.—

For purposes of this paragraph, the following definitions shall apply:

(i)

Foreign bank.—

The terms “foreign bank” and “affiliate” have the same meanings as in section 3101 of this title.

(ii)

Credit outstanding.—

The term “credit outstanding” includes—

(I)

any loan or extension of credit,

(II)

the issuance of a guarantee, acceptance, or letter of credit, including an endorsement or standby letter of credit, and

(III)

any other type of transaction that extends credit or financing to the person or group of persons.

(iii)

Group of persons.—

The term “group of persons” includes any number of persons that the foreign bank or any affiliate thereof reasonably believes—

(I)

are acting together, in concert, or with one another to acquire or control shares of the same insured depository institution, including an acquisition of shares of the same insured depository institution at approximately the same time under substantially the same terms; or

(II)

have made, or propose to make, a joint filing under section 78m of title 15 regarding ownership of the shares of the same insured depository institution.

(C)

Inclusion of shares held by the financial institution.—

Any shares of the insured depository institution held by the foreign bank or any affiliate thereof as principal shall be included in the calculation of the number of shares in which the foreign bank or any affiliate thereof has a security interest for purposes of subparagraph (A).

(D)

Report requirements.—

(i)

Timing of report.—

The report required under this paragraph shall be a consolidated report on behalf of the foreign bank and all affiliates thereof, and shall be filed in writing within 30 days of the date on which the foreign bank or affiliate thereof first believes that the security for any outstanding credit consists of 25 percent or more of any class of shares of an insured depository institution.

(ii)

Content of report.—

The report under this paragraph shall indicate the number and percentage of shares securing each applicable extension of credit, the identity of the borrower, and the number of shares held as principal by the foreign bank and any affiliate thereof.

(iii)

Copy to other agencies.—

A copy of any report under this paragraph shall be filed with the appropriate Federal banking agency for the foreign bank or any affiliate thereof (if other than the agency receiving the report under this paragraph).

(iv)

Other information.—

Each appropriate Federal banking agency may require any additional information necessary to carry out the agency’s supervisory responsibilities.

(E)

Exceptions.—

(i)

Exception where information provided by borrower.—

Notwithstanding subparagraph (A), a foreign bank or any affiliate thereof shall not be required to report a transaction under this paragraph if the person or group of persons referred to in such subparagraph has disclosed the amount borrowed from such foreign bank or any affiliate thereof and the security interest of the foreign bank or any affiliate thereof to the appropriate Federal banking agency for the insured depository institution in connection with a notice filed under this subsection, an application filed under the Bank Holding Company Act of 1956 [12 U.S.C. 1841 et seq.], section 1467a of this title, or any other application filed with the appropriate Federal banking agency for the insured depository institution as a substitute for a notice under this subsection, such as an application for deposit insurance, membership in the Federal Reserve System, or a national bank charter.

(ii)

Exception for shares owned for more than 1 year.—

Notwithstanding subparagraph (A), a foreign bank and any affiliate thereof shall not be required to report a transaction involving—

(I)

a person or group of persons that has been the owner or owners of record of the stock for a period of 1 year or more; or

(II)

stock issued by a newly chartered bank before the bank’s opening.

(10)

The reports required by paragraph (9) of this subsection shall contain such of the information referred to in paragraph (6) of this subsection, and such other relevant information, as the appropriate Federal banking agency may require by regulation or by specific request in connection with any particular report.

(11)

The Federal banking agency receiving a notice or report filed pursuant to paragraph (1) or (9) shall immediately furnish to the other Federal banking agencies a copy of such notice or report.

(12)

Whenever such a change in control occurs, each insured depository institution shall report promptly to the appropriate Federal banking agency any changes or replacement of its chief executive officer or of any director occurring in the next twelve-month period, including in its report a statement of the past and current business and professional affiliations of the new chief executive officer or directors.

(13)

The appropriate Federal banking agencies are authorized to issue rules and regulations to carry out this subsection.

(14)

Within two years after the effective date of the Change in Bank Control Act of 1978, and each year thereafter in each appropriate Federal banking agency’s annual report to the Congress, the appropriate Federal banking agency shall report to the Congress the results of the administration of this subsection, and make any recommendations as to changes in the law which in the opinion of the appropriate Federal banking agency would be desirable.

(15)

Investigative and Enforcement Authority.—

(A)

Investigations.—

The appropriate Federal banking agency may exercise any authority vested in such agency under section 1818(n) of this title in the course of conducting any investigation under paragraph (2)(B) or any other investigation which the agency, in its discretion, determines is necessary to determine whether any person has filed inaccurate, incomplete, or misleading information under this subsection or otherwise is violating, has violated, or is about to violate any provision of this subsection or any regulation prescribed under this subsection.

(B)

Enforcement.—

Whenever it appears to the appropriate Federal banking agency that any person is violating, has violated, or is about to violate any provision of this subsection or any regulation prescribed under this subsection, the agency may, in its discretion, apply to the appropriate district court of the United States or the United States court of any territory for—

(i)

a temporary or permanent injunction or restraining order enjoining such person from violating this subsection or any regulation prescribed under this subsection; or

(ii)

such other equitable relief as may be necessary to prevent any such violation (including divestiture).

(C)

Jurisdiction.—

(i)

The district courts of the United States and the United States courts in any territory shall have the same jurisdiction and power in connection with any exercise of any authority by the appropriate Federal banking agency under subparagraph (A) as such courts have under section 1818(n) of this title.

(ii)

The district courts of the United States and the United States courts of any territory shall have jurisdiction and power to issue any injunction or restraining order or grant any equitable relief described in subparagraph (B). When appropriate, any injunction, order, or other equitable relief granted under this paragraph shall be granted without requiring the posting of any bond.

The resignation, termination of employment or participation, divestiture of control, or separation of or by an institution-affiliated party (including a separation caused by the closing of a depository institution) shall not affect the jurisdiction and authority of the appropriate Federal banking agency to issue any notice and proceed under this subsection against any such party, if such notice is served before the end of the 6-year period beginning on the date such party ceased to be such a party with respect to such depository institution (whether such date occurs before, on, or after August 9, 1989).

(16)

Civil money penalty.—

(A)

First tier.—

Any person who violates any provision of this subsection, or any regulation or order issued by the appropriate Federal banking agency under this subsection, shall forfeit and pay a civil penalty of not more than $5,000 for each day during which such violation continues.

(B)

Second tier.—

Notwithstanding subparagraph (A), any person who—

(i)

(I)

commits any violation described in any clause of subparagraph (A);

(II)

recklessly engages in an unsafe or unsound practice in conducting the affairs of a depository institution; or

(III)

breaches any fiduciary duty;

(ii)

which violation, practice, or breach—

(I)

is part of a pattern of misconduct;

(II)

causes or is likely to cause more than a minimal loss to such institution; or

(III)

results in pecuniary gain or other benefit to such person,

shall forfeit and pay a civil penalty of not more than $25,000 for each day during which such violation, practice, or breach continues.

(C)

Third tier.—

Notwithstanding subparagraphs (A) and (B), any person who—

(i)

knowingly—

(I)

commits any violation described in any clause of subparagraph (A);

(II)

engages in any unsafe or unsound practice in conducting the affairs of a depository institution; or

(III)

breaches any fiduciary duty; and

(ii)

knowingly or recklessly causes a substantial loss to such institution or a substantial pecuniary gain or other benefit to such person by reason of such violation, practice, or breach,

shall forfeit and pay a civil penalty in an amount not to exceed the applicable maximum amount determined under subparagraph (D) for each day during which such violation, practice, or breach continues.

(D)

Maximum amounts of penalties for any violation described in subparagraph (c).—

The maximum daily amount of any civil penalty which may be assessed pursuant to subparagraph (C) for any violation, practice, or breach described in such subparagraph is—

(i)

in the case of any person other than a depository institution, an amount to not exceed $1,000,000; and

(ii)

in the case of a depository institution, an amount not to exceed the lesser of—

(I)

$1,000,000; or

(II)

1 percent of the total assets of such institution.

(E)

Assessment; etc.—

Any penalty imposed under subparagraph (A), (B), or (C) shall be assessed and collected by the appropriate Federal banking agency in the manner provided in subparagraphs (E), (F), (G), and (I) of section 1818(i)(2) of this title for penalties imposed (under such section) and any such assessment shall be subject to the provisions of such section.

(F)

Hearing.—

The depository institution or other person against whom any penalty is assessed under this paragraph shall be afforded an agency hearing if such institution or other person submits a request for such hearing within 20 days after the issuance of the notice of assessment. Section 1818(h) of this title shall apply to any proceeding under this paragraph.

(G)

Disbursement.—

All penalties collected under authority of this paragraph shall be deposited into the Treasury.

(17)

Exceptions.—

This subsection shall not apply with respect to a transaction which is subject to—

(A)

section 1842 of this title;

(B)

section 1828(c) of this title; or

(C)

section 1467a of this title.

(18)

Applicability of change in control provisions to other institutions.—

For purposes of this subsection, the term “insured depository institution” includes—

(A)

any depository institution holding company; and

(B)

any other company which controls an insured depository institution and is not a depository institution holding company.

(k)

Federal banking agency rules and regulations for reports and public disclosure by banks of extension of credit to executive officers or principal shareholders or the related interests of such persons

(l)

Designation of fund membership for newly insured depository institutions; definitions

For purposes of this section:

(1)

Bank Insurance Fund

Any institution which—

(A)

becomes an insured depository institution; and

(B)

does not become a Savings Association Insurance Fund member pursuant to paragraph (2),

shall be a Bank Insurance Fund member.

(2)

Savings Association Insurance Fund

(3)

Transition provision

(A)

Bank Insurance Fund

Any depository institution the deposits of which were insured by the Federal Deposit Insurance Corporation on the day before August 9, 1989, including—

(i)

any Federal savings bank chartered pursuant to section 1464(o) of this title; and

(ii)

any cooperative bank,

shall be a Bank Insurance Fund member as of August 9, 1989.

(B)

Savings Association Insurance Fund

(4)

Bank Insurance Fund member

(5)

Savings Association Insurance Fund member

(6)

Bank Insurance Fund reserve ratio

(7)

Savings Association Insurance Fund reserve ratio

(m)

Secondary reserve offsets against premiums

(1)

Offsets in calendar years beginning before 1993

(2)

Annual maximum amount limitation

(3)

Offsets in calendar years beginning after 1992

(4)

Transferability

(5)

Pro rata distribution on termination of insured status

If—

(A)

the status of any savings association as an insured depository institution is terminated pursuant to any provision of section 1818 of this title or the insurance of accounts of any such institution is otherwise terminated;

(B)

a receiver or other legal custodian is appointed for the purpose of liquidation or winding up the affairs of any savings association; or

(C)

the Corporation makes a determination that for the purposes of this subsection any savings association has otherwise gone into liquidation,

the Corporation shall pay in cash to such institution its pro rata share of the secondary reserve, in accordance with such terms and conditions as the Corporation may prescribe, or, at the option of the Corporation, the Corporation may apply the whole or any part of the amount which would otherwise be paid in cash toward the payment of any indebtedness or obligation, whether matured or not, of such institution to the Corporation, existing or arising before such payment in cash. Such payment or such application need not be made to the extent that the provisions of the exception in paragraph (4) are applicable.

(6)

“Statutorily prescribed amount” defined

For purposes of this subsection, the term “statutorily prescribed amount” means, with respect to any calendar year which ends after August 9, 1989—

(A)

$823,705,000, minus

(B)

the sum of—

(i)

the aggregate amount of offsets made before August 9, 1989, by all insured institutions under section 404(e)(2) ¹ of the National Housing Act [12 U.S.C. 1727(e)(2)] (as in effect before August 9, 1989); and

(ii)

the aggregate amount of offsets made by all savings associations under this subsection before the beginning of such calendar year.

(7)

Savings association’s pro rata amount

(8)

Year of enactment rule

(A)

in the computation of the statutorily prescribed amount which shall be applicable for the remainder of such calendar year after taking into account the aggregate amount of offsets by all insured institutions under section 404(e)(2) ¹ of the National Housing Act [12 U.S.C. 1727(e)(2)] (as in effect before August 9, 1989) after the beginning of such calendar year and before August 9, 1989; and

(B)

in the computation of the maximum amount of any savings association’s offset for such calendar year under paragraph (1) after taking into account—

(i)

the amount of any offset by such savings association under section 404(e)(2) ¹ of the National Housing Act (as in effect before August 9, 1989) after the beginning of such calendar year and before August 9, 1989; and

(ii)

the change of such association’s premium year from the 1-year period applicable under section 404(b) ¹ of the National Housing Act (as in effect before August 9, 1989) to a calendar year basis.

(n)

Collections on behalf of the Comptroller of the Currency

(Sept. 21, 1950, ch. 967, § 2[7], 64 Stat. 876; Pub. L. 86–671, §§ 2, 3, July 14, 1960, 74 Stat. 547–551; Pub. L. 88–593, Sept. 12, 1964, 78 Stat. 940; Pub. L. 89–695, title II, § 201, title III, § 301(b), Oct. 16, 1966, 80 Stat. 1046, 1055; Pub. L. 91–151, § 7(a)(2), Dec. 23, 1969, 83 Stat. 375; Pub. L. 91–609, title IX, § 910(g), (h), Dec. 31, 1970, 84 Stat. 1812; Pub. L. 93–495, title I, §§ 101(a)(2), 102(a)(2), Oct. 28, 1974, 88 Stat. 1500, 1502; Pub. L. 95–369, § 6(c)(8)–(13), Sept. 17, 1978, 92 Stat. 617, 618; Pub. L. 95–630, title III, §§ 302, 310, title VI, § 602, title IX, § 901, Nov. 10, 1978, 92 Stat. 3676, 3678, 3683, 3693; Pub. L. 96–221, title III, § 308(a)(1)(B), (d), Mar. 31, 1980, 94 Stat. 147, 148; Pub. L. 97–110, title I, § 103(b), Dec. 26, 1981, 95 Stat. 1514; Pub. L. 97–320, title I, §§ 113(d)–(f), (q), 117, title IV, § 429, Oct. 15, 1982, 96 Stat. 1473, 1475, 1479, 1527; Pub. L. 99–570, title I, § 1360, Oct. 27, 1986, 100 Stat. 3207–29; Pub. L. 100–86, title V, § 505(a), Aug. 10, 1987, 101 Stat. 633; Pub. L. 101–73, title II, §§ 201, 208, title IX, §§ 905(c), 907(d), 911(c), 931(a), Aug. 9, 1989, 103 Stat. 187, 206, 460, 468, 479, 493; Pub. L. 101–508, title II, §§ 2002–2004, Nov. 5, 1990, 104 Stat. 1388–14—1388–16; Pub. L. 102–242, title I, §§ 103(b), 104, 113(c)(1), 141(c), title II, §§ 205, 232(b), 233(c), title III, §§ 302(a), (b), (e)(3), (4), formerly (e)(2), (3), 311(a)(2), (b)(3), 313(a), title IV, § 474, Dec. 19, 1991, 105 Stat. 2238, 2247, 2277, 2292, 2310, 2314, 2345, 2348, 2349, 2363, 2365, 2368, 2386; Pub. L. 102–550, title IX, § 931(a), (b), title XVI, §§ 1603(a)(1), (3), 1604(b)(1), (3), 1605(a)(2), (5)(A), (6), (b)(1), (2), 1606(i)(1), Oct. 28, 1992, 106 Stat. 3888, 4078, 4083, 4085–4087, 4089; Pub. L. 102–558, title III, §§ 303(a), (b)(1), (3), (6)(A), (7), (8), 305, Oct. 28, 1992, 106 Stat. 4224–4226; Pub. L. 103–204, §§ 8(h), 38(a), Dec. 17, 1993, 107 Stat. 2388, 2416; Pub. L. 103–325, title III, §§ 305(b), 308(b), 348, title VI, § 602(a)(4)–(10), Sept. 23, 1994, 108 Stat. 2217, 2218, 2241, 2288; Pub. L. 104–208, div. A, title II, §§ 2226, 2703(b), 2704(d)(6)(B), (14)(G), 2706–2708, Sept. 30, 1996, 110 Stat. 3009–417, 3009–485, 3009–488, 3009–491, 3009–496, 3009–497; Pub. L. 106–569, title XII, § 1231(a), Dec. 27, 2000, 114 Stat. 3036; Pub. L. 108–386, § 8(a)(2), Oct. 30, 2004, 118 Stat. 2231; Pub. L. 109–171, title II, §§ 2102(b), 2104(a), (b), (d), 2105(a), 2106, 2107(a), 2108, Feb. 8, 2006, 120 Stat. 9, 12–16, 19; Pub. L. 109–173, §§ 2(b), 3(a)(1)–(5), 8(a)(8), (9), Feb. 15, 2006, 119 Stat. 3602, 3605, 3611; Pub. L. 109–351, title VI, § 604, title VII, §§ 705, 707(a), Oct. 13, 2006, 120 Stat. 1980, 1987; Pub. L. 111–22, div. A, title II, § 204(b), May 20, 2009, 123 Stat. 1649; Pub. L. 111–203, title III, §§ 331(a), 332–334(a), 363(2), title IX, § 939(a)(1), July 21, 2010, 124 Stat. 1538, 1539, 1550, 1885; Pub. L. 115–174, title II, § 205, May 24, 2018, 132 Stat. 1310.)

cite as: 12 USC 1817