12 U.S.C. § 1815 : US Code - Section 1815: Deposit insurance

Search 12 U.S.C. § 1815 : US Code - Section 1815: Deposit insurance

(a) Application to Corporation required
(1) In general
Except as provided in paragraphs (2) and (3), any depository
institution which is engaged in the business of receiving
deposits other than trust funds (as defined in section 1813(p) of
this title), upon application to and examination by the
Corporation and approval by the Board of Directors, may become an
insured depository institution.
(2) Interim depository institutions
In the case of any interim Federal depository institution that
is chartered by the appropriate Federal banking agency and will
not open for business, the depository institution shall be an
insured depository institution upon the issuance of the
institution's charter by the agency.
(3) Application and approval not required in cases of continued
insurance
Paragraph (1) shall not apply in the case of any depository
institution whose insured status is continued pursuant to section
1814 of this title.
(4) Review requirements
In reviewing any application under this subsection, the Board
of Directors shall consider the factors described in section 1816
of this title in determining whether to approve the application
for insurance.
(5) Notice of denial of application for insurance
If the Board of Directors votes to deny any application for
insurance by any depository institution, the Board of Directors
shall promptly notify the appropriate Federal banking agency and,
in the case of any State depository institution, the appropriate
State banking supervisor of the denial of such application,
giving specific reasons in writing for the Board of Directors'
determination with reference to the factors described in section
1816 of this title.
(6) Nondelegation requirement
The authority of the Board of Directors to make any
determination to deny any application under this subsection may
not be delegated by the Board of Directors.
(b) Foreign branch nonmember banks; matters considered
Subject to the provisions of this chapter and to such terms and
conditions as the Board of Directors may impose, any branch of a
foreign bank, upon application by the bank to the Corporation, and
examination by the Corporation of the branch, and approval by the
Board of Directors, may become an insured branch. Before approving
any such application, the Board of Directors shall give
consideration to -
(1) the financial history and condition of the bank,
(2) the adequacy of its capital structure,
(3) its future earnings prospects,
(4) the general character and fitness of its management,
including but not limited to the management of the branch
proposed to be insured,
(5) the risk presented to the Deposit Insurance Fund,
(6) the convenience and needs of the community to be served by
the branch,
(7) whether or not its corporate powers, insofar as they will
be exercised through the proposed insured branch, are consistent
with the purposes of this chapter, and
(8) the probable adequacy and reliability of information
supplied and to be supplied by the bank to the Corporation to
enable it to carry out its functions under this chapter.
(c) Protection to Deposit Insurance Fund; surety bond, pledge of
assets, etc.; injunction
(1) Before any branch of a foreign bank becomes an insured
branch, the bank shall deliver to the Corporation or as the
Corporation may direct a surety bond, a pledge of assets, or both,
in such amounts and of such types as the Corporation may require or
approve, for the purpose set forth in paragraph (4) of this
subsection.
(2) After any branch of a foreign bank becomes an insured branch,
the bank shall maintain on deposit with the Corporation, or as the
Corporation may direct, surety bonds or assets or both, in such
amounts and of such types as shall be determined from time to time
in accordance with such regulations as the Board of Directors may
prescribe. Such regulations may impose differing requirements on
the basis of any factors which in the judgment of the Board of
Directors are reasonably related to the purpose set forth in
paragraph (4).
(3) The Corporation may require of any given bank larger deposits
of bonds and assets than required under paragraph (2) of this
subsection if, in the judgment of the Corporation, the situation of
that bank or any branch thereof is or becomes such that the
deposits of bonds and assets otherwise required under this section
would not adequately fulfill the purpose set forth in paragraph
(4). The imposition of any such additional requirements may be
without notice or opportunity for hearing, but the Corporation
shall afford an opportunity to any such bank to apply for a
reduction or removal of any such additional requirements so
imposed.
(4) The purpose of the surety bonds and pledges of assets
required under this subsection is to provide protection to the
Deposit Insurance Fund against the risks entailed in insuring the
domestic deposits of a foreign bank whose activities, assets, and
personnel are in large part outside the jurisdiction of the United
States. In the implementation of its authority under this
subsection, however, the Corporation shall endeavor to avoid
imposing requirements on such banks which would unnecessarily place
them at a competitive disadvantage in relation to domestically
incorporated banks.
(5) In the case of any failure or threatened failure of a foreign
bank to comply with any requirement imposed under this subsection
(c), the Corporation, in addition to all other administrative and
judicial remedies, may apply to any United States district court,
or United States court of any territory, within the jurisdiction of
which any branch of the bank is located, for an injunction to
compel such bank and any officer, employee, or agent thereof, or
any other person having custody or control of any of its assets, to
deliver to the Corporation such assets as may be necessary to meet
such requirement, and to take any other action necessary to vest
the Corporation with control of assets so delivered. If the court
shall determine that there has been any such failure or threatened
failure to comply with any such requirement, it shall be the duty
of the court to issue such injunction. The propriety of the
requirement may be litigated only as provided in chapter 7 of title
5, and may not be made an issue in an action for an injunction
under this paragraph.
(d) Insurance fees
(1) In general
Any institution that becomes insured by the Corporation, and
any noninsured branch that becomes insured by the Corporation,
shall pay the Corporation any fee which the Corporation may by
regulation prescribe, after giving due consideration to the
need to establish and maintain the reserve ratio of the Deposit
Insurance Fund.
(2) Fee credited to the Deposit Insurance Fund
The fee paid by the depository institution under paragraph (1)
shall be credited to the Deposit Insurance Fund.
(3) Exception for certain depository institutions
Any depository institution that becomes an insured depository
institution by operation of section 1814(a) of this title shall
not pay any fee.
(e) Liability of commonly controlled depository institutions
(1) In general
(A) Liability established
Any insured depository institution shall be liable for any
loss incurred by the Corporation, or any loss which the
Corporation reasonably anticipates incurring, after August 9,
1989, in connection with -
(i) the default of a commonly controlled insured depository
institution; or
(ii) any assistance provided by the Corporation to any
commonly controlled insured depository institution in danger
of default.
(B) Payment upon notice
An insured depository institution shall pay the amount of any
liability to the Corporation under subparagraph (A) upon
receipt of written notice by the Corporation in accordance with
this subsection.
(C) Notice required to be provided within 2 years of loss
No insured depository institution shall be liable to the
Corporation under subparagraph (A) if written notice with
respect to such liability is not received by such institution
before the end of the 2-year period beginning on the date the
Corporation incurred the loss.
(2) Amount of compensation; procedures
(A) Use of estimates
When an insured depository institution is in default or
requires assistance to prevent default, the Corporation shall -

(i) in good faith, estimate the amount of the loss the
Corporation will incur from such default or assistance;
(ii) if, with respect to such insured depository
institution, there is more than 1 commonly controlled insured
depository institution, estimate the amount of each such
commonly controlled depository institution's share of such
liability; and
(iii) advise each commonly controlled depository
institution of the Corporation's estimate of the amount of
such institution's liability for such losses.
(B) Procedures; immediate payment
The Corporation, after consultation with the appropriate
Federal banking agency and the appropriate State chartering
agency, shall -
(i) on a case-by-case basis, establish the procedures and
schedule under which any insured depository institution shall
reimburse the Corporation for such institution's liability
under paragraph (1) in connection with any commonly
controlled insured depository institution; or
(ii) require any insured depository institution to make
immediate payment of the amount of such institution's
liability under paragraph (1) in connection with any commonly
controlled insured depository institution.
(C) Priority
The liability of any insured depository institution under
this subsection shall have priority with respect to other
obligations and liabilities as follows:
(i) Superiority
The liability shall be superior to the following
obligations and liabilities of the depository institution:
(I) Any obligation to shareholders arising as a result of
their status as shareholders (including any depository
institution holding company or any shareholder or creditor
of such company).
(II) Any obligation or liability owed to any affiliate of
the depository institution (including any other insured
depository institution), other than any secured obligation
which was secured as of May 1, 1989.
(ii) Subordination
The liability shall be subordinate in right and payment to
the following obligations and liabilities of the depository
institution:
(I) Any deposit liability (which is not a liability
described in clause (i)(II)).
(II) Any secured obligation, other than any obligation
owed to any affiliate of the depository institution
(including any other insured depository institution) which
was secured after May 1, 1989.
(III) Any other general or senior liability (which is not
a liability described in clause (i)).
(IV) Any obligation subordinated to depositors or other
general creditors (which is not an obligation described in
clause (i)).
(D) Adjustment of estimated payment
(i) Overpayment
If the amount of compensation estimated by and paid to the
Corporation by 1 or more such commonly controlled depository
institutions is greater than the actual loss incurred by the
Corporation, the Corporation shall reimburse each such
commonly controlled depository institution its pro rata share
of any overpayment.
(ii) Underpayment
If the amount of compensation estimated by and paid to the
Corporation by 1 or more such commonly controlled depository
institutions is less than the actual loss incurred by the
Corporation, the Corporation shall redetermine in its
discretion the liability of each such commonly controlled
depository institution to the Corporation and shall require
each such commonly controlled depository institution to make
payment of any additional liability to the Corporation.
(3) Review
(A) Judicial
Actions of the Corporation shall be reviewable pursuant to
chapter 7 of title 5.
(B) Administrative
The Corporation shall prescribe regulations and establish
administrative procedures which provide for a hearing on the
record for the review of -
(i) the amount of any loss incurred by the Corporation in
connection with any insured depository institution;
(ii) the liability of individual commonly controlled
depository institutions for the amount of such loss; and
(iii) the schedule of payments to be made by such commonly
controlled depository institutions.
(4) Limitation on rights of private parties
To the extent the exercise of any right or power of any person
would impair the ability of any insured depository institution to
perform such institution's obligations under this subsection -
(A) the obligations of such insured depository institution
shall supersede such right or power; and
(B) no court may give effect to such right or power with
respect to such insured depository institution.
(5) Waiver authority
(A) In general
The Corporation, in its discretion, may exempt any insured
depository institution from the provisions of this subsection
if the Corporation determines that such exemption is in the
best interests of the Deposit Insurance Fund.
(B) Condition
During the period any exemption granted to any insured
depository institution under subparagraph (A) or (C) is in
effect, such insured depository institution and all other
insured depository institution affiliates of such depository
institution shall comply fully with the restrictions of
sections 371c and 371c-1 of this title without regard to
section 371c(d)(1) of this title.
(C) Limited partnerships
(i) In general
The Corporation may, in its discretion, exempt any limited
partnership and any affiliate of any limited partnership
(other than any insured depository institution which is a
majority owned subsidiary of such partnership) from the
provisions of this subsection if such limited partnership or
affiliate has filed a registration statement with the
Securities and Exchange Commission on or before April 10,
1989, indicating that as of the date of such filing such
partnership intended to acquire 1 or more insured depository
institutions.
(ii) Review and notice
Within 10 business days after the date of submission of any
request for an exemption under this subparagraph together
with such information as shall be reasonably requested by the
Corporation, the Corporation shall make a determination on
the request and shall so advise the applicant.
(6) Exclusion for institutions acquired in debt collections
Any depository institution shall not be treated as commonly
controlled, for purposes of this subsection, during the 5-year
period beginning on the date of an acquisition described in
subparagraph (A) or such longer period as the Corporation may
determine after written application by the acquirer, if -
(A) 1 depository institution controls another by virtue of
ownership of voting shares acquired in securing or collecting a
debt previously contracted in good faith; and
(B) during the period beginning on August 9, 1989, and ending
upon the expiration of the exclusion, the controlling bank and
all other insured depository institution affiliates of such
controlling bank comply fully with the restrictions of sections
371c and 371c-1 of this title, without regard to section
371c(d)(1) of this title, in transactions with the acquired
insured depository institution.
(7) Exception for certain FSLIC assisted institutions
No depository institution shall have any liability to the
Corporation under this subsection as the result of the default
of, or assistance provided with respect to, an insured depository
institution which is an affiliate of such depository institution
if -
(A) such affiliate was receiving cash payments from the
Federal Savings and Loan Insurance Corporation under an
assistance agreement or note entered into before August 9,
1989;
(B) the Federal Savings and Loan Insurance Corporation, or
such other entity which has succeeded to the payment
obligations of such Corporation with respect to such assistance
agreement or note, is unable to continue such payments; and
(C) such affiliate -
(i) is in default or in need of assistance solely as a
result of the failure to meet the payment obligations
referred to in subparagraph (B); and
(ii) is not otherwise in breach of the terms of any
assistance agreement or note which would authorize the
Federal Savings and Loan Insurance Corporation or such other
successor entity, pursuant to the terms of such assistance
agreement or note, to refuse to make such payments.
(8) Commonly controlled defined
For purposes of this subsection, depository institutions are
commonly controlled if -
(A) such institutions are controlled by the same company; or
(B) 1 depository institution is controlled by another
depository institution.