12 U.S.C. § 1831o : US Code - Section 1831O: Prompt corrective action

Search 12 U.S.C. § 1831o : US Code - Section 1831O: Prompt corrective action

(a) Resolving problems to protect Deposit Insurance Fund
(1) Purpose
The purpose of this section is to resolve the problems of
insured depository institutions at the least possible long-term
loss to the Deposit Insurance Fund.
(2) Prompt corrective action required
Each appropriate Federal banking agency and the Corporation
(acting in the Corporation's capacity as the insurer of
depository institutions under this chapter) shall carry out the
purpose of this section by taking prompt corrective action to
resolve the problems of insured depository institutions.
(b) Definitions
For purposes of this section:
(1) Capital categories
(A) Well capitalized
An insured depository institution is "well capitalized" if it
significantly exceeds the required minimum level for each
relevant capital measure.
(B) Adequately capitalized
An insured depository institution is "adequately capitalized"
if it meets the required minimum level for each relevant
capital measure.
(C) Undercapitalized
An insured depository institution is "undercapitalized" if it
fails to meet the required minimum level for any relevant
capital measure.
(D) Significantly undercapitalized
An insured depository institution is "significantly
undercapitalized" if it is significantly below the required
minimum level for any relevant capital measure.
(E) Critically undercapitalized
An insured depository institution is "critically
undercapitalized" if it fails to meet any level specified under
subsection (c)(3)(A) of this section.
(2) Other definitions
(A) Average
(i) In general
The "average" of an accounting item (such as total assets
or tangible equity) during a given period means the sum of
that item at the close of business on each business day
during that period divided by the total number of business
days in that period.
(ii) Agency may permit weekly averaging for certain
institutions
In the case of insured depository institutions that have
total assets of less than $300,000,000 and normally file
reports of condition reflecting weekly (rather than daily)
averages of accounting items, the appropriate Federal banking
agency may provide that the "average" of an accounting item
during a given period means the sum of that item at the close
of business on the relevant business day each week during
that period divided by the total number of weeks in that
period.
(B) Capital distribution
The term "capital distribution" means -
(i) a distribution of cash or other property by any insured
depository institution or company to its owners made on
account of that ownership, but not including -
(I) any dividend consisting only of shares of the
institution or company or rights to purchase such shares;
or
(II) any amount paid on the deposits of a mutual or
cooperative institution that the appropriate Federal
banking agency determines is not a distribution for
purposes of this section;
(ii) a payment by an insured depository institution or
company to repurchase, redeem, retire, or otherwise acquire
any of its shares or other ownership interests, including any
extension of credit to finance an affiliated company's
acquisition of those shares or interests; or
(iii) a transaction that the appropriate Federal banking
agency or the Corporation determines, by order or regulation,
to be in substance a distribution of capital to the owners of
the insured depository institution or company.
(C) Capital restoration plan
The term "capital restoration plan" means a plan submitted
under subsection (e)(2) of this section.
(D) Company
The term "company" has the same meaning as in section 1841 of
this title.
(E) Compensation
The term "compensation" includes any payment of money or
provision of any other thing of value in consideration of
employment.
(F) Relevant capital measure
The term "relevant capital measure" means the measures
described in subsection (c) of this section.
(G) Required minimum level
The term "required minimum level" means, with respect to each
relevant capital measure, the minimum acceptable capital level
specified by the appropriate Federal banking agency by
regulation.
(H) Senior executive officer
The term "senior executive officer" has the same meaning as
the term "executive officer" in section 375b of this title.
(I) Subordinated debt
The term "subordinated debt" means debt subordinated to the
claims of general creditors.
(c) Capital standards
(1) Relevant capital measures
(A) In general
Except as provided in subparagraph (B)(ii), the capital
standards prescribed by each appropriate Federal banking agency
shall include -
(i) a leverage limit; and
(ii) a risk-based capital requirement.
(B) Other capital measures
An appropriate Federal banking agency may, by regulation -
(i) establish any additional relevant capital measures to
carry out the purpose of this section; or
(ii) rescind any relevant capital measure required under
subparagraph (A) upon determining (with the concurrence of
the other Federal banking agencies) that the measure is no
longer an appropriate means for carrying out the purpose of
this section.
(2) Capital categories generally
Each appropriate Federal banking agency shall, by regulation,
specify for each relevant capital measure the levels at which an
insured depository institution is well capitalized, adequately
capitalized, undercapitalized, and significantly
undercapitalized.
(3) Critical capital
(A) Agency to specify level
(i) Leverage limit
Each appropriate Federal banking agency shall, by
regulation, in consultation with the Corporation, specify the
ratio of tangible equity to total assets at which an insured
depository institution is critically undercapitalized.
(ii) Other relevant capital measures
The agency may, by regulation, specify for 1 or more other
relevant capital measures, the level at which an insured
depository institution is critically undercapitalized.
(B) Leverage limit range
The level specified under subparagraph (A)(i) shall require
tangible equity in an amount -
(i) not less than 2 percent of total assets; and
(ii) except as provided in clause (i), not more than 65
percent of the required minimum level of capital under the
leverage limit.
(C) FDIC's concurrence required
The appropriate Federal banking agency shall not, without the
concurrence of the Corporation, specify a level under
subparagraph (A)(i) lower than that specified by the
Corporation for State nonmember insured banks.
(d) Provisions applicable to all institutions
(1) Capital distributions restricted
(A) In general
An insured depository institution shall make no capital
distribution if, after making the distribution, the institution
would be undercapitalized.
(B) Exception
Notwithstanding subparagraph (A), the appropriate Federal
banking agency may permit, after consultation with the
Corporation, an insured depository institution to repurchase,
redeem, retire, or otherwise acquire shares or ownership
interests if the repurchase, redemption, retirement, or other
acquisition -
(i) is made in connection with the issuance of additional
shares or obligations of the institution in at least an
equivalent amount; and
(ii) will reduce the institution's financial obligations or
otherwise improve the institution's financial condition.
(2) Management fees restricted
An insured depository institution shall pay no management fee
to any person having control of that institution if, after making
the payment, the institution would be undercapitalized.
(e) Provisions applicable to undercapitalized institutions
(1) Monitoring required
Each appropriate Federal banking agency shall -
(A) closely monitor the condition of any undercapitalized
insured depository institution;
(B) closely monitor compliance with capital restoration
plans, restrictions, and requirements imposed under this
section; and
(C) periodically review the plan, restrictions, and
requirements applicable to any undercapitalized insured
depository institution to determine whether the plan,
restrictions, and requirements are achieving the purpose of
this section.
(2) Capital restoration plan required
(A) In general
Any undercapitalized insured depository institution shall
submit an acceptable capital restoration plan to the
appropriate Federal banking agency within the time allowed by
the agency under subparagraph (D).
(B) Contents of plan
The capital restoration plan shall -
(i) specify -
(I) the steps the insured depository institution will
take to become adequately capitalized;
(II) the levels of capital to be attained during each
year in which the plan will be in effect;
(III) how the institution will comply with the
restrictions or requirements then in effect under this
section; and
(IV) the types and levels of activities in which the
institution will engage; and
(ii) contain such other information as the appropriate
Federal banking agency may require.
(C) Criteria for accepting plan
The appropriate Federal banking agency shall not accept a
capital restoration plan unless the agency determines that -
(i) the plan -
(I) complies with subparagraph (B);
(II) is based on realistic assumptions, and is likely to
succeed in restoring the institution's capital; and
(III) would not appreciably increase the risk (including
credit risk, interest-rate risk, and other types of risk)
to which the institution is exposed; and
(ii) if the insured depository institution is
undercapitalized, each company having control of the
institution has -
(I) guaranteed that the institution will comply with the
plan until the institution has been adequately capitalized
on average during each of 4 consecutive calendar quarters;
and
(II) provided appropriate assurances of performance.
(D) Deadlines for submission and review of plans
The appropriate Federal banking agency shall by regulation
establish deadlines that -
(i) provide insured depository institutions with reasonable
time to submit capital restoration plans, and generally
require an institution to submit a plan not later than 45
days after the institution becomes undercapitalized;
(ii) require the agency to act on capital restoration plans
expeditiously, and generally not later than 60 days after the
plan is submitted; and
(iii) require the agency to submit a copy of any plan
approved by the agency to the Corporation before the end of
the 45-day period beginning on the date such approval is
granted.
(E) Guarantee liability limited
(i) In general
The aggregate liability under subparagraph (C)(ii) of all
companies having control of an insured depository institution
shall be the lesser of -
(I) an amount equal to 5 percent of the institution's
total assets at the time the institution became
undercapitalized; or
(II) the amount which is necessary (or would have been
necessary) to bring the institution into compliance with
all capital standards applicable with respect to such
institution as of the time the institution fails to comply
with a plan under this subsection.
(ii) Certain affiliates not affected
This paragraph may not be construed as -
(I) requiring any company not having control of an
undercapitalized insured depository institution to
guarantee, or otherwise be liable on, a capital restoration
plan;
(II) requiring any person other than an insured
depository institution to submit a capital restoration
plan; or
(III) affecting compliance by brokers, dealers,
government securities brokers, and government securities
dealers with the financial responsibility requirements of
the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.]
and regulations and orders thereunder.
(3) Asset growth restricted
An undercapitalized insured depository institution shall not
permit its average total assets during any calendar quarter to
exceed its average total assets during the preceding calendar
quarter unless -
(A) the appropriate Federal banking agency has accepted the
institution's capital restoration plan;
(B) any increase in total assets is consistent with the plan;
and
(C) the institution's ratio of tangible equity to assets
increases during the calendar quarter at a rate sufficient to
enable the institution to become adequately capitalized within
a reasonable time.
(4) Prior approval required for acquisitions, branching, and new
lines of business
An undercapitalized insured depository institution shall not,
directly or indirectly, acquire any interest in any company or
insured depository institution, establish or acquire any
additional branch office, or engage in any new line of business
unless -
(A) the appropriate Federal banking agency has accepted the
insured depository institution's capital restoration plan, the
institution is implementing the plan, and the agency determines
that the proposed action is consistent with and will further
the achievement of the plan; or
(B) the Board of Directors determines that the proposed
action will further the purpose of this section.
(5) Discretionary safeguards
The appropriate Federal banking agency may, with respect to any
undercapitalized insured depository institution, take actions
described in any subparagraph of subsection (f)(2) of this
section if the agency determines that those actions are necessary
to carry out the purpose of this section.
(f) Provisions applicable to significantly undercapitalized
institutions and undercapitalized institutions that fail to
submit and implement capital restoration plans
(1) In general
This subsection shall apply with respect to any insured
depository institution that -
(A) is significantly undercapitalized; or
(B) is undercapitalized and -
(i) fails to submit an acceptable capital restoration plan
within the time allowed by the appropriate Federal banking
agency under subsection (e)(2)(D) of this section; or
(ii) fails in any material respect to implement a plan
accepted by the agency.
(2) Specific actions authorized
The appropriate Federal banking agency shall carry out this
section by taking 1 or more of the following actions:
(A) Requiring recapitalization
Doing 1 or more of the following:
(i) Requiring the institution to sell enough shares or
obligations of the institution so that the institution will
be adequately capitalized after the sale.
(ii) Further requiring that instruments sold under clause
(i) be voting shares.
(iii) Requiring the institution to be acquired by a
depository institution holding company, or to combine with
another insured depository institution, if 1 or more grounds
exist for appointing a conservator or receiver for the
institution.
(B) Restricting transactions with affiliates
(i) Requiring the institution to comply with section 371c of
this title as if subsection (d)(1) of that section (exempting
transactions with certain affiliated institutions) did not
apply.
(ii) Further restricting the institution's transactions with
affiliates.
(C) Restricting interest rates paid
(i) In general
Restricting the interest rates that the institution pays on
deposits to the prevailing rates of interest on deposits of
comparable amounts and maturities in the region where the
institution is located, as determined by the agency.
(ii) Retroactive restrictions prohibited
This subparagraph does not authorize the agency to restrict
interest rates paid on time deposits made before (and not
renewed or renegotiated after) the agency acted under this
subparagraph.
(D) Restricting asset growth
Restricting the institution's asset growth more stringently
than subsection (e)(3) of this section, or requiring the
institution to reduce its total assets.
(E) Restricting activities
Requiring the institution or any of its subsidiaries to
alter, reduce, or terminate any activity that the agency
determines poses excessive risk to the institution.
(F) Improving management
Doing 1 or more of the following:
(i) New election of directors
Ordering a new election for the institution's board of
directors.
(ii) Dismissing directors or senior executive officers
Requiring the institution to dismiss from office any
director or senior executive officer who had held office for
more than 180 days immediately before the institution became
undercapitalized. Dismissal under this clause shall not be
construed to be a removal under section 1818 of this title.
(iii) Employing qualified senior executive officers
Requiring the institution to employ qualified senior
executive officers (who, if the agency so specifies, shall be
subject to approval by the agency).
(G) Prohibiting deposits from correspondent banks
Prohibiting the acceptance by the institution of deposits
from correspondent depository institutions, including renewals
and rollovers of prior deposits.
(H) Requiring prior approval for capital distributions by bank
holding company
Prohibiting any bank holding company having control of the
insured depository institution from making any capital
distribution without the prior approval of the Board of
Governors of the Federal Reserve System.
(I) Requiring divestiture
Doing one or more of the following:
(i) Divestiture by the institution
Requiring the institution to divest itself of or liquidate
any subsidiary if the agency determines that the subsidiary
is in danger of becoming insolvent and poses a significant
risk to the institution, or is likely to cause a significant
dissipation of the institution's assets or earnings.
(ii) Divestiture by parent company of nondepository affiliate
Requiring any company having control of the institution to
divest itself of or liquidate any affiliate other than an
insured depository institution if the appropriate Federal
banking agency for that company determines that the affiliate
is in danger of becoming insolvent and poses a significant
risk to the institution, or is likely to cause a significant
dissipation of the institution's assets or earnings.
(iii) Divestiture of institution
Requiring any company having control of the institution to
divest itself of the institution if the appropriate Federal
banking agency for that company determines that divestiture
would improve the institution's financial condition and
future prospects.
(J) Requiring other action
Requiring the institution to take any other action that the
agency determines will better carry out the purpose of this
section than any of the actions described in this paragraph.
(3) Presumption in favor of certain actions
In complying with paragraph (2), the agency shall take the
following actions, unless the agency determines that the actions
would not further the purpose of this section:
(A) The action described in clause (i) or (iii) of paragraph
(2)(A) (relating to requiring the sale of shares or
obligations, or requiring the institution to be acquired by or
combine with another institution).
(B) The action described in paragraph (2)(B)(i) (relating to
restricting transactions with affiliates).
(C) The action described in paragraph (2)(C) (relating to
restricting interest rates).
(4) Senior executive officers' compensation restricted
(A) In general
The insured depository institution shall not do any of the
following without the prior written approval of the appropriate
Federal banking agency:
(i) Pay any bonus to any senior executive officer.
(ii) Provide compensation to any senior executive officer
at a rate exceeding that officer's average rate of
compensation (excluding bonuses, stock options, and profit-
sharing) during the 12 calendar months preceding the
calendar month in which the institution became
undercapitalized.
(B) Failing to submit plan
The appropriate Federal banking agency shall not grant any
approval under subparagraph (A) with respect to an institution
that has failed to submit an acceptable capital restoration
plan.
(5) Discretion to impose certain additional restrictions
The agency may impose 1 or more of the restrictions prescribed
by regulation under subsection (i) of this section if the agency
determines that those restrictions are necessary to carry out the
purpose of this section.
(6) Consultation with other regulators
Before the agency or Corporation makes a determination under
paragraph (2)(I) with respect to an affiliate that is a broker,
dealer, government securities broker, government securities
dealer, investment company, or investment adviser, the agency or
Corporation shall consult with the Securities and Exchange
Commission and, in the case of any other affiliate which is
subject to any financial responsibility or capital requirement,
any other appropriate regulator of such affiliate with respect to
the proposed determination of the agency or the Corporation and
actions pursuant to such determination.
(g) More stringent treatment based on other supervisory criteria
(1) In general
If the appropriate Federal banking agency determines (after
notice and an opportunity for hearing) that an insured depository
institution is in an unsafe or unsound condition or, pursuant to
section 1818(b)(8) of this title, deems the institution to be
engaging in an unsafe or unsound practice, the agency may -
(A) if the institution is well capitalized, reclassify the
institution as adequately capitalized;
(B) if the institution is adequately capitalized (but not
well capitalized), require the institution to comply with 1 or
more provisions of subsections (d) and (e) of this section, as
if the institution were undercapitalized; or
(C) if the institution is undercapitalized, take any 1 or
more actions authorized under subsection (f)(2) of this section
as if the institution were significantly undercapitalized.
(2) Contents of plan
Any plan required under paragraph (1) shall specify the steps
that the insured depository institution will take to correct the
unsafe or unsound condition or practice. Capital restoration
plans shall not be required under paragraph (1)(B).
(h) Provisions applicable to critically undercapitalized
institutions
(1) Activities restricted
Any critically undercapitalized insured depository institution
shall comply with restrictions prescribed by the Corporation
under subsection (i) of this section.
(2) Payments on subordinated debt prohibited
(A) In general
A critically undercapitalized insured depository institution
shall not, beginning 60 days after becoming critically
undercapitalized, make any payment of principal or interest on
the institution's subordinated debt.
(B) Exceptions
The Corporation may make exceptions to subparagraph (A) if -
(i) the appropriate Federal banking agency has taken action
with respect to the insured depository institution under
paragraph (3)(A)(ii); and
(ii) the Corporation determines that the exception would
further the purpose of this section.
(C) Limited exemption for certain subordinated debt
Until July 15, 1996, subparagraph (A) shall not apply with
respect to any subordinated debt outstanding on July 15, 1991,
and not extended or otherwise renegotiated after July 15, 1991.
(D) Accrual of interest
Subparagraph (A) does not prevent unpaid interest from
accruing on subordinated debt under the terms of that debt, to
the extent otherwise permitted by law.
(3) Conservatorship, receivership, or other action required
(A) In general
The appropriate Federal banking agency shall, not later than
90 days after an insured depository institution becomes
critically undercapitalized -
(i) appoint a receiver (or, with the concurrence of the
Corporation, a conservator) for the institution; or
(ii) take such other action as the agency determines, with
the concurrence of the Corporation, would better achieve the
purpose of this section, after documenting why the action
would better achieve that purpose.
(B) Periodic redeterminations required
Any determination by an appropriate Federal banking agency
under subparagraph (A)(ii) to take any action with respect to
an insured depository institution in lieu of appointing a
conservator or receiver shall cease to be effective not later
than the end of the 90-day period beginning on the date that
the determination is made and a conservator or receiver shall
be appointed for that institution under subparagraph (A)(i)
unless the agency makes a new determination under subparagraph
(A)(ii) at the end of the effective period of the prior
determination.
(C) Appointment of receiver required if other action fails to
restore capital
(i) In general
Notwithstanding subparagraphs (A) and (B), the appropriate
Federal banking agency shall appoint a receiver for the
insured depository institution if the institution is
critically undercapitalized on average during the calendar
quarter beginning 270 days after the date on which the
institution became critically undercapitalized.
(ii) Exception
Notwithstanding clause (i), the appropriate Federal banking
agency may continue to take such other action as the agency
determines to be appropriate in lieu of such appointment if -

(I) the agency determines, with the concurrence of the
Corporation, that (aa) the insured depository institution
has positive net worth, (bb) the insured depository
institution has been in substantial compliance with an
approved capital restoration plan which requires consistent
improvement in the institution's capital since the date of
the approval of the plan, (cc) the insured depository
institution is profitable or has an upward trend in
earnings the agency projects as sustainable, and (dd) the
insured depository institution is reducing the ratio of
nonperforming loans to total loans; and
(II) the head of the appropriate Federal banking agency
and the Chairperson of the Board of Directors both certify
that the institution is viable and not expected to fail.
(i) Restricting activities of critically undercapitalized
institutions
To carry out the purpose of this section, the Corporation shall,
by regulation or order -
(1) restrict the activities of any critically undercapitalized
insured depository institution; and
(2) at a minimum, prohibit any such institution from doing any
of the following without the Corporation's prior written
approval:
(A) Entering into any material transaction other than in the
usual course of business, including any investment, expansion,
acquisition, sale of assets, or other similar action with
respect to which the depository institution is required to
provide notice to the appropriate Federal banking agency.
(B) Extending credit for any highly leveraged transaction.
(C) Amending the institution's charter or bylaws, except to
the extent necessary to carry out any other requirement of any
law, regulation, or order.
(D) Making any material change in accounting methods.
(E) Engaging in any covered transaction (as defined in
section 371c(b) of this title).
(F) Paying excessive compensation or bonuses.
(G) Paying interest on new or renewed liabilities at a rate
that would increase the institution's weighted average cost of
funds to a level significantly exceeding the prevailing rates
of interest on insured deposits in the institution's normal
market areas.
(j) Certain Government-controlled institutions exempted
Subsections (e) through (i) of this section (other than paragraph
(3) of subsection (e) of this section) shall not apply -
(1) to an insured depository institution for which the
Corporation or the Resolution Trust Corporation is conservator;
or
(2) to a bridge bank, none of the voting securities of which
are owned by a person or agency other than the Corporation or the
Resolution Trust Corporation.
(k) Review required when Deposit Insurance Fund incurs material
loss
(1) In general
If the Deposit Insurance Fund incurs a material loss with
respect to an insured depository institution on or after July 1,
1993, the inspector general of the appropriate Federal banking
agency shall -
(A) make a written report to that agency reviewing the
agency's supervision of the institution (including the agency's
implementation of this section), which shall -
(i) ascertain why the institution's problems resulted in a
material loss to the Deposit Insurance Fund; and
(ii) make recommendations for preventing any such loss in
the future; and
(B) provide a copy of the report to -
(i) the Comptroller General of the United States;
(ii) the Corporation (if the agency is not the
Corporation);
(iii) in the case of a State depository institution, the
appropriate State banking supervisor; and
(iv) upon request by any Member of Congress, to that
Member.
(2) Material loss incurred
For purposes of this subsection:
(A) Loss incurred
The Deposit Insurance Fund incurs a loss with respect to an
insured depository institution -
(i) if the Corporation provides any assistance under
section 1823(c) of this title with respect to that
institution; and -
(I) it is not substantially certain that the assistance
will be fully repaid not later than 24 months after the
date on which the Corporation initiated the assistance; or
(II) the institution ceases to repay the assistance in
accordance with its terms; or
(ii) if the Corporation is appointed receiver of the
institution, and it is or becomes apparent that the present
value of the outlays of the Deposit Insurance Fund with
respect to that institution will exceed the present value of
receivership dividends or other payments on the claims held
by the Corporation.
(B) Material loss
A loss is material if it exceeds the greater of -
(i) $25,000,000; or
(ii) 2 percent of the institution's total assets at the
time the Corporation initiated assistance under section
1823(c) of this title or was appointed receiver.
(3) Deadline for report
The inspector general of the appropriate Federal banking agency
shall comply with paragraph (1) expeditiously, and in any event
(except with respect to paragraph (1)(B)(iv)) as follows:
(A) If the institution is described in paragraph (2)(A)(i),
during the 6-month period beginning on the earlier of -
(i) the date on which the institution ceases to repay
assistance under section 1823(c) of this title in accordance
with its terms, or
(ii) the date on which it becomes apparent that the
assistance will not be fully repaid during the 24-month
period described in paragraph (2)(A)(i).
(B) If the institution is described in paragraph (2)(A)(ii),
during the 6-month period beginning on the date on which it
becomes apparent that the present value of the outlays of the
Deposit Insurance Fund with respect to that institution will
exceed the present value of receivership dividends or other
payments on the claims held by the Corporation.
(4) Public disclosure required
(A) In general
The appropriate Federal banking agency shall disclose the
report upon request under section 552 of title 5 without
excising -
(i) any portion under section 552(b)(5) of that title; or
(ii) any information about the insured depository
institution under paragraph (4) (other than trade secrets) or
paragraph (8) of section 552(b) of that title.
(B) Exception
Subparagraph (A) does not require the agency to disclose the
name of any customer of the insured depository institution
(other than an institution-affiliated party), or information
from which such a person's identity could reasonably be
ascertained.
(5) GAO review
The Comptroller General of the United States shall, under such
conditions as the Comptroller General determines to be
appropriate, review reports made under paragraph (1) and
recommend improvements in the supervision of insured depository
institutions (including the implementation of this section).
(6) Transition rule
During the period beginning on July 1, 1993, and ending on June
30, 1997, a loss incurred by the Corporation with respect to an
insured depository institution -
(A) with respect to which the Corporation initiates
assistance under section 1823(c) of this title during the
period in question, or
(B) for which the Corporation was appointed receiver during
the period in question,
is material for purposes of this subsection only if that loss
exceeds the greater of $25,000,000 or the applicable percentage
of the institution's total assets at that time, set forth in the
following table:
The applicable
For the following period: percentage is:
July 1, 1993-June 30, 1994 7 percent
July 1, 1994-June 30, 1995 5 percent
July 1, 1995-June 30, 1996 4 percent
July 1, 1996-June 30, 1997 3 percent.
(l) Implementation
(1) Regulations and other actions
Each appropriate Federal banking agency shall prescribe such
regulations (in consultation with the other Federal banking
agencies), issue such orders, and take such other actions as are
necessary to carry out this section.
(2) Written determination and concurrence required
Any determination or concurrence by an appropriate Federal
banking agency or the Corporation required under this section
shall be written.
(m) Other authority not affected
This section does not limit any authority of an appropriate
Federal banking agency, the Corporation, or a State to take action
in addition to (but not in derogation of) that required under this
section.
(n) Administrative review of dismissal orders
(1) Timely petition required
A director or senior executive officer dismissed pursuant to an
order under subsection (f)(2)(F)(ii) of this section may obtain
review of that order by filing a written petition for
reinstatement with the appropriate Federal banking agency not
later than 10 days after receiving notice of the dismissal.
(2) Procedure
(A) Hearing required
The agency shall give the petitioner an opportunity to -
(i) submit written materials in support of the petition;
and
(ii) appear, personally or through counsel, before 1 or
more members of the agency or designated employees of the
agency.
(B) Deadline for hearing
The agency shall -
(i) schedule the hearing referred to in subparagraph
(A)(ii) promptly after the petition is filed; and
(ii) hold the hearing not later than 30 days after the
petition is filed, unless the petitioner requests that the
hearing be held at a later time.
(C) Deadline for decision
Not later than 60 days after the date of the hearing, the
agency shall -
(i) by order, grant or deny the petition;
(ii) if the order is adverse to the petitioner, set forth
the basis for the order; and
(iii) notify the petitioner of the order.
(3) Standard for review of dismissal orders
The petitioner shall bear the burden of proving that the
petitioner's continued employment would materially strengthen the
insured depository institution's ability -
(A) to become adequately capitalized, to the extent that the
order is based on the institution's capital level or failure to
submit or implement a capital restoration plan; and
(B) to correct the unsafe or unsound condition or unsafe or
unsound practice, to the extent that the order is based on
subsection (g)(1) of this section.
(o) Transition rules for savings associations
Subsections (e)(2), (f), and (h) of this section shall not apply
before July 1, 1994, to any insured savings association if -
(1) before December 19, 1991 -
(A) the savings association had submitted a plan meeting the
requirements of section 1464(t)(6)(A)(ii) of this title; and
(B) the Director of the Office of Thrift Supervision had
accepted the plan;
(2) the plan remains in effect; and
(3) the savings association remains in compliance with the plan
or is operating under a written agreement with the appropriate
Federal banking agency.