[House Report 115-937]
[From the U.S. Government Publishing Office]
115th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 115-937
======================================================================
STATE INSURANCE REGULATION PRESERVATION ACT
_______
September 12, 2018.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Hensarling, from the Committee on Financial Services, submitted the
following
R E P O R T
[To accompany H.R. 5059]
The Committee on Financial Services, to whom was referred
the bill (H.R. 5059) to amend the Home Owners' Loan Act with
respect to the registration and supervision of insurance
savings and loan holding companies, and for other purposes,
having considered the same, report favorably thereon with an
amendment and recommend that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``State Insurance Regulation
Preservation Act''.
SEC. 2. SUPERVISION OF INSURANCE SAVINGS AND LOAN HOLDING COMPANIES.
(a) Definitions.--Section 10(a)(1) of the Home Owners' Loan Act (12
U.S.C. 1467a(a)(1)) is amended by inserting at the end the following:
``(K) Business of insurance.--The term `business of
insurance' means any activity that is regulated in
accordance with the relevant State insurance law,
including the writing of insurance and the reinsuring
of risks.
``(L) Insurance savings and loan holding company.--
The term `insurance savings and loan holding company'
means--
``(i) a savings and loan holding company with
75 percent or more of its total consolidated
assets in an insurance underwriting company (or
insurance underwriting companies), other than
assets associated with insurance for credit
risk, during the 4 most recent consecutive
quarters, as calculated in accordance with
Generally Accepted Accounting Principles or the
Statutory Accounting Principles in accordance
with State law;
``(ii) a company that--
``(I) was a savings and loan holding
company as of July 21, 2010, and
through date of enactment of this
clause; and
``(II) was not subject to the Basel
III capital regulation promulgated by
the Board of Governors of the Federal
Reserve System and the Comptroller of
the Currency on October 11, 2013 (78
Fed. Reg. 62018), because the savings
and loan holding company held 25
percent or more of its total
consolidated assets in subsidiaries
that are insurance underwriting
companies (other than assets associated
with insurance for credit risk); or
``(iii) a top-tier savings and loan holding
company that--
``(I) was registered as a savings and
loan holding company before July 21,
2010; and
``(II) is a New York not-for-profit
corporation formed for the purpose of
holding the stock of a New York
insurance company.
``(M) Insurance underwriting company.--The term
`insurance underwriting company' means an entity that
is subject to regulation by a State insurance
authority.
``(N) State insurance authority.--The term `State
insurance authority' means the chief insurance
regulatory authority of a State.
``(O) Top-tier savings and loan holding company.--The
term `top-tier savings and loan holding company' means
the ultimate parent company in a savings and loan
holding company structure.''.
(b) Registration.--Section 10(b)(1) of the Home Owners' Loan Act (12
U.S.C. 1467a(b)(1)) is amended by inserting at the end the following
new sentence: ``A savings and loan holding company that is an insurance
savings and loan holding company shall register as an insurance savings
and loan holding company.''.
(c) Reports.--Section 10(b)(2) of the Home Owners' Loan Act (12
U.S.C. 1467a(b)(2)) is amended by adding at the end the following new
subparagraph:
``(D) Insurance savings and loan holding companies.--
The Board, to the fullest extent possible, shall
request reports and other information filed by
insurance savings and loan holding companies with other
Federal or State authorities from such other
authorities before requesting such reports or
information from insurance savings and loan holding
companies.''.
(d) Books and Records.--Section 10(b)(3) of the Home Owners' Loan Act
(12 U.S.C. 1467a(b)(3)) is amended--
(1) by striking ``Each'' and inserting the following:
``(A) In general.--Each''; and
(2) by inserting at the end the following new subparagraph:
``(B) Insurance savings and loan holding companies.--
The Board, to the fullest extent possible, shall align
any prescribed recordkeeping requirements for insurance
savings and loan holding companies with the
recordkeeping requirements imposed by State insurance
authorities.''.
(e) Examinations.--Section 10(b)(4)(C) of the Home Owners' Loan Act
(12 U.S.C.1467a(b)(4)(C)) is amended--
(1) in clause (i), by striking the word ``and'' at the end;
(2) in clause (ii), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following new clause:
``(iii) Insurance savings and loan holding
companies.--
``(I) Coordination.--The Board, to
the fullest extent possible, shall
conduct examinations of insurance
savings and loan holding companies in
conjunction with other State and
Federal authorities in order to
minimize the potential for duplication
and conflict between the inspections
conducted by the Board and the
examinations conducted by other State
and Federal authorities.
``(II) Scope and frequency.--
Following public notice and comment,
the Board shall establish a schedule
for the frequency and the scope of
examinations of insurance savings and
loan holding companies that is
consistent with the supervisory
framework required by paragraph (7).''.
(f) Supervision.--Section 10(b) of the Home Owners' Loan Act (12
U.S.C. 1467a(b)) is amended by inserting at the end the following new
paragraph:
``(7) Insurance savings and loan holding companies.--
``(A) Tailored supervision.--The Board, by rule,
shall establish a supervisory framework for insurance
savings and loan holding companies that--
``(i) is tailored to the unique risks,
operations, and activities of insurance savings
and loan holding companies; and
``(ii) to the fullest extent possible, and
consistent with the safe and sound operation of
insurance savings and loan holding companies,
does not unnecessarily duplicate the
supervision of insurance underwriting companies
by State insurance authorities.
``(B) Review of supervisory guidance.--Following
public notice and comment, the Board shall review and
revise supervisory policy letters and guidance
applicable to insurance savings and loan holding
companies to ensure that such letters and guidance are
not inconsistent with the supervisory framework
required by this paragraph.''.
SEC. 3. ASSESSMENTS AND FEES FOR INSURANCE SAVINGS AND LOAN HOLDING
COMPANIES.
Section 11(s) of the Federal Reserve Act (12 U.S.C. 248(s)), which
relates to assessments and fees, is amended by inserting at the end the
following new paragraph:
``(4) Excluded assets.--For purposes of paragraph (2)(B), the
total consolidated assets of an insurance savings and loan
holding company, as defined in section 10(a)(1)(L) of the Home
Owners' Loan Act (12 U.S.C. 1467a(a)(1)(L)), shall not include
assets attributable to the business of insurance conducted by
such company or any affiliate of such company, other than
assets associated with insurance for credit risk.''.
SEC. 4. IMPLEMENTATION.
(a) Implementation of Supervisory Framework.--The Board shall
establish the supervisory framework required by section 10(b)(7) of the
Home Owners' Loan Act (12 U.S.C. 1467a(b)(7)), as added by this Act,
within 24 months of the date of enactment of this Act.
(b) Review of Supervisory Guidance.--The Board shall complete the
review of supervisory policy letters and policy guidance required by
section 10(b)(7) of the Home Owners' Loan Act (12 U.S.C. 1467a(b)(7)),
as added by this Act, within 30 months of the date of enactment of this
Act.
(c) Report to Congress.--The Board, no later than 36 months after the
date of enactment of this Act, shall submit a report to the Committee
on Banking, Housing, and Urban Affairs of the Senate and the Committee
on Financial Services of the House of Representatives on the
implementation of this Act.
(d) Board Defined.--As used in this section, the term ``Board'' means
the Board of Governors of the Federal Reserve System.
SEC. 5. RELATIONSHIP TO OTHER LAWS.
This Act and the amendments made by this Act shall not limit any
authority over insurance savings and loan holding companies (as defined
under section 10(a)(1) of the Home Owners' Loan Act) that is provided
by a Federal law other than this Act.
Purpose and Summary
On February 15, 2018, Rep. Keith Rothfus introduced H.R.
5059, the ``State Insurance Regulatory Preservation Act'',
which amends the Home Owners' Loan Act (Pub. L. No. 73-43) to
create a definition for Insurance Savings and Loan Holding
Companies (ISLHCs). The legislation would establish a
regulatory framework that tailors an examination regime for
these ISLHCs and limits the Board of Governors of the Federal
Reserve System's (Federal Reserve) oversight of such companies
so as not to duplicate the examinations of other Federal or
state authorities.
Background and Need for Legislation
The goal of H.R. 5059 is to create a definition for
Insurance Savings and Loan Holding Companies (ISLHCs) that
establishes a regulatory framework that tailors an examination
regime for these ISLHCs and limits the Federal Reserve's
oversight of such companies so as not to duplicate the
examinations of other Federal or state authorities.
ISLHCs are insurance companies that operate savings and
loan associations (S&Ls), also known as thrifts. Many ISLHCs
use their thrift subsidiaries to provide a more extensive suite
of products to their customers.
Despite the fact that the Dodd-Frank Wall Street Reform and
Consumer Protection Act (Pub. L. No. 111-203) (herein referred
as the ``Dodd-Frank Act'') reaffirmed the state-based model of
insurance regulation, the bill also brought ISLHCs under the
Federal Reserve's supervision for the first time. In Title III
of the Dodd-Frank Act, the Federal Reserve was given all
supervisory and rulemaking authority over insurance companies
that are organized as ISLHCs, which continue to own depository
institutions. Several insurers divested their banking
operations and their SLHC charters after the enactment of the
Dodd-Frank Act.
The Federal Reserve's power as the default ISLHC regulator
spans the entire holding company structure including any
subsidiary (insurance and non-insurance subsidiaries alike),
other than a depository institution, which is regulated by the
Office of the Comptroller of the Currency (OCC). The Dodd-Frank
Act established the Federal Reserve as the ISLHC's consolidated
prudential regulator and day-to-day supervisor with the power
to set capital standards and other prudential requirements,
such as administering stress tests. Federal Reserve supervision
is in addition to the business of insurance regulation by the
state insurance commissioners and regulation of thrift
subsidiaries by the OCC. However, according to the testimony
received from Kurt Bock from COUNTRY Financial, ``the Federal
Reserve has continuously strived to fit insurance groups with
depository institutions into its bank holding company
regulatory system'' and the Federal Reserve has had ``to
consider how to balance the conflicting pressures of banking
regulation--focused on macro-economic stability, holding
company source of strength for depositors and federal deposit
insurance fund protection--with a completely different
insurance business model that does not contribute to systemic
risk and is focused on legal entity regulation for consumer
protection.''
H.R. 5059 follows on legislation enacted into law during
the 113th Congress, the ``Insurance Capital Standards
Clarification Act of 2014'' (Pub. L. No. 113-279), which
provides that, in establishing the minimum leverage and risk-
based capital requirements mandated by Section 171 of the Dodd-
Frank Act, the Federal Reserve is not required to include
(including in any determination of consolidation) entities
regulated by a state or foreign insurance regulator to the
extent such entities act in their capacity as regulated
insurance entities.
The Federal Reserve's supervision of ISLHCs should
complement, rather than supplant, state regulation.
Unfortunately, the Dodd-Frank Act's lack of clarity about the
Federal Reserve's authority has led to regulatory inefficiency,
duplication of effort, and higher compliance costs. H.R. 5059
ensures that ISLHCs that meet both state and federal capital
standards are supervised day-to-day by their state regulators
by right-sizing federal regulation of savings and loan holding
companies with insurance entities. As Nationwide noted at the
March 7, 2018, Subcommittee hearing to consider the legislation
that the Federal Reserve ``has not appropriately tailored its
supervisory framework for these institutions to account for the
fact that they are already subject to extensive group-wide
supervision by the state insurance departments.''
H.R. 5059 also clarifies that state regulators should
assume the lead on the day-to-day supervision of these
insurance companies. The OCC will retain supervisory authority
over thrift subsidiaries. The Federal Reserve will retain
authority to tailor the supervision of ISLHCs to the unique
risks, operations, and activities of companies and to ensure
that, consistent with safety and soundness, the supervision of
ISLHCs does not unnecessarily duplicate or conflict with the
supervision of such companies by State insurance authorities.
H.R. 5059 provides for a complementary relationship between
insurance companies, their state regulators, the OCC, and the
Federal Reserve, which would reduce regulatory inefficiency,
duplication of effort, and unnecessarily higher compliance
costs by utilizing proven effective state-based insurance
regulation.
Hearings
The Committee on Financial Services, Housing and Insurance
Subcommittee, held a hearing examining matters relating to H.R.
5059 on March 7, 2018.
Committee Consideration
The Committee on Financial Services met in open session on
July 24, 2018, and ordered H.R. 5059 to be reported favorably
to the House as amended by voice vote, a quorum being present.
Before the motion to report was offered, the Committee adopted
an amendment in the nature of a substitute offered by Mr.
Rothfus by voice vote.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto.
There are no record votes.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.
New Budget Authority, Entitlement Authority, and Tax Expenditures
The Committee has not received an estimate of new budget
authority contained in the cost estimate prepared by the
Director of the Congressional Budget Office pursuant to Sec.
402 of the Congressional Budget Act of 1974. In compliance with
clause 3(c)(2) of rule XIII of the Rules of the House, the
Committee opines that H.R. 5059 will not establish any new
budget or entitlement authority or create any tax expenditures.
Congressional Budget Office Estimates
The cost estimate prepared by the Director of the
Congressional Budget Office pursuant to Sec. 402 of the
Congressional Budget Act of 1974 was not submitted timely to
the Committee.
Federal Mandates Statement
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995.
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of the section
102(b)(3) of the Congressional Accountability Act.
Earmark Identification
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
Duplication Of Federal Programs
In compliance with clause 3(c)(5) of rule XIII of the Rules
of the House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes: (1) a
program of the Federal Government known to be duplicative of
another Federal program; (2) a program included in any report
from the Government Accountability Office to Congress pursuant
to section 21 of Public Law 111-139; or (3) a program related
to a program identified in the most recent Catalog of Federal
Domestic Assistance, published pursuant to the Federal Program
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
Disclosure of Directed Rulemaking
Pursuant to section 3(i) of H. Res. 5, (115th Congress),
the following statement is made concerning directed rule
makings: The Committee estimates that the bill requires no
directed rule makings within the meaning of such section.
However, in issuing any regulation, order, or supervisory
guidance applicable to an insurance savings and loan holding
company, including a regulation, order, or guidance related to
capital, stress testing, and cybersecurity, the legislation
requires the Board of Governors of the Federal Reserve System
to tailor such regulation, order, or guidance to the risks and
activities of the business of insurance and shall consult with
State insurance authorities to ensure that the regulation,
order, or guidance does not duplicate or conflict with State
insurance requirements.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This section titles the bill as the ``State Insurance
Regulatory Preservation Act.''
Section 2. Supervision of insurance savings and loan holding companies
Section 2 amends section 10 of HOLA to provide for the
registration of insurance savings and loan holding companies
and for the tailoring of the supervision of such companies in
order to minimize the potential for overlap and conflict with
the supervision of such companies by State insurance
authorities.
Subsection (a) amends section 10 of HOLA to insert several
new definitions in HOLA related to the provisions of the State
Insurance Regulation Preservation Act. These definitions
include: (1) a definition of the ``business of insurance,''
that reflects input from the Federal Reserve Board; (2) a
definition of an ``insurance savings and loan holding
company,'' which identifies the savings and loan holding
companies subject to the provisions of the State Insurance
Regulation Preservation Act; (3) a definition of an ``insurance
underwriting company;'' (4) a definition of the term ``State
insurance authority;'' and (5) a definition of the term ``top-
tier savings and loan holding company.''
Subsection (b) amends section 10 of HOLA to require a
savings and loan holding company that meets the definition of
an insurance savings and loan holding company to register with
the Federal Reserve Board as an insurance savings and loan
holding company.
Subsection (c) amends section 10 of HOLA to modify
reporting requirements for a savings and loan holding company
that is registered as an insurance savings and loan holding
company. The subsection provides that in the event an insurance
savings and loan holding company has filed a report or other
information with another Federal or State authority, the
Federal Reserve Board must request that report or information
from the other authority before requesting the report of
information from the company.
Subsection (d) amends section 10 of HOLA to require that
any recordkeeping requirements imposed by the Federal Reserve
Board on a savings and loan holding company that is registered
as an insurance savings and loan holding company must be
aligned with the recordkeeping requirements imposed on the
company by State insurance authorities. This provision avoids a
potential conflict between recordkeeping requirements imposed
by the Board on an insurance savings and loan holding company
and those imposed by a State insurance authority.
Subsection (e) amends section 10 of HOLA to require that
examinations of registered insurance savings and loan holding
companies that are conducted by the Federal Reserve Board be
conducted, to the fullest extent possible, in conjunction with
other State and federal authorities. This provision is intended
to minimize the potential for duplication and conflict in
examinations of insurance savings and loan holding companies.
The subsection also requires the Federal Reserve Board to
establish a schedule for conducting examinations of insurance
savings and loan holding companies that is tailored to the
unique risks, operations, and activities of registered
insurance savings and loan holding companies and that does not
duplicate or conflict with the supervision of such companies by
State insurance authorities.
Subsection (f) amends section 10 of HOLA to require the
Federal Reserve Board to tailor the supervision of registered
insurance savings and loan holding companies to the unique
risks, operations, and activities of companies and to ensure
that, consistent with safety and soundness, the supervision of
registered insurance savings and loan holding companies does
not unnecessarily duplicate or conflict with the supervision of
such companies by State insurance authorities. This subsection
also directs the Federal Reserve Board to review existing
supervisory guidance applicable to insurance savings and loan
holding companies and ensure that such guidance is
appropriately tailored to the unique risks, operations, and
activities of companies and does not duplicate or conflict with
the supervision of such companies by State insurance
authorities.
Section 3. Assessments and fees for insurance savings and loan holding
companies
Section 3 amends section 11 of the Federal Reserve Act
(Pub. L. No. 63-43) to address the methodology for calculating
the assessments the Federal Reserve Board charges an insurance
savings and loan holding company for supervision. The
subsection provides that the assessment be based upon the
company's non-insurance assets, since the company's insurance
assets are otherwise subject to supervision by State insurance
authorities.
Section 4. State regulation of the business of insurance
Section 4 reaffirms federal policy granting States primary
authority over the business of insurance that was established
in the McCarran-Ferguson Act of 1945 (Pub. L. No. 79-15).
Section 5. Implementation
Section 5 establishes a schedule for implementing the
provisions of the State Insurance Regulation Preservation Act.
Subsection (a) directs the Federal Reserve Board to
implement the tailored supervision of insurance savings and
loan holding companies within 24 months of the date of
enactment of the State Insurance Regulation Preservation Act.
Subsection (b) directs the Federal Reserve Board to
complete the review of supervisory guidance applicable to
insurance savings and loan holding companies within 30 months
of the date of enactment.
Subsection (c) directs the Federal Reserve Board to report
to Congress on the implementation of the State Insurance
Regulation Preservation Act within 36 months of the date of
enactment.
Subsection (d) provides that the term ``Board'', as it is
used in the subsection means the Board of Governors of the
Federal Reserve System.
Section 6. Relationship to other laws
Section 6 stipulates that the Act does not limit any
authority over insurance savings and loan holding companies
that is provided by federal law other than the Act.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
HOME OWNERS' LOAN ACT
* * * * * * *
SEC. 10. REGULATION OF HOLDING COMPANIES.
(a) Definitions.--
(1) In general.--As used in this section, unless the
context otherwise requires--
(A) Savings association.--The term ``savings
association'' includes a savings bank or
cooperative bank which is deemed by the
appropriate Federal banking agency to be a
savings association under subsection (l).
(B) Uninsured institution.--The term
``uninsured institution'' means any depository
institution the deposits of which are not
insured by the Federal Deposit Insurance
Corporation.
(C) Company.--The term ``company'' means any
corporation, partnership, trust, joint-stock
company, or similar organization, but does not
include the Federal Deposit Insurance
Corporation, the Resolution Trust Corporation,
any Federal home loan bank, or any company the
majority of the shares of which is owned by the
United States or any State, or by an
instrumentality of the United States or any
State.
(D) Savings and loan holding company.--
(i) In general.--Except as provided
in clause (ii), the term ``savings and
loan holding company'' means any
company that directly or indirectly
controls a savings association or that
controls any other company that is a
savings and loan holding company.
(ii) Exclusion.--The term ``savings
and loan holding company'' does not
include--
(I) a bank holding company
that is registered under, and
subject to, the Bank Holding
Company Act of 1956 (12 U.S.C.
1841 et seq.), or to any
company directly or indirectly
controlled by such company
(other than a savings
association);
(II) a company that controls
a savings association that
functions solely in a trust or
fiduciary capacity as described
in section 2(c)(2)(D) of the
Bank Holding Company Act of
1956 (12 U.S.C. 1841(c)(2)(D));
or
(III) a company described in
subsection (c)(9)(C) solely by
virtue of such company's
control of an intermediate
holding company established
pursuant to section 10A.
(E) Multiple savings and loan holding
company.--The term ``multiple savings and loan
holding company'' means any savings and loan
holding company which directly or indirectly
controls 2 or more savings associations.
(F) Diversified savings and loan holding
company.--The term ``diversified savings and
loan holding company'' means any savings and
loan holding company whose subsidiary savings
association and related activities as permitted
under paragraph (2) of subsection (c) of this
section represented, on either an actual or a
pro forma basis, less than 50 percent of its
consolidated net worth at the close of its
preceding fiscal year and of its consolidated
net earnings for such fiscal year, as
determined in accordance with regulations
issued by the appropriate Federal banking
agency.
(G) Subsidiary.--The term ``subsidiary'' has
the same meaning as in section 3 of the Federal
Deposit Insurance Act.
(H) Affiliate.--The term ``affiliate'' of a
savings association means any person which
controls, is controlled by, or is under common
control with, such savings association.
(I) Bank holding company.--The terms ``bank
holding company'' and ``bank'' have the
meanings given to such terms in section 2 of
the Bank Holding Company Act of 1956.
(J) Acquire.--The term ``acquire'' has the
meaning given to such term in section 13(f)(8)
of the Federal Deposit Insurance Act.
(K) Business of insurance.--The term
``business of insurance'' means any activity
that is regulated in accordance with the
relevant State insurance law, including the
writing of insurance and the reinsuring of
risks.
(L) Insurance savings and loan holding
company.--The term ``insurance savings and loan
holding company'' means--
(i) a savings and loan holding
company with 75 percent or more of its
total consolidated assets in an
insurance underwriting company (or
insurance underwriting companies),
other than assets associated with
insurance for credit risk, during the 4
most recent consecutive quarters, as
calculated in accordance with Generally
Accepted Accounting Principles or the
Statutory Accounting Principles in
accordance with State law;
(ii) a company that--
(I) was a savings and loan
holding company as of July 21,
2010, and through date of
enactment of this clause; and
(II) was not subject to the
Basel III capital regulation
promulgated by the Board of
Governors of the Federal
Reserve System and the
Comptroller of the Currency on
October 11, 2013 (78 Fed. Reg.
62018), because the savings and
loan holding company held 25
percent or more of its total
consolidated assets in
subsidiaries that are insurance
underwriting companies (other
than assets associated with
insurance for credit risk); or
(iii) a top-tier savings and loan
holding company that--
(I) was registered as a
savings and loan holding
company before July 21, 2010;
and
(II) is a New York not-for-
profit corporation formed for
the purpose of holding the
stock of a New York insurance
company.
(M) Insurance underwriting company.--The term
``insurance underwriting company'' means an
entity that is subject to regulation by a State
insurance authority.
(N) State insurance authority.--The term
``State insurance authority'' means the chief
insurance regulatory authority of a State.
(O) Top-tier savings and loan holding
company.--The term ``top-tier savings and loan
holding company'' means the ultimate parent
company in a savings and loan holding company
structure.
(2) Control.--For purposes of this section, a person
shall be deemed to have control of--
(A) a savings association if the person
directly or indirectly or acting in concert
with one or more other persons, or through one
or more subsidiaries, owns, controls, or holds
with power to vote, or holds proxies
representing, more than 25 percent of the
voting shares of such savings association, or
controls in any manner the election of a
majority of the directors of such association;
(B) any other company if the person directly
or indirectly or acting in concert with one or
more other persons, or through one or more
subsidiaries, owns, controls, or holds with
power to vote, or holds proxies representing,
more than 25 percent of the voting shares or
rights of such other company, or controls in
any manner the election or appointment of a
majority of the directors or trustees of such
other company, or is a general partner in or
has contributed more than 25 percent of the
capital of such other company;
(C) a trust if the person is a trustee
thereof; or
(D) a savings association or any other
company if the Board determines, after
reasonable notice and opportunity for hearing,
that such person directly or indirectly
exercises a controlling influence over the
management or policies of such association or
other company.
(3) Exclusions.--Notwithstanding any other provision
of this subsection, the term ``savings and loan holding
company'' does not include--
(A) any company by virtue of its ownership or
control of voting shares of a savings
association or a savings and loan holding
company acquired in connection with the
underwriting of securities if such shares are
held only for such period of time (not
exceeding 120 days unless extended by the
Board) as will permit the sale thereof on a
reasonable basis; and
(B) any trust (other than a pension, profit-
sharing, shareholders', voting, or business
trust) which controls a savings association or
a savings and loan holding company if such
trust by its terms must terminate within 25
years or not later than 21 years and 10 months
after the death of individuals living on the
effective date of the trust, and is (i) in
existence on June 26, 1967, or (ii) a
testamentary trust created on or after June 26,
1967.
(4) Special rule relating to qualified stock
issuance.--No savings and loan holding company shall be
deemed to control a savings association solely by
reason of the purchase by such savings and loan holding
company of shares issued by such savings association,
or issued by any savings and loan holding company
(other than a bank holding company) which controls such
savings association, in connection with a qualified
stock issuance if such purchase is approved by the
Board under subsection (q)(1)(D), unless the acquiring
savings and loan holding company, directly or
indirectly, or acting in concert with 1 or more other
persons, or through 1 or more subsidiaries, owns,
controls, or holds with power to vote, or holds proxies
representing, more than 15 percent of the voting shares
of such savings association or holding company.
(b) Registration and Examination.--
(1) In general.--Within 90 days after becoming a
savings and loan holding company, each savings and loan
holding company shall register with the Board on forms
prescribed by the Board, which shall include such
information, under oath or otherwise, with respect to
the financial condition, ownership, operations,
management, and intercompany relationships of such
holding company and its subsidiaries, and related
matters, as the Board may deem necessary or appropriate
to carry out the purposes of this section. Upon
application, the Board may extend the time within which
a savings and loan holding company shall register and
file the requisite information. A savings and loan
holding company that is an insurance savings and loan
holding company shall register as an insurance savings
and loan holding company.
(2) Reports.--
(A) In general.--Each savings and loan
holding company and each subsidiary thereof,
other than a savings association, shall file
with the Board, such reports as may be required
by the Board. Such reports shall be made under
oath or otherwise, and shall be in such form
and for such periods, as the Board may
prescribe. Each report shall contain such
information concerning the operations of such
savings and loan holding company and its
subsidiaries as the Board may require.
(B) Use of existing reports and other
supervisory information.--The Board shall, to
the fullest extent possible, use--
(i) reports and other supervisory
information that the savings and loan
holding company or any subsidiary
thereof has been required to provide to
other Federal or State regulatory
agencies;
(ii) externally audited financial
statements of the savings and loan
holding company or subsidiary;
(iii) information that is otherwise
available from Federal or State
regulatory agencies; and
(iv) information that is otherwise
required to be reported publicly.
(C) Availability.--Upon the request of the
Board, a savings and loan holding company or a
subsidiary of a savings and loan holding
company shall promptly provide to the Board any
information described in clauses (i) through
(iii) of subparagraph (B).
(D) Insurance savings and loan holding
companies.--The Board, to the fullest extent
possible, shall request reports and other
information filed by insurance savings and loan
holding companies with other Federal or State
authorities from such other authorities before
requesting such reports or information from
insurance savings and loan holding companies.
(3) Books and records.--[Each]
(A) In general._Each savings and loan
holding company shall maintain such books and
records as may be prescribed by the Board.
(B) Insurance savings and loan holding
companies.--The Board, to the fullest extent
possible, shall align any prescribed
recordkeeping requirements for insurance
savings and loan holding companies with the
recordkeeping requirements imposed by State
insurance authorities.
(4) Examinations.--
(A) In general.--Subject to subtitle B of the
Consumer Financial Protection Act of 2010, the
Board may make examinations of a savings and
loan holding company and each subsidiary of a
savings and loan holding company system, in
order to--
(i) inform the Board of--
(I) the nature of the
operations and financial
condition of the savings and
loan holding company and the
subsidiary;
(II) the financial,
operational, and other risks
within the savings and loan
holding company system that may
pose a threat to--
(aa) the safety and
soundness of the
savings and loan
holding company or of
any depository
institution subsidiary
of the savings and loan
holding company; or
(bb) the stability of
the financial system of
the United States; and
(III) the systems of the
savings and loan holding
company for monitoring and
controlling the risks described
in subclause (II); and
(ii) monitor the compliance of the
savings and loan holding company and
the subsidiary with--
(I) this Act;
(II) Federal laws that the
Board has specific jurisdiction
to enforce against the company
or subsidiary; and
(III) other than in the case
of an insured depository
institution or functionally
regulated subsidiary, any other
applicable provisions of
Federal law.
(B) Use of reports to reduce examinations.--
For purposes of this subsection, the Board
shall, to the fullest extent possible, rely
on--
(i) the examination reports made by
other Federal or State regulatory
agencies relating to a savings and loan
holding company and any subsidiary; and
(ii) the reports and other
information required under paragraph
(2).
(C) Coordination with other regulators.--The
Board shall--
(i) provide reasonable notice to, and
consult with, the appropriate Federal
banking agency, the Securities and
Exchange Commission, the Commodity
Futures Trading Commission, or State
regulatory agency, as appropriate, for
a subsidiary that is a depository
institution or a functionally regulated
subsidiary of a savings and loan
holding company before commencing an
examination of the subsidiary under
this section; [and]
(ii) to the fullest extent possible,
avoid duplication of examination
activities, reporting requirements, and
requests for information[.]; and
(iii) Insurance savings and loan
holding companies.--
(I) Coordination.--The Board,
to the fullest extent possible,
shall conduct examinations of
insurance savings and loan
holding companies in
conjunction with other State
and Federal authorities in
order to minimize the potential
for duplication and conflict
between the inspections
conducted by the Board and the
examinations conducted by other
State and Federal authorities.
(II) Scope and frequency.--
Following public notice and
comment, the Board shall
establish a schedule for the
frequency and the scope of
examinations of insurance
savings and loan holding
companies that is consistent
with the supervisory framework
required by paragraph (7).
(5) Agent for service of process.--The Board may
require any savings and loan holding company, or
persons connected therewith if it is not a corporation,
to execute and file a prescribed form of irrevocable
appointment of agent for service of process.
(6) Release from registration.--The Board may at any
time, upon the motion or application of the Board,
release a registered savings and loan holding company
from any registration theretofore made by such company,
if the Board determines that such company no longer has
control of any savings association.
(7) Insurance savings and loan holding companies.--
(A) Tailored supervision.--The Board, by
rule, shall establish a supervisory framework
for insurance savings and loan holding
companies that--
(i) is tailored to the unique risks,
operations, and activities of insurance
savings and loan holding companies; and
(ii) to the fullest extent possible,
and consistent with the safe and sound
operation of insurance savings and loan
holding companies, does not
unnecessarily duplicate the supervision
of insurance underwriting companies by
State insurance authorities.
(B) Review of supervisory guidance.--
Following public notice and comment, the Board
shall review and revise supervisory policy
letters and guidance applicable to insurance
savings and loan holding companies to ensure
that such letters and guidance are not
inconsistent with the supervisory framework
required by this paragraph.
(c) Holding Company Activities.--
(1) Prohibited activities.--Except as otherwise
provided in this subsection, no savings and loan
holding company and no subsidiary which is not a
savings association shall--
(A) engage in any activity or render any
service for or on behalf of a savings
association subsidiary for the purpose or with
the effect of evading any law or regulation
applicable to such savings association;
(B) commence any business activity, other
than the activities described in paragraph (2);
or
(C) continue any business activity, other
than the activities described in paragraph (2),
after the end of the 2-year period beginning on
the date on which such company received
approval under subsection (e) of this section
to become a savings and loan holding company
subject to the limitations contained in this
subparagraph.
(2) Exempt activities.--The prohibitions of
subparagraphs (B) and (C) of paragraph (1) shall not
apply to the following business activities of any
savings and loan holding company or any subsidiary (of
such company) which is not a savings association:
(A) Furnishing or performing management
services for a savings association subsidiary
of such company.
(B) Conducting an insurance agency or escrow
business.
(C) Holding, managing, or liquidating assets
owned or acquired from a savings association
subsidiary of such company.
(D) Holding or managing properties used or
occupied by a savings association subsidiary of
such company.
(E) Acting as trustee under deed of trust.
(F) Any other activity--
(i) which the Board, by regulation,
has determined to be permissible for
bank holding companies under section
4(c) of the Bank Holding Company Act of
1956, unless the Board, by regulation,
prohibits or limits any such activity
for savings and loan holding companies;
or
(ii) in which multiple savings and
loan holding companies were authorized
(by regulation) to directly engage on
March 5, 1987.
(G) In the case of a savings and loan holding
company, purchasing, holding, or disposing of
stock acquired in connection with a qualified
stock issuance if the purchase of such stock by
such savings and loan holding company is
approved by the Board pursuant to subsection
(q)(1)(D).
(H) Any activity that is permissible for a
financial holding company (as such term is
defined under section 2(p) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841(p)) to
conduct under section 4(k) of the Bank Holding
Company Act of 1956 if--
(i) the savings and loan holding
company meets all of the criteria to
qualify as a financial holding company,
and complies with all of the
requirements applicable to a financial
holding company, under sections 4(l)
and 4(m) of the Bank Holding Company
Act and section 804(c) of the Community
Reinvestment Act of 1977 (12 U.S.C.
2903(c)) as if the savings and loan
holding company was a bank holding
company; and
(ii) the savings and loan holding
company conducts the activity in
accordance with the same terms,
conditions, and requirements that apply
to the conduct of such activity by a
bank holding company under the Bank
Holding Company Act of 1956 and the
Board's regulations and interpretations
under such Act.
(3) Certain limitations on activities not applicable
to certain holding companies.--Notwithstanding
paragraphs (4) and (6) of this subsection, the
limitations contained in subparagraphs (B) and (C) of
paragraph (1) shall not apply to any savings and loan
holding company (or any subsidiary of such company)
which controls--
(A) only 1 savings association, if the
savings association subsidiary of such company
is a qualified thrift lender (as determined
under subsection (m)); or
(B) more than 1 savings association, if--
(i) all, or all but 1, of the savings
association subsidiaries of such
company were initially acquired by the
company or by an individual who would
be deemed to control such company if
such individual were a company--
(I) pursuant to an
acquisition under section 13(c)
or 13(k) of the Federal Deposit
Insurance Act or section 408(m)
of the National Housing Act; or
(II) pursuant to an
acquisition in which assistance
was continued to a savings
association under section 13(i)
of the Federal Deposit
Insurance Act; and
(ii) all of the savings association
subsidiaries of such company are
qualified thrift lenders (as determined
under subsection (m)).
(4) Prior approval of certain new activities
required.--
(A) In general.--No savings and loan holding
company and no subsidiary which is not a
savings association shall commence, either de
novo or by an acquisition (in whole or in part)
of a going concern, any activity described in
paragraph (2)(F)(i) of this subsection without
the prior approval of the Board.
(B) Factors to be considered.--In considering
any application under subparagraph (A) by any
savings and loan holding company or any
subsidiary of any such company which is not a
savings association, the Board shall consider--
(i) whether the performance of the
activity described in such application
by the company or the subsidiary can
reasonably be expected to produce
benefits to the public (such as greater
convenience, increased competition, or
gains in efficiency) that outweigh
possible adverse effects of such
activity (such as undue concentration
of resources, decreased or unfair
competition, conflicts of interest, or
unsound financial practices);
(ii) the managerial resources of the
companies involved; and
(iii) the adequacy of the financial
resources, including capital, of the
companies involved.
(C) Director may differentiate between new
and ongoing activities.--In prescribing any
regulation or considering any application under
this paragraph, the Board may differentiate
between activities commenced de novo and
activities commenced by the acquisition, in
whole or in part, of a going concern.
(D) Approval or disapproval by order.--The
approval or disapproval of any application
under this paragraph by the Board shall be made
in an order issued by the Board containing the
reasons for such approval or disapproval.
(5) Grace period to achieve compliance.--If any
savings association referred to in paragraph (3) fails
to maintain the status of such association as a
qualified thrift lender, the Board may allow, for good
cause shown, any company that controls such association
(or any subsidiary of such company which is not a
savings association) up to 3 years to comply with the
limitations contained in paragraph (1)(C).
(6) Special provisions relating to certain companies
affected by 1987 amendments.--
(A) Exception to 2-year grace period for
achieving compliance.--Notwithstanding
paragraph (1)(C), any company which received
approval under subsection (e) of this section
to acquire control of a savings association
between March 5, 1987, and August 10, 1987,
shall not continue any business activity other
than an activity described in paragraph (2)
after August 10, 1987.
(B) Exemption for activities lawfully engaged
in before march 5, 1987.--Notwithstanding
paragraph (1)(C) and subject to subparagraphs
(C) and (D), any savings and loan holding
company which received approval, before March
5, 1987, under subsection (e) of this section
to acquire control of a savings association may
engage, directly or through any subsidiary
(other than a savings association subsidiary of
such company), in any activity in which such
company or such subsidiary was lawfully engaged
on such date.
(C) Termination of subparagraph (b)
exemption.--The exemption provided under
subparagraph (B) for activities engaged in by
any savings and loan holding company or a
subsidiary of such company (which is not a
savings association) which would otherwise be
prohibited under paragraph (1)(C) shall
terminate with respect to such activities of
such company or subsidiary upon the occurrence
(after August 10, 1987) of any of the
following:
(i) The savings and loan holding
company acquires control of a bank or
an additional savings association
(other than a savings association
acquired pursuant to section 13(c) or
13(k) of the Federal Deposit Insurance
Act or section 406(f) or 408(m) of the
National Housing Act).
(ii) Any savings association
subsidiary of the savings and loan
holding company fails to qualify as a
domestic building and loan association
under section 7701(a)(19) of the
Internal Revenue Code of 1986.
(iii) The savings and loan holding
company engages in any business
activity--
(I) which is not described in
paragraph (2); and
(II) in which it was not
engaged on March 5, 1987.
(iv) Any savings association
subsidiary of the savings and loan
holding company increases the number of
locations from which such savings
association conducts business after
March 5, 1987 (other than an increase
which occurs in connection with a
transaction under section 13(c) or (k)
of the Federal Deposit Insurance Act or
section 408(m) of the National Housing
Act.
(v) Any savings association
subsidiary of the savings and loan
holding company permits any overdraft
(including an intraday overdraft), or
incurs any such overdraft in its
account at a Federal Reserve bank, on
behalf of an affiliate, unless such
overdraft is the result of an
inadvertent computer or accounting
error that is beyond the control of
both the savings association subsidiary
and the affiliate.
(D) Order to terminate subparagraph (b)
activity.--Any activity described in
subparagraph (B) may also be terminated by the
Board, after opportunity for hearing, if the
Board determines, having due regard for the
purposes of this Act, that such action is
necessary to prevent conflicts of interest or
unsound practices or is in the public interest.
(7) Foreign savings and loan holding company.--
Notwithstanding any other provision of this section,
any savings and loan holding company organized under
the laws of a foreign country as of June 1, 1984
(including any subsidiary thereof which is not a
savings association), which controls a single savings
association on August 10, 1987, shall not be subject to
this subsection with respect to any activities of such
holding company which are conducted exclusively in a
foreign country.
(8) Exemption for bank holding companies.--Except for
paragraph (1)(A), this subsection shall not apply to
any company that is treated as a bank holding company
for purposes of section 4 of the Bank Holding Company
Act of 1956, or any of its subsidiaries.
(9) Prevention of new affiliations between s&l
holding companies and commercial firms.--
(A) In general.--Notwithstanding paragraph
(3), no company may directly or indirectly,
including through any merger, consolidation, or
other type of business combination, acquire
control of a savings association after May 4,
1999, unless the company is engaged, directly
or indirectly (including through a subsidiary
other than a savings association), only in
activities that are permitted--
(i) under paragraph (1)(C) or (2) of
this subsection; or
(ii) for financial holding companies
under section 4(k) of the Bank Holding
Company Act of 1956.
(B) Prevention of new commercial
affiliations.--Notwithstanding paragraph (3),
no savings and loan holding company may engage
directly or indirectly (including through a
subsidiary other than a savings association) in
any activity other than as described in clauses
(i) and (ii) of subparagraph (A).
(C) Preservation of authority of existing
unitary s&l holding companies.--Subparagraphs
(A) and (B) do not apply with respect to any
company that was a savings and loan holding
company on May 4, 1999, or that becomes a
savings and loan holding company pursuant to an
application pending before the Office on or
before that date, and that--
(i) meets and continues to meet the
requirements of paragraph (3); and
(ii) continues to control not fewer
than 1 savings association that it
controlled on May 4, 1999, or that it
acquired pursuant to an application
pending before the Office on or before
that date, or the successor to such
savings association.
(D) Corporate reorganizations permitted.--
This paragraph does not prevent a transaction
that--
(i) involves solely a company under
common control with a savings and loan
holding company from acquiring,
directly or indirectly, control of the
savings and loan holding company or any
savings association that is already a
subsidiary of the savings and loan
holding company; or
(ii) involves solely a merger,
consolidation, or other type of
business combination as a result of
which a company under common control
with the savings and loan holding
company acquires, directly or
indirectly, control of the savings and
loan holding company or any savings
association that is already a
subsidiary of the savings and loan
holding company.
(E) Authority to prevent evasions.--The Board
may issue interpretations, regulations, or
orders that the Board determines necessary to
administer and carry out the purpose and
prevent evasions of this paragraph, including a
determination (in consultation with the
appropriate Federal banking agency) that,
notwithstanding the form of a transaction, the
transaction would in substance result in a
company acquiring control of a savings
association.
(F) Preservation of authority for family
trusts.--Subparagraphs (A) and (B) do not apply
with respect to any trust that becomes a
savings and loan holding company with respect
to a savings association, if--
(i) not less than 85 percent of the
beneficial ownership interests in the
trust are continuously owned, directly
or indirectly, by or for the benefit of
members of the same family, or their
spouses, who are lineal descendants of
common ancestors who controlled,
directly or indirectly, such savings
association on May 4, 1999, or a
subsequent date, pursuant to an
application pending before the Office
on or before May 4, 1999; and
(ii) at the time at which such trust
becomes a savings and loan holding
company, such ancestors or lineal
descendants, or spouses of such
descendants, have directly or
indirectly controlled the savings
association continuously since May 4,
1999, or a subsequent date, pursuant to
an application pending before the
Office on or before May 4, 1999.
(d) Transactions With Affiliates.--Transactions between any
subsidiary savings association of a savings and loan holding
company and any affiliate (of such savings association
subsidiary) shall be subject to the limitations and
prohibitions specified in section 11 of this Act.
(e) Acquisitions.--
(1) In general.--It shall be unlawful for--
(A) any savings and loan holding company
directly or indirectly, or through one or more
subsidiaries or through one or more
transactions--
(i) to acquire, except with the prior
written approval of the Board, the
control of a savings association or a
savings and loan holding company, or to
retain the control of such an
association or holding company acquired
or retained in violation of this
section as heretofore or hereafter in
effect;
(ii) to acquire, except with the
prior written approval of the Board, by
the process of merger, consolidation,
or purchase of assets, another savings
association or a savings and loan
holding company, or all or
substantially all of the assets of any
such association or holding company;
(iii) to acquire, by purchase or
otherwise, or to retain, except with
the prior written approval of the
Board, more than 5 percent of the
voting shares of a savings association
not a subsidiary, or of a savings and
loan holding company not a subsidiary,
or in the case of a multiple savings
and loan holding company (other than a
company described in subsection
(c)(8)), to acquire or retain, and the
Board may not authorize acquisition or
retention of, more than 5 percent of
the voting shares of any company not a
subsidiary which is engaged in any
business activity other than the
activities specified in subsection
(c)(2). This clause shall not apply to
shares of a savings association or of a
savings and loan holding company--
(I) held as a bona fide
fiduciary (whether with or
without the sole discretion to
vote such shares);
(II) held temporarily
pursuant to an underwriting
commitment in the normal course
of an underwriting business;
(III) held in an account
solely for trading purposes;
(IV) over which no control is
held other than control of
voting rights acquired in the
normal course of a proxy
solicitation;
(V) acquired in securing or
collecting a debt previously
contracted in good faith,
during the 2-year period
beginning on the date of such
acquisition or for such
additional time (not exceeding
3 years) as the Board may
permit if the Board determines
that such an extension will not
be detrimental to the public
interest;
(VI) acquired under section
408(m) of the National Housing
Act or section 13(k) of the
Federal Deposit Insurance Act;
(VII) held by any insurance
company, as defined in section
2(a)(17) of the Investment
Company Act of 1940, except as
provided in paragraph (6); or
(VIII) acquired pursuant to a
qualified stock issuance if
such purchase is approved by
the Board under subsection
(q)(1)(D);
except that the aggregate amount of
shares held under this clause (other
than under subclauses (I), (II), (III),
(IV), and (VI)) may not exceed 15
percent of all outstanding shares or of
the voting power of a savings
association or savings and loan holding
company; or
(iv) to acquire the control of an
uninsured institution, or to retain for
more than one year after February 14,
1968, or from the date on which such
control was acquired, whichever is
later, except that the Board may upon
application by such company extend such
one-year period from year to year, for
an additional period not exceeding 3
years, if the Board finds such
extension is warranted and is not
detrimental to the public interest; and
(B) any other company, without the prior
written approval of the Board, directly or
indirectly, or through one or more subsidiaries
or through one or more transactions, to acquire
the control of one or more savings
associations, except that such approval shall
not be required in connection with the control
of a savings association, (i) acquired by
devise under the terms of a will creating a
trust which is excluded from the definition of
``savings and loan holding company'' under
subsection (a) of this section, (ii) acquired
in connection with a reorganization in which a
person or group of persons, having had control
of a savings association for more than 3 years,
vests control of that association in a newly
formed holding company subject to the control
of the same person or group of persons, or
(iii) acquired by a bank holding company that
is registered under, and subject to, the Bank
Holding Company Act of 1956, or any company
controlled by such bank holding company. The
Board shall approve an acquisition of a savings
association under this subparagraph unless the
Board finds the financial and managerial
resources and future prospects of the company
and association involved to be such that the
acquisition would be detrimental to the
association or the insurance risk of the
Deposit Insurance Fund, and shall render a
decision within 90 days after submission to the
Board of the complete record on the
application.
Consideration of the managerial resources of a company
or savings association under subparagraph (B) shall
include consideration of the competence, experience,
and integrity of the officers, directors, and principal
shareholders of the company or association.
(2) Factors to be considered.--The Board shall not
approve any acquisition under subparagraph (A)(i) or
(A)(ii), or of more than one savings association under
subparagraph (B) of paragraph (1) of this subsection,
any acquisition of stock in connection with a qualified
stock issuance, any acquisition under paragraph (4)(A),
or any transaction under section 13(k) of the Federal
Deposit Insurance Act, except in accordance with this
paragraph. In every case, the Board shall take into
consideration the financial and managerial resources
and future prospects of the company and association
involved, the effect of the acquisition on the
association, the insurance risk to the Deposit
Insurance Fund, and the convenience and needs of the
community to be served, and shall render a decision
within 90 days after submission to the Board of the
complete record on the application. Consideration of
the managerial resources of a company or savings
association shall include consideration of the
competence, experience, and integrity of the officers,
directors, and principal shareholders of the company or
association. Before approving any such acquisition,
except a transaction under section 13(k) of the Federal
Deposit Insurance Act, the Board shall request from the
Attorney General and consider any report rendered
within 30 days on the competitive factors involved. The
Board shall not approve any proposed acquisition--
(A) which would result in a monopoly, or
which would be in furtherance of any
combination or conspiracy to monopolize or to
attempt to monopolize the savings and loan
business in any part of the United States,
(B) the effect of which in any section of the
country may be substantially to lessen
competition, or tend to create a monopoly, or
which in any other manner would be in restraint
of trade, unless it finds that the
anticompetitive effects of the proposed
acquisition are clearly outweighed in the
public interest by the probable effect of the
acquisition in meeting the convenience and
needs of the community to be served,
(C) if the company fails to provide adequate
assurances to the Board that the company will
make available to the Board such information on
the operations or activities of the company,
and any affiliate of the company, as the Board
determines to be appropriate to determine and
enforce compliance with this Act,
(D) in the case of an application involving a
foreign bank, if the foreign bank is not
subject to comprehensive supervision or
regulation on a consolidated basis by the
appropriate authorities in the bank's home
country, or
(E) in the case of an application by a
savings and loan holding company to acquire an
insured depository institution, if--
(i) the home State of the insured
depository institution is a State other
than the home State of the savings and
loan holding company;
(ii) the applicant (including all
insured depository institutions which
are affiliates of the applicant)
controls, or upon consummation of the
transaction would control, more than 10
percent of the total amount of deposits
of insured depository institutions in
the United States; and
(iii) the acquisition does not
involve an insured depository
institution in default or in danger of
default, or with respect to which the
Federal Deposit Insurance Corporation
provides assistance under section 13 of
the Federal Deposit Insurance Act (12
U.S.C. 1823).
(3) Interstate Acquisitions.--No acquisition shall be
approved by the Board under this subsection which will
result in the formation by any company, through one or
more subsidiaries or through one or more transactions,
of a multiple savings and loan holding company
controlling savings associations in more than one
State, unless--
(A) such company, or a savings association
subsidiary of such company, is authorized to
acquire control of a savings association
subsidiary, or to operate a home or branch
office, in the additional State or States
pursuant to section 13(k) of the Federal
Deposit Insurance Act;
(B) such company controls a savings
association subsidiary which operated a home or
branch office in the additional State or States
as of March 5, 1987; or
(C) the statutes of the State in which the
savings association to be acquired is located
permit a savings association chartered by such
State to be acquired by a savings association
chartered by the State where the acquiring
savings association or savings and loan holding
company is located or by a holding company that
controls such a State chartered savings
association, and such statutes specifically
authorize such an acquisition by language to
that effect and not merely by implication.
(4) Acquisitions by certain individuals.--
(A) In general.--Notwithstanding subsection
(h)(2), any director or officer of a savings
and loan holding company, or any individual who
owns, controls, or holds with power to vote (or
holds proxies representing) more than 25
percent of the voting shares of such holding
company, may acquire control of any savings
association not a subsidiary of such savings
and loan holding company with the prior written
approval of the Board.
(B) Treatment of certain holding companies.--
If any individual referred to in subparagraph
(A) controls more than 1 savings and loan
holding company or more than 1 savings
association, any savings and loan holding
company controlled by such individual shall be
subject to the activities limitations contained
in subsection (c) to the same extent such
limitations apply to multiple savings and loan
holding companies, unless all or all but 1 of
the savings associations (including any
institution deemed to be a savings association
under subsection (l) of this section)
controlled directly or indirectly by such
individual was acquired pursuant to an
acquisition described in subclause (I) or (II)
of subsection (c)(3)(B)(i).
(5) Acquisitions pursuant to certain security
interests.--This subsection and subsection (c)(2) of
this section do not apply to any savings and loan
holding company which acquired the control of a savings
association or of a savings and loan holding company
pursuant to a pledge or hypothecation to secure a loan,
or in connection with the liquidation of a loan, made
in the ordinary course of business. It shall be
unlawful for any such company to retain such control
for more than one year after February 14, 1968, or from
the date on which such control was acquired, whichever
is later, except that the Board may upon application by
such company extend such one-year period from year to
year, for an additional period not exceeding 3 years,
if the Board finds such extension is warranted and
would not be detrimental to the public interest.
(6) Shares held by insurance affiliates.--Shares
described in clause (iii)(VII) of paragraph (1)(A)
shall not be excluded for purposes of clause (iii) of
such paragraph if--
(A) all shares held under such clause
(iii)(VII) by all insurance company affiliates
of such savings association or savings and loan
holding company in the aggregate exceed 5
percent of all outstanding shares or of the
voting power of the savings association or
savings and loan holding company; or
(B) such shares are acquired or retained with
a view to acquiring, exercising, or
transferring control of the savings association
or savings and loan holding company.
(7) Definitions.--For purposes of paragraph (2)(E)--
(A) the terms ``default'', ``in danger of
default'', and ``insured depository
institution'' have the same meanings as in
section 3 of the Federal Deposit Insurance Act
(12 U.S.C. 1813); and
(B) the term ``home State'' means--
(i) with respect to a national bank,
the State in which the main office of
the bank is located;
(ii) with respect to a State bank or
State savings association, the State by
which the savings association is
chartered;
(iii) with respect to a Federal
savings association, the State in which
the home office (as defined by the
regulations of the Board of the Office
of Thrift Supervision, or, on and after
the transfer date, the Comptroller of
the Currency) of the Federal savings
association is located; and
(iv) with respect to a savings and
loan holding company, the State in
which the amount of total deposits of
all insured depository institution
subsidiaries of such company was the
greatest on the date on which the
company became a savings and loan
holding company.
(f) Declaration of Dividend.--Every subsidiary savings
association of a savings and loan holding company shall give
the Board not less than 30 days' advance notice of the proposed
declaration by its directors of any dividend on its guaranty,
permanent, or other nonwithdrawable stock. Such notice period
shall commence to run from the date of receipt of such notice
by the Board. Any such dividend declared within such period, or
without the giving of such notice to the Board, shall be
invalid and shall confer no rights or benefits upon the holder
of any such stock.
(g) Administration and Enforcement.--
(1) In general.--The Board is authorized to issue
such regulations and orders, including regulations and
orders relating to capital requirements for savings and
loan holding companies, as the Board deems necessary or
appropriate to enable the Board to administer and carry
out the purposes of this section, and to require
compliance therewith and prevent evasions thereof. In
establishing capital regulations pursuant to this
subsection, the appropriate Federal banking agency
shall seek to make such requirements countercyclical so
that the amount of capital required to be maintained by
a company increases in times of economic expansion and
decreases in times of economic contraction, consistent
with the safety and soundness of the company.
(2) Investigations.--The Board may make such
investigations as the Board deems necessary or
appropriate to determine whether the provisions of this
section, and regulations and orders thereunder, are
being and have been complied with by savings and loan
holding companies and subsidiaries and affiliates
thereof. For the purpose of any investigation under
this section, the Board may administer oaths and
affirmations, issue subpenas, take evidence, and
require the production of any books, papers,
correspondence, memorandums, or other records which may
be relevant or material to the inquiry. The attendance
of witnesses and the production of any such records may
be required from any place in any State. The Board may
apply to the United States district court for the
judicial district (or the United States court in any
territory) in which any witness or company subpenaed
resides or carries on business, for enforcement of any
subpena issued pursuant to this paragraph, and such
courts shall have jurisdiction and power to order and
require compliance.
(3) Proceedings.--(A) In any proceeding under
subsection (a)(2)(D) or under paragraph (5) of this
subsection, the Board may administer oaths and
affirmations, take or cause to be taken depositions,
and issue subpenas. The Board may make regulations with
respect to any such proceedings. The attendance of
witnesses and the production of documents provided for
in this paragraph may be required from any place in any
State or in any territory at any designated place where
such proceeding is being conducted. Any party to such
proceedings may apply to the United States District
Court for the District of Columbia, or the United
States district court for the judicial district or the
United States court in any territory in which such
proceeding is being conducted, or where the witness
resides or carries on business, for enforcement of any
subpena issued pursuant to this paragraph, and such
courts shall have jurisdiction and power to order and
require compliance therewith. Witnesses subpenaed under
this section shall be paid the same fees and mileage
that are paid witnesses in the district courts of the
United States.
(B) Any hearing provided for in subsection (a)(2)(D)
or under paragraph (5) of this section shall be held in
the Federal judicial district or in the territory in
which the principal office of the association or other
company is located unless the party afforded the
hearing consents to another place, and shall be
conducted in accordance with the provisions of chapter
5 of title 5, United States Code.
(4) Injunctions.--Whenever it appears to the Board
that any person is engaged or has engaged or is about
to engage in any acts or practices which constitute or
will constitute a violation of the provisions of this
section or of any regulation or order thereunder, the
Board may bring an action in the proper United States
district court, or the United States court of any
territory or other place subject to the jurisdiction of
the United States, to enjoin such acts or practices, to
enforce compliance with this section or any regulation
or order, or to require the divestiture of any
acquisition in violation of this section, or for any
combination of the foregoing, and such courts shall
have jurisdiction of such actions. Upon a proper
showing an injunction, decree, restraining order, order
of divestiture, or other appropriate order shall be
granted without bond.
(5) Cease and desist orders.--(A) Notwithstanding any
other provision of this section, the Board may,
whenever the Board has reasonable cause to believe that
the continuation by a savings and loan holding company
of any activity or of ownership or control of any of
its noninsured subsidiaries constitutes a serious risk
to the financial safety, soundness, or stability of a
savings and loan holding company's subsidiary savings
association and is inconsistent with the sound
operation of a savings association or with the purposes
of this section or section 8 of the Federal Deposit
Insurance Act, order the savings and loan holding
company or any of its subsidiaries, after due notice
and opportunity for hearing, to terminate such
activities or to terminate (within 120 days or such
longer period as the Board directs in unusual
circumstances) its ownership or control of any such
noninsured subsidiary either by sale or by distribution
of the shares of the subsidiary to the shareholders of
the savings and loan holding company. Such distribution
shall be pro rata with respect to all of the
shareholders of the distributing savings and loan
holding company, and the holding company shall not make
any charge to its shareholders arising out of such a
distribution.
(B) The Board may in the discretion of the Board
apply to the United States district court within the
jurisdiction of which the principal office of the
company is located, for the enforcement of any
effective and outstanding order issued under this
section, and such court shall have jurisdiction and
power to order and require compliance therewith. Except
as provided in subsection (j), no court shall have
jurisdiction to affect by injunction or otherwise the
issuance or enforcement of any notice or order under
this section, or to review, modify, suspend, terminate,
or set aside any such notice or order.
(h) Prohibited Acts.--It shall be unlawful for--
(1) any savings and loan holding company or
subsidiary thereof, or any director, officer, employee,
or person owning, controlling, or holding with power to
vote, or holding proxies representing, more than 25
percent of the voting shares, of such holding company
or subsidiary, to hold, solicit, or exercise any
proxies in respect of any voting rights in a savings
association which is a mutual association;
(2) any director or officer of a savings and loan
holding company, or any individual who owns, controls,
or holds with power to vote (or holds proxies
representing) more than 25 percent of the voting shares
of such holding company, to acquire control of any
savings association not a subsidiary of such savings
and loan holding company, unless such acquisition is
approved by the Board pursuant to subsection (e)(4); or
(3) any individual, except with the prior approval of
the Board, to serve or act as a director, officer, or
trustee of, or become a partner in, any savings and
loan holding company after having been convicted of any
criminal offense involving dishonesty or breach of
trust.
(i) Penalties.--
(1) Criminal penalty.--(A) Whoever knowingly violates
any provision of this section or being a company,
violates any regulation or order issued by the Board
under this section, shall be imprisoned not more than 1
year, fined not more than $100,000 per day for each day
during which the violation continues, or both.
(B) Whoever, with the intent to deceive, defraud, or
profit significantly, knowingly violates any provision
of this section shall be fined not more than $1,000,000
per day for each day during which the violation
continues, imprisoned not more than 5 years, or both.
(2) Civil money penalty.--
(A) Penalty.--Any company which violates, and
any person who participates in a violation of,
any provision of this section, or any
regulation or order issued pursuant thereto,
shall forfeit and pay a civil penalty of not
more than $25,000 for each day during which
such violation continues.
(B) Assessment.--Any penalty imposed under
subparagraph (A) may be assessed and collected
by the Board in the manner provided in
subparagraphs (E), (F), (G), and (I) of section
8(i)(2) of the Federal Deposit Insurance Act
for penalties imposed (under such section) and
any such assessment shall be subject to the
provisions of such section.
(C) Hearing.--The company or other person
against whom any civil penalty is assessed
under this paragraph shall be afforded a
hearing if such company or person submits a
request for such hearing within 20 days after
the issuance of the notice of assessment.
Section 8(h) of the Federal Deposit Insurance
Act shall apply to any proceeding under this
paragraph.
(D) Disbursement.--All penalties collected
under authority of this paragraph shall be
deposited into the Treasury.
(E) Violate defined.--For purposes of this
section, the term ``violate'' includes any
action (alone or with another or others) for or
toward causing, bringing about, participating
in, counseling, or aiding or abetting a
violation.
(F) Regulations.--The Board shall prescribe
regulations establishing such procedures as may
be necessary to carry out this paragraph.
(3) Civil money penalty.--
(A) Penalty.--Any company which violates, and
any person who participates in a violation of,
any provision of this section, or any
regulation or order issued pursuant thereto,
shall forfeit and pay a civil penalty of not
more than $25,000 for each day during which
such violation continues.
(B) Assessment; etc.--Any penalty imposed
under subparagraph (A) may be assessed and
collected by the Board in the manner provided
in subparagraphs (E), (F), (G), and (I) of
section 8(i)(2) of the Federal Deposit
Insurance Act for penalties imposed (under such
section) and any such assessment shall be
subject to the provisions of such section.
(C) Hearing.--The company or other person
against whom any penalty is assessed under this
paragraph shall be afforded an agency hearing
if such company or person submits a request for
such hearing within 20 days after the issuance
of the notice of assessment. Section 8(h) of
the Federal Deposit Insurance Act shall apply
to any proceeding under this paragraph.
(D) Disbursement.--All penalties collected
under authority of this paragraph shall be
deposited into the Treasury.
(E) Violate defined.--For purposes of this
section, the term ``violate'' includes any
action (alone or with another or others) for or
toward causing, bringing about, participating
in, counseling, or aiding or abetting a
violation.
(F) Regulations.--The Board shall prescribe
regulations establishing such procedures as may
be necessary to carry out this paragraph.
(4) Notice under this section after separation from
service.--The resignation, termination of employment or
participation, or separation of an institution-
affiliated party (within the meaning of section 3(u) of
the Federal Deposit Insurance Act) with respect to a
savings and loan holding company or subsidiary thereof
(including a separation caused by the deregistration of
such a company or such a subsidiary) shall not affect
the jurisdiction and authority of the Board to issue
any notice and proceed under this section 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 holding
company or its subsidiary (whether such date occurs
before, on, or after the date of the enactment of this
paragraph).
(j) Judicial Review.--Any party aggrieved by an order of the
Board under this section may obtain a review of such order by
filing in the court of appeals of the United States for the
circuit in which the principal office of such party is located,
or in the United States Court of Appeals for the District of
Columbia Circuit, within 30 days after the date of service of
such order, a written petition praying that the order of the
Board be modified, terminated, or set aside. A copy of the
petition shall be forthwith transmitted by the clerk of the
court to the Board, and thereupon the Board shall file in the
court the record in the proceeding, as provided in section 2112
of title 28, United States Code. Upon the filing of such
petition, such court shall have jurisdiction, which upon the
filing of the record shall be exclusive, to affirm, modify,
terminate, or set aside, in whole or in part, the order of the
Board. Review of such proceedings shall be had as provided in
chapter 7 of title 5, United States Code. The judgment and
decree of the court shall be final, except that the same shall
be subject to review by the Supreme Court upon certiorari as
provided in section 1254 of title 28, United States Code.
(k) Savings Clause.--Nothing contained in this section, other
than any transaction approved under subsection (e)(2) of this
section or section 13 of the Federal Deposit Insurance Act,
shall be interpreted or construed as approving any act, action,
or conduct which is or has been or may be in violation of
existing law, nor shall anything herein contained constitute a
defense to any action, suit, or proceeding pending or hereafter
instituted on account of any act, action, or conduct in
violation of the antitrust laws.
(l) Treatment of FDIC Insured State Savings Banks and
Cooperative Banks as Savings Associations.--
(1) In general.--Notwithstanding any other provision
of law, a savings bank (as defined in section 3(g) of
the Federal Deposit Insurance Act) and a cooperative
bank that is an insured bank (as defined in section
3(h) of the Federal Deposit Insurance Act) upon
application shall be deemed to be a savings association
for the purpose of this section, if the appropriate
Federal banking agency determines that such bank is a
qualified thrift lender (as determined under subsection
(m)).
(2) Failure to maintain qualified thrift lender
status.--If any savings bank which is deemed to be a
savings association under paragraph (1) subsequently
fails to maintain its status as a qualified thrift
lender, as determined by the appropriate Federal
banking agency, such bank may not thereafter be a
qualified thrift lender for a period of 5 years.
(m) Qualified Thrift Lender Test.--
(1) In general.--Except as provided in paragraphs (2)
and (7), any savings association is a qualified thrift
lender if--
(A) the savings association qualifies as a
domestic building and loan association, as such
term is defined in section 7701(a)(19) of the
Internal Revenue Code of 1986; or
(B)(i) the savings association's qualified
thrift investments equal or exceed 65 percent
of the savings association's portfolio assets;
and
(ii) the savings association's qualified
thrift investments continue to equal or exceed
65 percent of the savings association's
portfolio assets on a monthly average basis in
9 out of every 12 months.
(2) Exceptions granted by director.--Notwithstanding
paragraph (1), the appropriate Federal banking agency
may grant such temporary and limited exceptions from
the minimum actual thrift investment percentage
requirement contained in such paragraph as the
appropriate Federal banking agency deems necessary if--
(A) the appropriate Federal banking agency
determines that extraordinary circumstances
exist, such as when the effects of high
interest rates reduce mortgage demand to such a
degree that an insufficient opportunity exists
for a savings association to meet such
investment requirements; or
(B) the appropriate Federal banking agency
determines that--
(i) the grant of any such exception
will significantly facilitate an
acquisition under section 13(c) or
13(k) of the Federal Deposit Insurance
Act;
(ii) the acquired association will
comply with the transition requirements
of paragraph (7)(B), as if the date of
the exemption were the starting date
for the transition period described in
that paragraph; and
(iii) the appropriate Federal banking
agency determines that the exemption
will not have an undue adverse effect
on competing savings associations in
the relevant market and will further
the purposes of this subsection.
(3) Failure to become and remain a qualified thrift
lender.--
(A) In general.--A savings association that
fails to become or remain a qualified thrift
lender shall immediately be subject to the
restrictions under subparagraph (B).
(B) Restrictions applicable to savings
associations that are not qualified thrift
lenders.--
(i) Restrictions effective
immediately.--The following
restrictions shall apply to a savings
association beginning on the date on
which the savings association should
have become or ceases to be a qualified
thrift lender:
(I) Activities.--The savings
association shall not make any
new investment (including an
investment in a subsidiary) or
engage, directly or indirectly,
in any other new activity
unless that investment or
activity would be permissible
for the savings association if
it were a national bank, and is
also permissible for the
savings association as a
savings association.
(II) Branching.--The savings
association shall not establish
any new branch office at any
location at which a national
bank located in the savings
association's home State may
not establish a branch office.
For purposes of this subclause,
a savings association's home
State is the State in which the
savings association's total
deposits were largest on the
date on which the savings
association should have become
or ceased to be a qualified
thrift lender.
(III) Dividends.--The savings
association may not pay
dividends, except for dividends
that--
(aa) would be
permissible for a
national bank;
(bb) are necessary to
meet obligations of a
company that controls
such savings
association; and
(cc) are specifically
approved by the
Comptroller of the
Currency and the Board
after a written request
submitted to the
Comptroller of the
Currency and the Board
by the savings
association not later
than 30 days before the
date of the proposed
payment.
(IV) Regulatory authority.--A
savings association that fails
to become or remain a qualified
thrift lender shall be deemed
to have violated section 5 of
the Home Owners' Loan Act (12
U.S.C. 1464) and subject to
actions authorized by section
5(d) of the Home Owners' Loan
Act (12 U.S.C. 1464(d)).
(ii) Additional restrictions
effective after 3 years.--Beginning 3
years after the date on which a savings
association should have become a
qualified thrift lender, or the date on
which the savings association ceases to
be a qualified thrift lender, as
applicable, the savings association
shall not retain any investment
(including an investment in any
subsidiary) or engage, directly or
indirectly, in any activity, unless
that investment or activity--
(I) would be permissible for
the savings association if it
were a national bank; and
(II) is permissible for the
savings association as a
savings association.
(C) Holding company regulation.--Any company
that controls a savings association that is
subject to any provision of subparagraph (B)
shall, within one year after the date on which
the savings association should have become or
ceases to be a qualified thrift lender,
register as and be deemed to be a bank holding
company subject to all of the provisions of the
Bank Holding Company Act of 1956, section 8 of
the Federal Deposit Insurance Act, and other
statutes applicable to bank holding companies,
in the same manner and to the same extent as if
the company were a bank holding company and the
savings association were a bank, as those terms
are defined in the Bank Holding Company Act of
1956.
(D) Requalification.--A savings association
that should have become or ceases to be a
qualified thrift lender shall not be subject to
subparagraph (B) or (C) if the savings
association becomes a qualified thrift lender
by meeting the qualified thrift lender
requirement in paragraph (1) on a monthly
average basis in 9 out of the preceding 12
months and remains a qualified thrift lender.
If the savings association (or any savings
association that acquired all or substantially
all of its assets from that savings
association) at any time thereafter ceases to
be a qualified thrift lender, it shall
immediately be subject to all provisions of
subparagraphs (B) and (C) as if all the periods
described in subparagraphs (B)(ii) and (C) had
expired.
(E) Exemption for specialized savings
associations serving certain military
personnel.--Subparagraph (A) shall not apply to
a savings association subsidiary of a savings
and loan holding company if at least 90 percent
of the customers of the savings and loan
holding company and its subsidiaries and
affiliates are active or former members in the
United States military services or the widows,
widowers, divorced spouses, or current or
former dependents of such members.
(F) Exemption for certain federal savings
associations.--This paragraph shall not apply
to any Federal savings association in existence
as a Federal savings association on the date of
enactment of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989--
(i) that was chartered before October
15, 1982, as a savings bank or a
cooperative bank under State law; or
(ii) that acquired its principal
assets from an association that was
chartered before October 15, 1982, as a
savings bank or a cooperative bank
under State law.
(G) No circumvention of exit moratorium.--
Subparagraph (A) of this paragraph shall not be
construed as permitting any insured depository
institution to engage in any conversion
transaction prohibited under section 5(d) of
the Federal Deposit Insurance Act.
(4) Definitions.--For purposes of this subsection,
the following definitions shall apply:
(A) Actual thrift investment percentage.--The
term ``actual thrift investment percentage''
means the percentage determined by dividing--
(i) the amount of a savings
association's qualified thrift
investments, by
(ii) the amount of the savings
association's portfolio assets.
(B) Portfolio assets.--The term ``portfolio
assets'' means, with respect to any savings
association, the total assets of the savings
association, minus the sum of--
(i) goodwill and other intangible
assets;
(ii) the value of property used by
the savings association to conduct its
business; and
(iii) liquid assets of the type
required to be maintained under section
6 of the Home Owners' Loan Act, as in
effect on the day before the date of
the enactment of the Financial
Regulatory Relief and Economic
Efficiency Act of 2000, in an amount
not exceeding the amount equal to 20
percent of the savings association's
total assets.
(C) Qualified thrift investments.--
(i) In general.--The term ``qualified
thrift investments'' means, with
respect to any savings association, the
assets of the savings association that
are described in clauses (ii) and
(iii).
(ii) Assets includible without
limit.--The following assets are
described in this clause for purposes
of clause (i):
(I) The aggregate amount of
loans held by the savings
association that were made to
purchase, refinance, construct,
improve, or repair domestic
residential housing or
manufactured housing.
(II) Home-equity loans.
(III) Securities backed by or
representing an interest in
mortgages on domestic
residential housing or
manufactured housing.
(IV) Existing obligations of
deposit insurance agencies.--
Direct or indirect obligations
of the Federal Deposit
Insurance Corporation or the
Federal Savings and Loan
Insurance Corporation issued in
accordance with the terms of
agreements entered into prior
to July 1, 1989, for the 10-
year period beginning on the
date of issuance of such
obligations.
(V) New obligations of
deposit insurance agencies.--
Obligations of the Federal
Deposit Insurance Corporation,
the Federal Savings and Loan
Insurance Corporation, the
FSLIC Resolution Fund, and the
Resolution Trust Corporation
issued in accordance with the
terms of agreements entered
into on or after July 1, 1989,
for the 5-year period beginning
on the date of issuance of such
obligations.
(VI) Shares of stock issued
by any Federal home loan bank.
(VII) Loans for educational
purposes, loans to small
businesses, and loans made
through credit cards or credit
card accounts.
(iii) Assets includible subject to
percentage restriction.--The following
assets are described in this clause for
purposes of clause (i):
(I) 50 percent of the dollar
amount of the residential
mortgage loans originated by
such savings association and
sold within 90 days of
origination.
(II) Investments in the
capital stock or obligations
of, and any other security
issued by, any service
corporation if such service
corporation derives at least 80
percent of its annual gross
revenues from activities
directly related to purchasing,
refinancing, constructing,
improving, or repairing
domestic residential real
estate or manufactured housing.
(III) 200 percent of the
dollar amount of loans and
investments made to acquire,
develop, and construct 1- to 4-
family residences the purchase
price of which is or is
guaranteed to be not greater
than 60 percent of the median
value of comparable newly
constructed 1- to 4-family
residences within the local
community in which such real
estate is located, except that
not more than 25 percent of the
amount included under this
subclause may consist of
commercial properties related
to the development if those
properties are directly related
to providing services to
residents of the development.
(IV) 200 percent of the
dollar amount of loans for the
acquisition or improvement of
residential real property,
churches, schools, and nursing
homes located within, and loans
for any other purpose to any
small businesses located within
any area which has been
identified by the appropriate
Federal banking agency, in
connection with any review or
examination of community
reinvestment practices, as a
geographic area or neighborhood
in which the credit needs of
the low- and moderate-income
residents of such area or
neighborhood are not being
adequately met.
(V) Loans for the purchase or
construction of churches,
schools, nursing homes, and
hospitals, other than those
qualifying under clause (IV),
and loans for the improvement
and upkeep of such properties.
(VI) Loans for personal,
family, or household purposes
(other than loans for personal,
family, or household purposes
described in clause (ii)(VII)).
(VII) Shares of stock issued
by the Federal Home Loan
Mortgage Corporation or the
Federal National Mortgage
Association.
(iv) Percentage restriction
applicable to certain assets.--The
aggregate amount of the assets
described in clause (iii) which may be
taken into account in determining the
amount of the qualified thrift
investments of any savings association
shall not exceed the amount which is
equal to 20 percent of a savings
association's portfolio assets.
(v) The term ``qualified thrift
investments'' excludes--
(I) except for home equity
loans, that portion of any loan
or investment that is used for
any purpose other than those
expressly qualifying under any
subparagraph of clause (ii) or
(iii); or
(II) goodwill or any other
intangible asset.
(D) Credit card.--The appropriate Federal
banking agency shall issue such regulations as
may be necessary to define the term ``credit
card''.
(E) Small business.--The appropriate Federal
banking agency shall issue such regulations as
may be necessary to define the term ``small
business''.
(5) Consistent accounting required.--
(A) In determining the amount of a savings
association's portfolio assets, the assets of
any subsidiary of the savings association shall
be consolidated with the assets of the savings
association if--
(i) Assets of the subsidiary are
consolidated with the assets of the
savings association in determining the
savings association's qualified thrift
investments; or
(ii) Residential mortgage loans
originated by the subsidiary are
included pursuant to paragraph
(4)(C)(iii)(I) in determining the
savings association's qualified thrift
investments.
(B) In determining the amount of a savings
association's portfolio assets and qualified
thrift investments, consistent accounting
principles shall be applied.
(6) Special rules for puerto rico and virgin islands
savings associations.--
(A) Puerto rico savings associations.--With
respect to any savings association
headquartered and operating primarily in Puerto
Rico--
(i) the term ``qualified thrift
investments'' includes, in addition to
the items specified in paragraph (4)--
(I) the aggregate amount of
loans for personal, family,
educational, or household
purposes made to persons
residing or domiciled in the
Commonwealth of Puerto Rico;
and
(II) the aggregate amount of
loans for the acquisition or
improvement of churches,
schools, or nursing homes, and
of loans to small businesses,
located within the Commonwealth
of Puerto Rico; and
(ii) the aggregate amount of loans
related to the purchase, acquisition,
development and construction of 1- to
4-family residential real estate--
(I) which is located within
the Commonwealth of Puerto
Rico; and
(II) the value of which (at
the time of acquisition or upon
completion of the development
and construction) is below the
median value of newly
constructed 1- to 4-family
residences in the Commonwealth
of Puerto Rico, which may be
taken into account in
determining the amount of the
qualified thrift investments
and of such savings association
shall be doubled.
(B) Virgin islands savings associations.--
With respect to any savings association
headquartered and operating primarily in the
Virgin Islands--
(i) the term ``qualified thrift
investments'' includes, in addition to
the items specified in paragraph (4)--
(I) the aggregate amount of
loans for personal, family,
educational, or household
purposes made to persons
residing or domiciled in the
Virgin Islands; and
(II) the aggregate amount of
loans for the acquisition or
improvement of churches,
schools, or nursing homes, and
of loans to small businesses,
located within the Virgin
Islands; and
(ii) the aggregate amount of loans
related to the purchase, acquisition,
development and construction of 1- to
4-family residential real estate--
(I) which is located within
the Virgin Islands; and
(II) the value of which (at
the time of acquisition or upon
completion of the development
and construction) is below the
median value of newly
constructed 1- to 4-family
residences in the Virgin
Islands, which may be taken
into account in determining the
amount of the qualified thrift
investments and of such savings
association shall be doubled.
(7) Transitional rule for certain savings
associations.--
(A) In general.--If any Federal savings
association in existence as a Federal savings
association on the date of enactment of the
Financial Institutions Reform, Recovery, and
Enforcement Act of 1989--
(i) that was chartered as a savings
bank or a cooperative bank under State
law before October 15, 1982; or
(ii) that acquired its principal
assets from an association that was
chartered before October 15, 1982, as a
savings bank or a cooperative bank
under State law,
meets the requirements of subparagraph (B),
such savings association shall be treated as a
qualified thrift lender during the period
ending on September 30, 1995.
(B) Subparagraph (b) requirements.--A savings
association meets the requirements of this
subparagraph if, in the determination of the
appropriate Federal banking agency--
(i) the actual thrift investment
percentage of such association does
not, after the date of enactment of the
Financial Institutions Reform,
Recovery, and Enforcement Act of 1989,
decrease below the actual thrift
investment percentage of such
association on July 15, 1989; and
(ii) the amount by which--
(I) the actual thrift
investment percentage of such
association at the end of each
period described in the
following table, exceeds
(II) the actual thrift
investment percentage of such
association on July 15, 1989,
is equal to or greater than the
applicable percentage (as determined
under the following table) of the
amount by which 70 percent exceeds the
actual thrift investment percentage of
such association on such date of
enactment:
For the following The applicable
period: percentage is:
July 1, 1991-September 30, 1992................. 25 percent
October 1, 1992-March 31, 1994.................. 50 percent
April 1, 1994-September 30, 1995................ 75 percent
Thereafter...................................... 100 percent
(C) For purposes of this paragraph, the
actual thrift investment percentage of an
association on July 15, 1989, shall be
determined by applying the definition of
``actual thrift investment percentage'' that
takes effect on July 1, 1991.
(n) Tying Restrictions.--A savings and loan holding company
and any of its affiliates shall be subject to section 5(q) and
regulations prescribed under such section, in connection with
transactions involving the products or services of such company
or affiliate and those of an affiliated savings association as
if such company or affiliate were a savings association.
(o) Mutual Holding Companies.--
(1) In general.--A savings association operating in
mutual form may reorganize so as to become a holding
company by--
(A) chartering an interim savings
association, the stock of which is to be wholly
owned, except as otherwise provided in this
section, by the mutual association; and
(B) transferring the substantial part of its
assets and liabilities, including all of its
insured liabilities, to the interim savings
association.
(2) Directors and certain account holders' approval
of plan required.--A reorganization is not authorized
under this subsection unless--
(A) a plan providing for such reorganization
has been approved by a majority of the board of
directors of the mutual savings association;
and
(B) in the case of an association in which
holders of accounts and obligors exercise
voting rights, such plan has been submitted to
and approved by a majority of such individuals
at a meeting held at the call of the directors
in accordance with the procedures prescribed by
the association's charter and bylaws.
(3) Notice to the director; disapproval period.--
(A) Notice required.--At least 60 days prior
to taking any action described in paragraph
(1), a savings association seeking to establish
a mutual holding company shall provide written
notice to the Board. The notice shall contain
such relevant information as the Board shall
require by regulation or by specific request in
connection with any particular notice.
(B) Transaction allowed if not disapproved.--
Unless the Board within such 60-day notice
period disapproves the proposed holding company
formation, or extends for another 30 days the
period during which such disapproval may be
issued, the savings association providing such
notice may proceed with the transaction, if the
requirements of paragraph (2) have been met.
(C) Grounds for disapproval.--The Board may
disapprove any proposed holding company
formation only if--
(i) such disapproval is necessary to
prevent unsafe or unsound practices;
(ii) the financial or management
resources of the savings association
involved warrant disapproval;
(iii) the savings association fails
to furnish the information required
under subparagraph (A); or
(iv) the savings association fails to
comply with the requirement of
paragraph (2).
(D) Retention of capital assets.--In
connection with the transaction described in
paragraph (1), a savings association may,
subject to the approval of the Board, retain
capital assets at the holding company level to
the extent that such capital exceeds the
association's capital requirement established
by the Board pursuant to subsections (s) and
(t) of section 5.
(4) Ownership.--
(A) In general.--Persons having ownership
rights in the mutual association pursuant to
section 5(b)(1)(B) of this Act or State law
shall have the same ownership rights with
respect to the mutual holding company.
(B) Holders of certain accounts.--Holders of
savings, demand or other accounts of--
(i) a savings association chartered
as part of a transaction described in
paragraph (1); or
(ii) a mutual savings association
acquired pursuant to paragraph (5)(B),
shall have the same ownership rights with
respect to the mutual holding company as
persons described in subparagraph (A) of this
paragraph.
(5) Permitted activities.--A mutual holding company
may engage only in the following activities:
(A) Investing in the stock of a savings
association.
(B) Acquiring a mutual association through
the merger of such association into a savings
association subsidiary of such holding company
or an interim savings association subsidiary of
such holding company.
(C) Subject to paragraph (6), merging with or
acquiring another holding company, one of whose
subsidiaries is a savings association.
(D) Investing in a corporation the capital
stock of which is available for purchase by a
savings association under Federal law or under
the law of any State where the subsidiary
savings association or associations have their
home offices.
(E) Engaging in the activities described in
subsection (c)(2) or (c)(9)(A)(ii).
(6) Limitations on certain activities of acquired
holding companies.--
(A) New activities.--If a mutual holding
company acquires or merges with another holding
company under paragraph (5)(C), the holding
company acquired or the holding company
resulting from such merger or acquisition may
only invest in assets and engage in activities
which are authorized under paragraph (5).
(B) Grace period for divesting prohibited
assets or discontinuing prohibited
activities.--Not later than 2 years following a
merger or acquisition described in paragraph
(5)(C), the acquired holding company or the
holding company resulting from such merger or
acquisition shall--
(i) dispose of any asset which is an
asset in which a mutual holding company
may not invest under paragraph (5); and
(ii) cease any activity which is an
activity in which a mutual holding
company may not engage under paragraph
(5).
(7) Regulation.--A mutual holding company shall be
chartered by the Board and shall be subject to such
regulations as the Board may prescribe. Unless the
context otherwise requires, a mutual holding company
shall be subject to the other requirements of this
section regarding regulation of holding companies.
(8) Capital improvement.--
(A) Pledge of stock of savings association
subsidiary.--This section shall not prohibit a
mutual holding company from pledging all or a
portion of the stock of a savings association
chartered as part of a transaction described in
paragraph (1) to raise capital for such savings
association.
(B) Issuance of nonvoting shares.--This
section shall not prohibit a savings
association chartered as part of a transaction
described in paragraph (1) from issuing any
nonvoting shares or less than 50 percent of the
voting shares of such association to any person
other than the mutual holding company.
(9) Insolvency and liquidation.--
(A) In general.--Notwithstanding any
provision of law, upon--
(i) the default of any savings
association--
(I) the stock of which is
owned by any mutual holding
company; and
(II) which was chartered in a
transaction described in
paragraph (1);
(ii) the default of a mutual holding
company; or
(iii) a foreclosure on a pledge by a
mutual holding company described in
paragraph (8)(A),
a trustee shall be appointed receiver of such
mutual holding company and such trustee shall
have the authority to liquidate the assets of,
and satisfy the liabilities of, such mutual
holding company pursuant to title 11, United
States Code.
(B) Distribution of net proceeds.--Except as
provided in subparagraph (C), the net proceeds
of any liquidation of any mutual holding
company pursuant to subparagraph (A) shall be
transferred to persons who hold ownership
interests in such mutual holding company.
(C) Recovery by corporation.--If the
Corporation incurs a loss as a result of the
default of any savings association subsidiary
of a mutual holding company which is liquidated
pursuant to subparagraph (A), the Corporation
shall succeed to the ownership interests of the
depositors of such savings association in the
mutual holding company, to the extent of the
Corporation's loss.
(10) Definitions.--For purposes of this subsection--
(A) Mutual holding company.--The term
``mutual holding company'' means a corporation
organized as a holding company under this
subsection.
(B) Mutual association.--The term ``mutual
association'' means a savings association which
is operating in mutual form.
(C) Default.--The term ``default'' means an
adjudication or other official determination of
a court of competent jurisdiction or other
public authority pursuant to which a
conservator, receiver, or other legal custodian
is appointed.
(11) Dividends.--
(A) Declaration of dividends.--
(i) Advance notice required.--Each
subsidiary of a mutual holding company
that is a savings association shall
give the appropriate Federal banking
agency and the Board notice not later
than 30 days before the date of a
proposed declaration by the board of
directors of the savings association of
any dividend on the guaranty,
permanent, or other nonwithdrawable
stock of the savings association.
(ii) Invalid dividends.--Any dividend
described in clause (i) that is
declared without giving notice to the
appropriate Federal banking agency and
the Board under clause (i), or that is
declared during the 30-day period
preceding the date of a proposed
declaration for which notice is given
to the appropriate Federal banking
agency and the Board under clause (i),
shall be invalid and shall confer no
rights or benefits upon the holder of
any such stock.
(B) Waiver of dividends.--A mutual holding
company may waive the right to receive any
dividend declared by a subsidiary of the mutual
holding company, if--
(i) no insider of the mutual holding
company, associate of an insider, or
tax-qualified or non-tax-qualified
employee stock benefit plan of the
mutual holding company holds any share
of the stock in the class of stock to
which the waiver would apply; or
(ii) the mutual holding company gives
written notice to the Board of the
intent of the mutual holding company to
waive the right to receive dividends,
not later than 30 days before the date
of the proposed date of payment of the
dividend, and the Board does not object
to the waiver.
(C) Resolution included in waiver notice.--A
notice of a waiver under subparagraph (B) shall
include a copy of the resolution of the board
of directors of the mutual holding company, in
such form and substance as the Board may
determine, together with any supporting
materials relied upon by the board of directors
of the mutual holding company, concluding that
the proposed dividend waiver is consistent with
the fiduciary duties of the board of directors
to the mutual members of the mutual holding
company.
(D) Standards for waiver of dividend.--The
Board may not object to a waiver of dividends
under subparagraph (B) if--
(i) the waiver would not be
detrimental to the safe and sound
operation of the savings association;
(ii) the board of directors of the
mutual holding company expressly
determines that a waiver of the
dividend by the mutual holding company
is consistent with the fiduciary duties
of the board of directors to the mutual
members of the mutual holding company;
and
(iii) the mutual holding company has,
prior to December 1, 2009--
(I) reorganized into a mutual
holding company under
subsection (o);
(II) issued minority stock
either from its mid-tier stock
holding company or its
subsidiary stock savings
association; and
(III) waived dividends it had
a right to receive from the
subsidiary stock savings
association.
(E) Valuation.--
(i) In general.--The appropriate
Federal banking agency shall consider
waived dividends in determining an
appropriate exchange ratio in the event
of a full conversion to stock form.
(ii) Exception.--In the case of a
savings association that has
reorganized into a mutual holding
company, has issued minority stock from
a mid-tier stock holding company or a
subsidiary stock savings association of
the mutual holding company, and has
waived dividends it had a right to
receive from a subsidiary savings
association before December 1, 2009,
the appropriate Federal banking agency
shall not consider waived dividends in
determining an appropriate exchange
ratio in the event of a full conversion
to stock form.
(p) Holding Company Activities Constituting Serious Risk to
Subsidiary Savings Association.--
(1) Determination and imposition of restrictions.--If
the Board or the appropriate Federal banking agency for
the savings association determines that there is
reasonable cause to believe that the continuation by a
savings and loan holding company of any activity
constitutes a serious risk to the financial safety,
soundness, or stability of a savings and loan holding
company's subsidiary savings association, the Board may
impose such restrictions as the Board, in consultation
with the appropriate Federal banking agency for the
savings association determines to be necessary to
address such risk. Such restrictions shall be issued in
the form of a directive to the holding company and any
of its subsidiaries, limiting--
(A) the payment of dividends by the savings
association;
(B) transactions between the savings
association, the holding company, and the
subsidiaries or affiliates of either; and
(C) any activities of the savings association
that might create a serious risk that the
liabilities of the holding company and its
other affiliates may be imposed on the savings
association.
Such directive shall be effective as a cease and desist
order that has become final.
(2) Review of directive.--
(A) Administrative review.--After a directive
referred to in paragraph (1) is issued, the
savings and loan holding company, or any
subsidiary of such holding company subject to
the directive, may object and present in
writing its reasons why the directive should be
modified or rescinded. Unless within 10 days
after receipt of such response the Board
affirms, modifies, or rescinds the directive,
such directive shall automatically lapse.
(B) Judicial review.--If the Board affirms or
modifies a directive pursuant to subparagraph
(A), any affected party may immediately
thereafter petition the United States district
court for the district in which the savings and
loan holding company has its main office or in
the United States District Court for the
District of Columbia to stay, modify, terminate
or set aside the directive. Upon a showing of
extraordinary cause, the savings and loan
holding company, or any subsidiary of such
holding company subject to a directive, may
petition a United States district court for
relief without first pursuing or exhausting the
administrative remedies set forth in this
paragraph.
(q) Qualified Stock Issuance by Undercapitalized Savings
Associations or Holding Companies.--
(1) In general.--For purposes of this section, any
issue of shares of stock shall be treated as a
qualified stock issuance if the following conditions
are met:
(A) The shares of stock are issued by--
(i) an undercapitalized savings
association; or
(ii) a savings and loan holding
company which is not a bank holding
company but which controls an
undercapitalized savings association
if, at the time of issuance, the
savings and loan holding company is
legally obligated to contribute the net
proceeds from the issuance of such
stock to the capital of an
undercapitalized savings association
subsidiary of such holding company.
(B) All shares of stock issued consist of
previously unissued stock or treasury shares.
(C) All shares of stock issued are purchased
by a savings and loan holding company that is
registered, as of the date of purchase, with
the Board in accordance with the provisions of
subsection (b)(1) of this section.
(D) Subject to paragraph (2), the Board
approved the purchase of the shares of stock by
the acquiring savings and loan holding company.
(E) The entire consideration for the stock
issued is paid in cash by the acquiring savings
and loan holding company.
(F) At the time of the stock issuance, each
savings association subsidiary of the acquiring
savings and loan holding company (other than an
association acquired in a transaction pursuant
to subsection (c) or (k) of section 13 of the
Federal Deposit Insurance Act or section 408(m)
of the National Housing Act) has capital (after
deducting any subordinated debt, intangible
assets, and deferred, unamortized gains or
losses) of not less than 6\1/2\ percent of the
total assets of such savings association.
(G) Immediately after the stock issuance, the
acquiring savings and loan holding company
holds not more than 15 percent of the
outstanding voting stock of the issuing
undercapitalized savings association or savings
and loan holding company.
(H) Not more than one of the directors of the
issuing association or company is an officer,
director, employee, or other representative of
the acquiring company or any of its affiliates.
(I) Transactions between the savings
association or savings and loan holding company
that issues the shares pursuant to this section
and the acquiring company and any of its
affiliates shall be subject to the provisions
of section 11.
(2) Approval of acquisitions.--
(A) Additional capital commitments not
required.--The Board shall not disapprove any
application for the purchase of stock in
connection with a qualified stock issuance on
the grounds that the acquiring savings and loan
holding company has failed to undertake to make
subsequent additional capital contributions to
maintain the capital of the undercapitalized
savings association at or above the minimum
level required by the Board or any other
Federal agency having jurisdiction.
(B) Other conditions.--Notwithstanding
subsection (a)(4), the Board may impose such
conditions on any approval of an application
for the purchase of stock in connection with a
qualified stock issuance as the Board
determines to be appropriate, including--
(i) a requirement that any savings
association subsidiary of the acquiring
savings and loan holding company limit
dividends paid to such holding company
for such period of time as the Board
may require; and
(ii) such other conditions as the
Board deems necessary or appropriate to
prevent evasions of this section.
(C) Application deemed approved if not
disapproved within 90 days.--An application for
approval of a purchase of stock in connection
with a qualified stock issuance shall be deemed
to have been approved by the Board if such
application has not been disapproved by the
Board before the end of the 90-day period
beginning on the date such application has been
deemed sufficient under regulations issued by
the Board.
(3) No limitation on class of stock issued.--The
shares of stock issued in connection with a qualified
stock issuance may be shares of any class.
(4) Undercapitalized savings association defined.--
For purposes of this subsection, the term
``undercapitalized savings association'' means any
savings association--
(A) the assets of which exceed the
liabilities of such association; and
(B) which does not comply with one or more of
the capital standards in effect under section
5(t).
(r) Penalty for Failure To Provide Timely and Accurate
Reports.--
(1) First tier.--Any savings and loan holding
company, and any subsidiary of such holding company,
which--
(A) maintains procedures reasonably adapted
to avoid any inadvertent and unintentional
error and, as a result of such an error--
(i) fails to submit or publish any
report or information required under
this section or regulations prescribed
by the Board or appropriate Federal
banking agency, within the period of
time specified by the Board or
appropriate Federal banking agency; or
(ii) 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 holding company or subsidiary shall have the
burden of proving by a preponderence of the evidence
that an error was inadvertent and unintentional and
that a report was inadvertently transmitted or
published late.
(2) Second tier.--Any savings and loan holding
company, and any subsidiary of such holding company,
which--
(A) fails to submit or publish any report or
information required under this section or
under regulations prescribed by the Board or
appropriate Federal banking agency, within the
period of time specified by the Board or
appropriate Federal banking agency; or
(B) submits or publishes any false or
misleading report or information,
in a manner not described in paragraph (1) 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.
(3) Third tier.--If any savings and loan holding
company or any subsidiary of such a holding company
knowingly or with reckless disregard for the accuracy
of any information or report described in paragraph (2)
submits or publishes any false or misleading report or
information, the Board or appropriate Federal banking
agency may assess a penalty of not more than $1,000,000
or 1 percent of total assets of such company or
subsidiary, whichever is less, per day for each day
during which such failure continues or such false or
misleading information is not corrected.
(4) Assessment.--Any penalty imposed under paragraph
(1), (2), or (3) shall be assessed and collected by the
Board or appropriate Federal banking agency in the
manner provided in subparagraphs (E), (F), (G), and (I)
of section 8(i)(2) of the Federal Deposit Insurance Act
(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 subsection.
(5) Hearing.--Any savings and loan holding company or
any subsidiary of such a holding company against which
any penalty is assessed under this subsection shall be
afforded a hearing if such savings and loan holding
company or such subsidiary, as the case may be, submits
a request for such hearing within 20 days after the
issuance of the notice of assessment. Section 8(h) of
the Federal Deposit Insurance Act shall apply to any
proceeding under this subsection.
(s) Mergers, Consolidations, and Other Acquisitions
Authorized.--
(1) In general.--Subject to sections 5(d)(3) and
18(c) of the Federal Deposit Insurance Act and all
other applicable laws, any Federal savings association
may acquire or be acquired by any insured depository
institution.
(2) Expedited approval of acquisitions.--
(A) In general.--Any application by a savings
association to acquire or be acquired by
another insured depository institution which is
required to be filed with the appropriate
Federal banking agency for the savings
association under any applicable law or
regulation shall be approved or disapproved in
writing by the appropriate Federal banking
agency for the savings association before the
end of the 60-day period beginning on the date
such application is filed with the agency.
(B) Extension of period.--The period for
approval or disapproval referred to in
subparagraph (A) may be extended for an
additional 30-day period if the appropriate
Federal banking agency for the savings
association determines that--
(i) an applicant has not furnished
all of the information required to be
submitted; or
(ii) in the judgment of the
appropriate Federal banking agency for
the savings association, any material
information submitted is substantially
inaccurate or incomplete.
(3) Acquire defined.--For purposes of this
subsection, the term ``acquire'' means to acquire,
directly or indirectly, ownership or control through a
merger or consolidation or an acquisition of assets or
assumption of liabilities, provided that following such
merger, consolidation, or acquisition, an acquiring
insured depository institution may not own the shares
of the acquired insured depository institution.
(4) Regulations.--
(A) Required.--The Comptroller shall
prescribe such regulations as may be necessary
to carry out paragraph (1).
(B) Effective date.--The regulations required
under subparagraph (A) shall--
(i) be prescribed in final form
before the end of the 90-day period
beginning on the date of the enactment
of this subsection; and
(ii) take effect before the end of
the 120-day period beginning on such
date.
(5) Limitation.--No provision of this section shall
be construed to authorize a national bank or any
subsidiary thereof to engage in any activity not
otherwise authorized under the National Bank Act or any
other law governing the powers of a national bank.
(t) Exemption for Bank Holding Companies.--This section shall
not apply to a bank holding company that is subject to the Bank
Holding Company Act of 1956, or any company controlled by such
bank holding company.
* * * * * * *
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FEDERAL RESERVE ACT
* * * * * * *
Sec. 11. The Board of Governors of the Federal Reserve System
shall be authorized and empowered:
(a)(1) To examine at its discretion the accounts, books and
affairs of each Federal reserve bank and of each member bank
and to require such statements and reports as it may deem
necessary. The said board shall publish once each week a
statement showing the condition of each Federal reserve bank
and a consolidated statement for all Federal reserve banks.
Such statements shall show in detail the assets and liabilities
of the Federal reserve banks, single and combined, and shall
furnish full information regarding the character of the money
held as reserve and the amount, nature and maturities of the
paper and other investments owned or held by Federal reserve
banks.
(2) To require any depository institution specified in this
paragraph to make, at such intervals as the Board may
prescribe, such reports of its liabilities and assets as the
Board may determine to be necessary or desirable to enable the
Board to discharge its responsibility to monitor and control
monetary and credit aggregates. Such reports shall be made (A)
directly to the Board in the case of member banks and in the
case of other depository institutions whose reserve
requirements under section 19 of this Act exceed zero, and (B)
for all other reports to the Board through the (i) Federal
Deposit Insurance Corporation in the case of insured State
savings associations that are insured depository institutions
(as defined in section 3 of the Federal Deposit Insurance Act),
State nonmember banks, savings banks, and mutual savings banks,
(ii) National Credit Union Administration Board in the case of
insured credit unions, (iii) the Comptroller of the Currency in
the case of any Federal savings association which is an insured
depository institution (as defined in section 3 of the Federal
Deposit Insurance Act) or which is a member as defined in
section 2 of the Federal Home Loan Bank Act, and (iv) such
State officer or agency as the Board may designate in the case
of any other type of bank, savings association, or credit
union. The Board shall endeavor to avoid the imposition of
unnecessary burdens on reporting institutions and the
duplication of other reporting requirements. Except as
otherwise required by law, any data provided to any department,
agency, or instrumentality of the United States pursuant to
other reporting requirements shall be made available to the
Board. The Board may classify depository institutions for the
purposes of this paragraph and may impose different
requirements on each such class.
(b) To permit, or, on the affirmative vote of at least five
members of the Board of Governors of the Federal Reserve System
to require Federal reserve banks to rediscount the discounted
paper of other Federal reserve banks at rates of interest to be
fixed by the Board of Governors of the Federal Reserve System.
(c) To suspend for a period not exceeding thirty days, and
from time to time to renew such suspension for periods not
exceeding fifteen days, any reserve requirements specified in
this Act.
(d) To supervise and regulate through the Secretary of the
Treasury the issue and retirement of Federal reserve notes,
except for the cancellation and destruction, and accounting
with respect to such cancellation and destruction, of notes
unfit for circulation, and to prescribe rules and regulations
under which such notes may be delivered by the Secretary of the
Treasury to the Federal reserve agents applying therefor.
(e) To add to the number of cities classified as Reserve
cities under existing law in which national banking
associations are subject to the Reserve requirements set forth
in section twenty of this Act; or to reclassify existing
Reserve cities or to terminate their designation as such.
(f) To suspend or remove any officer or director of any
Federal reserve bank, the cause of such removal to be forthwith
communicated in writing by the Board of Governors of the
Federal Reserve System to the removed officer or director and
to said bank.
(g) To require the writing off of doubtful or worthless
assets upon the books and balance sheets of Federal reserve
banks.
(h) To suspend, for the violation of any of the provisions of
this Act, the operations of any Federal reserve bank, to take
possession thereof, administer the same during the period of
suspension, and, when deemed advisable, to liquidate or
reorganize such bank.
(i) To require bonds of Federal reserve agents, to make
regulations for the safeguarding of all collateral, bonds,
Federal reserve notes, money or property of any kind deposited
in the hands of such agents, and said board shall perform the
duties, functions, or services specified in this Act, and make
all rules and regulations necessary to enable said board
effectively to perform the same.
(j) To exercise general supervision over said Federal reserve
banks.
(k) To delegate, by published order or rule and subject to
the Administrative Procedure Act, any of its functions, other
than those relating to rulemaking or pertaining principally to
monetary and credit policies, to one or more administrative law
judges, members or employees of the Board, or Federal Reserve
banks. The assignment of responsibility for the performance of
any function that the Board determines to delegate shall be a
function of the Chairman. The Board shall, upon the vote of one
member, review action taken at a delegated level within such
time and in such manner as the Board shall by rule prescribe.
The Board of Governors may not delegate to a Federal reserve
bank its functions for the establishment of policies for the
supervision and regulation of depository institution holding
companies and other financial firms supervised by the Board of
Governors.
(l) To employ such attorneys, experts, assistants, clerks, or
other employees as may be deemed necessary to conduct the
business of the board. All salaries and fees shall be fixed in
advance by said board and shall be paid in the same manner as
the salaries of the members of said board. All such attorneys,
experts, assistants, clerks, and other employees shall be
appointed without regard to the provisions of the Act of
January sixteenth, eighteen hundred and eighty-three (volume
twenty-two, United States Statutes at Large, page four hundred
and three), and amendments thereto, or any rule or regulation
made in pursuance thereof: Provided, That nothing herein shall
prevent the President from placing said employees in the
classified service.
(n) To examine, at the Board's discretion, any depository
institution, and any affiliate of such depository institution,
in connection with any advance to, any discount of any
instrument for, or any request for any such advance or discount
by, such depository institution under this Act.
(o) Authority To Appoint Conservator or Receiver.--The Board
may appoint the Federal Deposit Insurance Corporation as
conservator or receiver for a State member bank under section
11(c)(9) of the Federal Deposit Insurance Act.
(p) Authority.--The Board may act in its own name and through
its own attorneys in enforcing any provision of this title,
regulations promulgated hereunder, or any other law or
regulation, or in any action, suit, or proceeding to which the
Board is a party and which involves the Board's regulation or
supervision of any bank, bank holding company (as defined in
section 2 of the Bank Holding Company Act of 1956), or other
entity, or the administration of its operations.
(q) Uniform Protection Authority for Federal Reserve
Facilities.--
(1) Notwithstanding any other provision of law, to
authorize personnel to act as law enforcement officers
to protect and safeguard the premises, grounds,
property, personnel, including members of the Board, of
the Board, or any Federal reserve bank, and operations
conducted by or on behalf of the Board or a reserve
bank.
(2) The Board may, subject to the regulations
prescribed under paragraph (5), delegate authority to a
Federal reserve bank to authorize personnel to act as
law enforcement officers to protect and safeguard the
bank's premises, grounds, property, personnel, and
operations conducted by or on behalf of the bank.
(3) Law enforcement officers designated or authorized
by the Board or a reserve bank under paragraph (1) or
(2) are authorized while on duty to carry firearms and
make arrests without warrants for any offense against
the United States committed in their presence, or for
any felony cognizable under the laws of the United
States committed or being committed within the
buildings and grounds of the Board or a reserve bank if
they have reasonable grounds to believe that the person
to be arrested has committed or is committing such a
felony. Such officers shall have access to law
enforcement information that may be necessary for the
protection of the property or personnel of the Board or
a reserve bank.
(4) For purposes of this subsection, the term ``law
enforcement officers'' means personnel who have
successfully completed law enforcement training and are
authorized to carry firearms and make arrests pursuant
to this subsection.
(5) The law enforcement authorities provided for in
this subsection may be exercised only pursuant to
regulations prescribed by the Board and approved by the
Attorney General.
(r)(1) Any action that this Act provides may be taken only
upon the affirmative vote of 5 members of the Board may be
taken upon the unanimous vote of all members then in office if
there are fewer than 5 members in office at the time of the
action.
(2)(A) Any action that the Board is otherwise authorized to
take under section 13(3) may be taken upon the unanimous vote
of all available members then in office, if--
(i) at least 2 members are available and all
available members participate in the action;
(ii) the available members unanimously determine
that--
(I) unusual and exigent circumstances exist
and the borrower is unable to secure adequate
credit accommodations from other sources;
(II) action on the matter is necessary to
prevent, correct, or mitigate serious harm to
the economy or the stability of the financial
system of the United States;
(III) despite the use of all means available
(including all available telephonic,
telegraphic, and other electronic means), the
other members of the Board have not been able
to be contacted on the matter; and
(IV) action on the matter is required before
the number of Board members otherwise required
to vote on the matter can be contacted through
any available means (including all available
telephonic, telegraphic, and other electronic
means); and
(iii) any credit extended by a Federal reserve bank
pursuant to such action is payable upon demand of the
Board.
(B) The available members of the Board shall document in
writing the determinations required by subparagraph (A)(ii),
and such written findings shall be included in the record of
the action and in the official minutes of the Board, and copies
of such record shall be provided as soon as practicable to the
members of the Board who were not available to participate in
the action and to the Chairman of the Committee on Banking,
Housing, and Urban Affairs of the Senate and to the Chairman of
the Committee on Financial Services of the House of
Representatives.
(s) Federal Reserve Transparency and Release of
Information.--
(1) In general.--In order to ensure the disclosure in
a timely manner consistent with the purposes of this
Act of information concerning the borrowers and
counterparties participating in emergency credit
facilities, discount window lending programs, and open
market operations authorized or conducted by the Board
or a Federal reserve bank, the Board of Governors shall
disclose, as provided in paragraph (2)--
(A) the names and identifying details of each
borrower, participant, or counterparty in any
credit facility or covered transaction;
(B) the amount borrowed by or transferred by
or to a specific borrower, participant, or
counterparty in any credit facility or covered
transaction;
(C) the interest rate or discount paid by
each borrower, participant, or counterparty in
any credit facility or covered transaction; and
(D) information identifying the types and
amounts of collateral pledged or assets
transferred in connection with participation in
any credit facility or covered transaction.
(2) Mandatory release date.--In the case of--
(A) a credit facility, the Board shall
disclose the information described in paragraph
(1) on the date that is 1 year after the
effective date of the termination by the Board
of the authorization of the credit facility;
and
(B) a covered transaction, the Board shall
disclose the information described in paragraph
(1) on the last day of the eighth calendar
quarter following the calendar quarter in which
the covered transaction was conducted.
(3) Earlier release date authorized.--The Chairman of
the Board may publicly release the information
described in paragraph (1) before the relevant date
specified in paragraph (2), if the Chairman determines
that such disclosure would be in the public interest
and would not harm the effectiveness of the relevant
credit facility or the purpose or conduct of covered
transactions.
(4) Definitions.--For purposes of this subsection,
the following definitions shall apply:
(A) Credit facility.--The term ``credit
facility'' has the same meaning as in section
714(f)(1)(A) of title 31, United States Code.
(B) Covered transaction.--The term ``covered
transaction'' means--
(i) any open market transaction with
a nongovernmental third party conducted
under the first undesignated paragraph
of section 14 or subparagraph (a), (b),
or (c) of the 2nd undesignated
paragraph of such section, after the
date of enactment of the Dodd-Frank
Wall Street Reform and Consumer
Protection Act; and
(ii) any advance made under section
10B after the date of enactment of that
Act.
(5) Termination of credit facility by operation of
law.--A credit facility shall be deemed to have
terminated as of the end of the 24-month period
beginning on the date on which the credit facility
ceases to make extensions of credit and loans, unless
the credit facility is otherwise terminated by the
Board before such date.
(6) Consistent treatment of information.--Except as
provided in this subsection or section 13(3)(D), or in
section 714(f)(3)(C) of title 31, United States Code,
the information described in paragraph (1) and
information concerning the transactions described in
section 714(f) of such title, shall be confidential,
including for purposes of section 552(b)(3) of title 5
of such Code, until the relevant mandatory release date
described in paragraph (2), unless the Chairman of the
Board determines that earlier disclosure of such
information would be in the public interest and would
not harm the effectiveness of the relevant credit
facility or the purpose of conduct of the relevant
transactions.
(7) Protection of personal privacy.--This subsection
and section 13(3)(C), section 714(f)(3)(C) of title 31,
United States Code, and subsection (a) or (c) of
section 1109 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act shall not be construed as
requiring any disclosure of nonpublic personal
information (as defined for purposes of section 502 of
the Gramm-Leach-Bliley Act (12 U.S.C. 6802)) concerning
any individual who is referenced in collateral pledged
or assets transferred in connection with a credit
facility or covered transaction, unless the person is a
borrower, participant, or counterparty under the credit
facility or covered transaction.
(8) Study of foia exemption impact.--
(A) Study.--The Inspector General of the
Board of Governors of the Federal Reserve
System shall--
(i) conduct a study on the impact
that the exemption from section
552(b)(3) of title 5 (known as the
Freedom of Information Act) established
under paragraph (6) has had on the
ability of the public to access
information about the administration by
the Board of Governors of emergency
credit facilities, discount window
lending programs, and open market
operations; and
(ii) make any recommendations on
whether the exemption described in
clause (i) should remain in effect.
(B) Report.--Not later than 30 months after
the date of enactment of this section, the
Inspector General of the Board of Governors of
the Federal Reserve System shall submit a
report on the findings of the study required
under subparagraph (A) to the Committee on
Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services
of the House of Representatives, and publish
the report on the website of the Board.
(9) Rule of construction.--Nothing in this section is
meant to affect any pending litigation or lawsuit filed
under section 552 of title 5, United States Code
(popularly known as the Freedom of Information Act), on
or before the date of enactment of the Dodd-Frank Wall
Street Reform and Consumer Protection Act.
(s) Assessments, Fees, and Other Charges for Certain
Companies.--
(1) In general.--The Board shall collect a total
amount of assessments, fees, or other charges from the
companies described in paragraph (2) that is equal to
the total expenses the Board estimates are necessary or
appropriate to carry out the supervisory and regulatory
responsibilities of the Board with respect to such
companies.
(2) Companies.--The companies described in this
paragraph are--
(A) all bank holding companies having total
consolidated assets of $100,000,000,000 or
more;
(B) all savings and loan holding companies
having total consolidated assets of
$100,000,000,000 or more; and
(C) all nonbank financial companies
supervised by the Board under section 113 of
the Dodd-Frank Wall Street Reform and Consumer
Protection Act.
(3) Tailoring assessments.--In collecting
assessments, fees, or other charges under paragraph (1)
from each company described in paragraph (2) with total
consolidated assets of between $100,000,000,000 and
$250,000,000,000, the Board shall adjust the amount
charged to reflect any changes in supervisory and
regulatory responsibilities resulting from the Economic
Growth, Regulatory Relief, and Consumer Protection Act
with respect to each such company.
(4) Excluded assets.--For purposes of paragraph
(2)(B), the total consolidated assets of an insurance
savings and loan holding company, as defined in section
10(a)(1)(L) of the Home Owners' Loan Act (12 U.S.C.
1467a(a)(1)(L)), shall not include assets attributable
to the business of insurance conducted by such company
or any affiliate of such company, other than assets
associated with insurance for credit risk.
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