12 U.S.C. § 1815 — Deposit insurance

(a) Application to Corporation required. (1) In general. Except as paragraphs (2) and (3) provide, a depository institution that receives deposits other than trust funds^* (the section uses the term "trust funds" as defined in section 1813(p) of this title) may become an insured depository institution only after applying to and being examined by the Corporation and receiving approval from the Board of Directors. (2) Interim depository institutions. An interim Federal depository institution chartered by the appropriate Federal banking agency^* that will not open for business becomes insured when that agency issues its charter. (3) Application and approval not required in cases of continued insurance. Paragraph (1) does not apply when the institution's insured status continues under section 1814 of this title. (4) Review requirements. When reviewing an application under this subsection, the Board of Directors must consider the factors in section 1816 of this title in deciding whether to approve insurance. (5) Notice of denial of application for insurance. If the Board votes to deny an institution's insurance application, it must promptly notify the appropriate Federal banking agency and, for a State^* depository institution, the appropriate State banking supervisor. The notice must give specific written reasons and refer to the factors in section 1816. (6) Nondelegation requirement. The Board of Directors may not delegate its authority to decide to deny an application under this subsection.

(b) Foreign branch^* nonmember banks; matters considered. Subject to this chapter and any terms and conditions the Board of Directors imposes, a branch of a foreign bank^* may become an insured branch after the bank applies to the Corporation, the Corporation examines the branch, and the Board approves the application. Before approving it, the Board must consider: (1) the bank's financial history and condition; (2) whether its capital structure is adequate; (3) its prospects for future earnings; (4) the general character and fitness of its management, including the proposed insured branch's management; (5) the risk to the Deposit Insurance Fund; (6) the convenience and needs of the community the branch will serve; (7) whether the bank's corporate powers, as exercised through the proposed insured branch, are consistent with this chapter's purposes; and (8) whether information the bank has supplied or will supply is probably adequate and reliable enough for the Corporation to perform its functions under this chapter.

(c) Protection to Deposit Insurance Fund; surety bond, pledge of assets, etc.; injunction. (1) Before a foreign-bank branch becomes insured, the bank must deliver to the Corporation, or as the Corporation directs, a surety bond, a pledge of assets, or both. The amount and type must be what the Corporation requires or approves for the purpose in paragraph (4). (2) After the branch becomes insured, the bank must keep surety bonds, assets, or both on deposit with the Corporation or as the Corporation directs. The amount and type must be set from time to time under regulations issued by the Board of Directors. Those regulations may impose different requirements based on factors the Board reasonably considers related to paragraph (4)'s purpose. (3) The Corporation may require a particular bank to deposit more bonds or assets than paragraph (2) requires if the Corporation decides that the bank's or a branch's situation means the usual deposits would not adequately serve paragraph (4)'s purpose. The Corporation may impose the additional requirement without notice or a hearing, but must give the bank an opportunity to ask that the additional requirement be reduced or removed. (4) The purpose of the required bonds and asset pledges is to protect the Deposit Insurance Fund from risks involved in insuring a foreign bank's domestic deposits when much of the bank's activity, assets, and personnel are outside United States jurisdiction. In using this authority, the Corporation must try to avoid requirements that unnecessarily put such banks at a competitive disadvantage compared with banks incorporated domestically. (5) If a foreign bank fails or threatens to fail to meet a requirement under this subsection, the Corporation may, in addition to other administrative and court remedies, apply to a United States district court or a United States court of a territory where one of the bank's branches is located. It may seek an injunction requiring the bank and its officers, employees, agents, or any other person^* holding or controlling its assets to deliver assets needed to meet the requirement and to take other steps needed to give the Corporation control of those assets. If the court finds a failure or threatened failure to comply, the court must issue the injunction. The legality of the requirement may be challenged only as chapter 7 of title 5 provides; it cannot be challenged in the injunction action under this paragraph.

(d) Insurance fees. (1) In general. An institution that becomes insured by the Corporation, and a noninsured branch that becomes insured by the Corporation, must pay any fee the Corporation sets by regulation after considering the need to establish and maintain the Deposit Insurance Fund's reserve ratio. (2) Fee credited to the Deposit Insurance Fund. The depository institution's fee must be credited to that Fund. (3) Exception for certain depository institutions. A depository institution that becomes insured by operation of section 1814(a) of this title does not pay a fee.

(e) Liability of commonly controlled depository institutions. (1) In general. (A) Liability established. An insured depository institution is liable for a loss the Corporation incurred, or reasonably expects to incur, after August 9, 1989, in connection with: (i) the default of a commonly controlled insured depository institution; or (ii) assistance the Corporation gave to a commonly controlled insured depository institution in danger of default. (B) Payment upon notice. The institution must pay that liability when it receives the Corporation's written notice under this subsection. (C) Notice required to be provided within 2 years of loss. The institution is not liable if it does not receive written notice before the end of the two-year period beginning when the Corporation incurred the loss.

(2) Amount of compensation; procedures. (A) Use of estimates. When an insured depository institution defaults or needs help to prevent default, the Corporation must: (i) estimate in good faith the loss it will incur from the default or assistance; (ii) if more than one commonly controlled insured depository institution exists, estimate each institution's share of the liability; and (iii) tell each such institution the estimated amount of its liability. (B) Procedures; immediate payment. After consulting the appropriate Federal banking agency and appropriate State chartering agency, the Corporation must either: (i) establish, for each case, procedures and a payment schedule for an insured depository institution to reimburse the Corporation for its liability connected with a commonly controlled institution; or (ii) require immediate payment of that liability. (C) Priority. The liability has the following priority over other obligations and liabilities. (i) Superiority. It is superior to: (I) an obligation to shareholders because they are shareholders, including a depository institution holding company or a shareholder or creditor of that company; and (II) an obligation or liability owed to an affiliate^*, including another insured depository institution, except a secured obligation secured as of May 1, 1989. (ii) Subordination. It is subordinate in right and payment to: (I) a deposit liability that is not described in clause (i)(II); (II) a secured obligation, except an obligation owed to an affiliate, including another insured depository institution, that was secured after May 1, 1989; (III) any other general or senior liability not described in clause (i); and (IV) an obligation subordinated to depositors or other general creditors that is not described in clause (i). (D) Adjustment of estimated payment. (i) Overpayment. If one or more commonly controlled institutions pay more than the Corporation's actual loss, the Corporation must repay each institution its proportional share of the overpayment. (ii) Underpayment. If they pay less than the actual loss, the Corporation may recalculate each institution's liability and must require each to pay any additional amount.

(3) Review. (A) Judicial. Actions by the Corporation may be reviewed under chapter 7 of title 5. (B) Administrative. The Corporation must issue regulations and establish administrative procedures providing for a hearing on the record to review: (i) the Corporation's loss connected with an insured depository institution; (ii) each commonly controlled institution's liability for that loss; and (iii) the payment schedule for those institutions.

(4) Limitation on rights of private parties. If exercising a person's right or power would impair an insured depository institution's ability to perform its obligations under this subsection: (A) those obligations override the right or power; and (B) no court may give effect to that right or power against the institution.

(5) Waiver authority. (A) In general. The Corporation may, in its discretion, exempt an insured depository institution from this subsection if it decides the exemption is in the Deposit Insurance Fund's best interests. (B) Condition. While an exemption under subparagraph (A) or (C) is in effect, the exempt institution and all its insured depository institution affiliates must fully comply with sections 371c and 371c-1 of this title, without regard to section 371c(d)(1) of this title. (C) Limited partnerships. (i) In general. The Corporation may, in its discretion, exempt a limited partnership and its affiliates, other than an insured depository institution that is a majority-owned subsidiary of that partnership, if the limited partnership or an affiliate filed a registration statement with the Securities and Exchange Commission on or before April 10, 1989, indicating that, as of the date of that filing, the limited partnership intended to acquire one or more insured depository institutions. (ii) Review and notice. Within 10 business days after receiving an exemption request and information the Corporation reasonably requests, the Corporation must decide the request and notify the applicant.

(6) Exclusion for institutions acquired in debt collections. For this subsection, a depository institution is not treated as commonly controlled during the five years after an acquisition described in subparagraph (A), or for a longer period the Corporation allows after the acquirer applies in writing, if: (A) one depository institution controls another through voting shares acquired while securing or collecting a debt that was previously contracted in good faith; and (B) from August 9, 1989, until the exclusion ends, the controlling bank and all its other insured depository institution affiliates fully comply with sections 371c and 371c-1 of this title, without regard to section 371c(d)(1), in transactions with the acquired insured depository institution. (7) Exception for certain FSLIC assisted institutions. A depository institution has no liability under this subsection for the default of, or assistance given to, an insured depository institution that is its affiliate if: (A) the affiliate was receiving cash payments from the Federal Savings and Loan Insurance Corporation under an assistance agreement or note made before August 9, 1989; (B) the Corporation, or another entity that took over its payment duties for that agreement or note, cannot continue the payments; and (C) the affiliate: (i) is in default or needs assistance only because those payments were not made; and (ii) is not otherwise violating the assistance agreement or note in a way that would allow the Corporation or successor entity, under that agreement or note, to refuse the payments. (8) Commonly controlled defined. For this subsection, depository institutions are commonly controlled if: (A) the same company controls them; or (B) one depository institution controls another.