12 U.S.C. § 1831i — Agency disapproval of directors and senior executive officers of insured depository institutions or depository institution holding companies
submitted 76 years ago by Pub. L. 101-73 to r/title-12-BANKS-AND-BANKING · 483 words · no verdicts yet
An institution or holding company in a troubled condition or below its required capital must give advance notice before adding a director or senior executive officer. The banking agency may disapprove the person based on competence, experience, character, or integrity.
(a) Prior notice. An insured depository institution or holding company must notify its appropriate Federal banking agency* at least 30 days, or another period the agency sets, before adding a director* or employing a senior executive officer if (1) it does not meet its minimum capital requirement or is otherwise in “troubled condition,” based on its latest reports or examination, or (2) the agency finds notice appropriate while reviewing the plan required by 12 U.S.C. § 1831o or otherwise.
(b) Disapproval. The institution or company may not make the appointment if the agency sends a disapproval notice during the notice period, which may not exceed 90 days from receiving notice.
(c) Extraordinary circumstances. (1) Each agency may by regulation allow the notice requirement to be waived under specified extraordinary circumstances. (2) A waiver does not remove the agency’s power to disapprove within 30 days after the waiver.
(d) More information. The notice must include the information about the person* required by 12 U.S.C. § 1817(j)(6)(A) and any other information required by regulation.
(e) Disapproval standard. The agency must disapprove if the person’s competence, experience, character, or integrity indicates that employing or associating with the person would not be in the depositors’ or public’s best interests.
(f) Definitions. Each agency must define “troubled condition” and “senior executive officer” by regulation for subsection (a).
An insured depository institution or depository institution holding company shall notify the appropriate Federal banking agency* of the proposed addition of any individual to the board of directors or the employment of any individual as a senior executive officer of such institution or holding company at least 30 days (or such other period, as determined by the appropriate Federal banking agency) before such addition or employment becomes effective, if—
the insured depository institution or depository institution holding company is not in compliance with the minimum capital requirement applicable to such institution or is otherwise in a troubled condition, as determined by such agency on the basis of such institution’s or holding company’s most recent report of condition or report of examination or inspection; or
the agency determines, in connection with the review by the agency of the plan required under section 1831o of this title or otherwise, that such prior notice is appropriate.
An insured depository institution or depository institution holding company may not add any individual to the board of directors or employ any individual as a senior executive officer if the appropriate Federal banking agency issues a notice of disapproval of such addition or employment before the end of the notice period, not to exceed 90 days, beginning on the date the agency receives notice of the proposed action pursuant to subsection (a).
Each appropriate Federal banking agency may prescribe by regulation conditions under which the prior notice requirement of subsection (a) may be waived in the event of extraordinary circumstances.
Such waivers shall not affect the authority of each agency to issue notices of disapproval of such additions or employment of such individuals within 30 days after each such waiver.
Any notice submitted to an appropriate Federal banking agency with respect to an individual by any insured depository institution or depository institution holding company pursuant to subsection (a) shall include—
the information described in section 1817(j)(6)(A) of this title about the individual; and
such other information as the agency may prescribe by regulation.
The appropriate Federal banking agency shall issue a notice of disapproval with respect to a notice submitted pursuant to subsection (a) if the competence, experience, character, or integrity of the individual with respect to whom such notice is submitted indicates that it would not be in the best interests of the depositors of the depository institution or in the best interests of the public to permit the individual to be employed by, or associated with, the depository institution or depository institution holding company.
Each appropriate Federal banking agency shall prescribe by regulation a definition for the terms “troubled condition” and “senior executive officer” for purposes of subsection (a).
Source credit: (Sept. 21, 1950, ch. 967, § 2[32], as added Pub. L. 101–73, title IX, § 914(a), Aug. 9, 1989, 103 Stat. 484; amended Pub. L. 104–208, div. A, title II, § 2209, Sept. 30, 1996, 110 Stat. 3009–409.)
- 1950Enacted · Pub. L. 101-73 · 103 Stat. 484
- 1996Amended · Pub. L. 104-208 · 110 Stat. 3009
A history note hasn’t been published yet. The record shows enactment by Pub. L. 101-73 on 1950-09-21.
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