12 U.S.C. § 4615 — Supervisory actions applicable to undercapitalized regulated entities
submitted 34 years ago by Pub. L. 102-550 to r/title-12-BANKS-AND-BANKING · 499 words · no verdicts yet
The Director must monitor undercapitalized regulated entities and require plans to restore capital. The section restricts distributions, asset growth, acquisitions, and new activities, and requires reclassification in specified cases.
(a) Mandatory actions. (1) The Director* must closely monitor the entity’s condition, compliance with its capital-restoration plan and restrictions, and whether those measures achieve this section’s purpose. (2) An undercapitalized entity must timely submit a section 4622-compliant plan and carry it out after approval. (3) It may not make a distribution that would make it significantly or critically undercapitalized. (4) It may not let average total assets in a quarter exceed the preceding quarter’s average unless (A) the Director accepted the plan, (B) the increase is consistent with it, and (C) tangible equity compared with assets rises fast enough for adequate capitalization within a reasonable time. (5) It may not, directly or indirectly, acquire any interest in any entity or start a new activity unless (A) the accepted plan is being implemented and the Director finds the action consistent with and advancing it, or (B) the Director finds the action advances this subchapter’s purpose.
(b) The Director must reclassify an undercapitalized entity as significantly undercapitalized, subject to section 4616, if (1) it fails to submit a substantially compliant section 4622 plan on time or the Director rejects it, or (2) it materially fails to comply with the approved plan or schedule.
(c) The Director may take any section 4616 action against an undercapitalized entity if necessary to carry out this subchapter. This section does not define the quoted technical terms.
The Director* shall—
closely monitor the condition of any undercapitalized regulated entity*;
closely monitor compliance with the capital restoration plan, restrictions, and requirements imposed on an undercapitalized regulated entity under this section; and
periodically review the plan, restrictions, and requirements applicable to an undercapitalized regulated entity to determine whether the plan, restrictions, and requirements are achieving the purpose of this section.
A regulated entity that is classified as undercapitalized shall, within the time period provided in section 4622(b) and (d) of this title, submit to the Director a capital restoration plan that complies with section 4622 of this title and carry out the plan after approval.
A regulated entity that is classified as undercapitalized may not make any capital distribution* that would result in the regulated entity being reclassified as significantly undercapitalized or critically undercapitalized.
An undercapitalized regulated entity shall not permit its average total assets during any calendar quarter to exceed its average total assets during the preceding calendar quarter, unless—
the Director has accepted the capital restoration plan of the regulated entity;
any increase in total assets is consistent with the capital restoration plan; and
the ratio of tangible equity to assets of the regulated entity increases during the calendar quarter at a rate sufficient to enable the regulated entity to become adequately capitalized within a reasonable time.
An undercapitalized regulated entity shall not, directly or indirectly, acquire any interest in any entity or engage in any new activity, unless—
the Director has accepted the capital restoration plan of the regulated entity, the regulated entity is implementing the plan, and the Director determines that the proposed action is consistent with and will further the achievement of the plan; or
the Director determines that the proposed action will further the purpose of this subchapter.
The Director shall reclassify as significantly undercapitalized a regulated entity that is classified as undercapitalized (and the regulated entity shall be subject to the provisions of section 4616 of this title) if—
the regulated entity does not submit a capital restoration plan that is substantially in compliance with section 4622 of this title within the applicable period or the Director does not approve the capital restoration plan submitted by the regulated entity; or
the Director determines that the regulated entity has failed to comply with the capital restoration plan and fulfill the schedule for the plan approved by the Director in any material respect.
The Director may take, with respect to an undercapitalized regulated entity, any of the actions authorized to be taken under section 4616 of this title with respect to a significantly undercapitalized regulated entity, if the Director determines that such actions are necessary to carry out the purpose of this subchapter.
Source credit: (Pub. L. 102–550, title XIII, § 1365, Oct. 28, 1992, 106 Stat. 3978; Pub. L. 110–289, div. A, title I, § 1143, July 30, 2008, 122 Stat. 2732.)
- 1992Enacted · Pub. L. 102-550 · 106 Stat. 3978
- 2008Amended · Pub. L. 110-289 · 122 Stat. 2732
A history note hasn’t been published yet. The record shows enactment by Pub. L. 102-550 on 1992-10-28.
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