(b) (1) A bank shall not in any manner
extend credit, lease or sell property of any kind, or furnish any
service, or fix or vary the consideration for any of the foregoing,
on the condition or requirement—
(A) that the customer shall
obtain some additional credit, property, or service from such bank
other than a loan, discount, deposit, or trust service;
(B) that the customer shall
obtain some additional credit, property, or service from a bank holding
company of such bank, or from any other subsidiary of such bank holding
company;
(C) that
the customer provide some additional credit, property, or service
to such bank, other than those related to and usually provided in
connection with a loan, discount, deposit, or trust service;
(D) that the customer provide
some additional credit, property, or service to a bank holding company
of such bank, or to any other subsidiary of such bank holding company;
or
(E) that the
customer shall not obtain some other credit, property, or service
from a competitor of such bank, a bank holding company of such bank, or any subsidiary
of such bank holding company, other than a condition or requirement
that such bank shall reasonably impose in a credit transaction to
assure the soundness of the credit.
(2) (A)
No bank which maintains a correspondent account in the name of another
bank shall make an extension of credit to an executive officer or
director of, or to any person who directly or indirectly or acting
through or in concert with one or more persons owns, controls, or
has the power to vote more than 10 per centum of any class of voting
securities of, such other bank, or to any related interest of such
person, unless such extension of credit is made on substantially the
same terms, including interest rates and collateral as those prevailing
at the time for comparable transactions with other persons and does
not involve more than the normal risk of repayment or present other
unfavorable features.
(B) No bank shall open a correspondent account at another bank while
such bank has outstanding an extension of credit to an executive officer
or director of, or other person who directly or indirectly or acting
through or in concert with one or more persons owns, controls, or
has the power to vote more than 10 per centum of any class of voting
securities of, the bank desiring to open the account, or to any related
interest of such person, unless such extension of credit was made
on substantially the same terms, including interest rates and collateral
as those prevailing at the time for comparable transactions with other
persons and does not involve more than the normal risk of re-payment
or present other unfavorable features.
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(C) No bank which maintains a correspondent
account at another bank shall make an extension of credit to an executive
officer or director of, or to any person who directly or indirectly
acting through or in concert with one or more persons owns, controls,
or has the power to vote more than 10 per centum of any class of voting
securities of, such other bank, or to any related interest of such
person, unless such extension of credit is made on substantially the
same terms, including interest rates and collateral as those prevailing
at the time for comparable transactions with other persons and does
not involve more than the normal risk of repayment or present other
unfavorable features.
(D) No bank which has outstanding an extension of credit to an executive
officer or director of, or to any person who directly or indirectly
or acting through or in concert with one or more persons owns, controls,
or has the power to vote more than 10 per centum of any class of voting
securities of, another bank, or to any related interest of such person
shall open a correspondent account at such other bank, unless such
extension of credit was made on substantially the same terms, including
interest rates and collateral as those prevailing at the time for
comparable transactions with other persons and does not involve more
than the normal risk of repayment or present other unfavorable features.
(E) For purposes of
this paragraph, the term “extension of credit” shall have the meaning
prescribed by the Board pursuant to section 22(h) of the Federal Reserve
Act (12 U.S.C. 375b), and the term “executive officer” shall have
the same meaning given it under section 22(g) of the Federal Reserve
Act.
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(F) (i) Any bank which, and any institution-affiliated party (within the meaning
of section 3(u) of the Federal Deposit Insurance Act) with respect
to such bank who, violates any provision of this paragraph shall forfeit
and pay a civil penalty of not more than $5,000 for each day during
which such violation continues.
(ii) Notwithstanding clause (i), any bank
which, and any institution-affiliated party (within the meaning of
section 3(u) of the Federal Deposit Insurance Act) with respect to
such bank who—
(I)
(aa) commits any violation described
in clause (i);
(bb) recklessly
engages in an unsafe or unsound practice in conducting the affairs
of such bank; or
(cc)
breaches any fiduciary duty;
(II) which violation, practice, or breach—
(aa) is part of a pattern of misconduct;
(bb) causes or is likely
to cause more than a minimal loss to such bank; or
(cc) results in pecuniary gain or other benefit
to such party,
shall forfeit and pay a civil penalty of not more than
$25,000 for each day during which such violation, practice, or breach
continues.
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(iii) Notwithstanding clauses (i) and (ii),
any bank which, and any institution-affiliated party (within the meaning
of section 3(u) of the Federal Deposit Insurance Act) with respect
to such bank who—
(I) knowingly—
(aa) commits any violation described in clause (i);
(bb) engages in any unsafe or unsound practice
in conducting the affairs of such bank; or
(cc) breaches any fiduciary duty; and
(II) knowingly
or recklessly causes a substantial loss to such bank or a substantial
pecuniary gain or other benefit to such party by reason of such violation,
practice, or breach,
shall forfeit and pay a civil penalty in an amount not
to exceed the applicable maximum amount determined under clause (iv)
for each day during which such violation, practice, or breach continues.
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(iv) The maximum daily amount
of any civil penalty which may be assessed pursuant to clause (iii)
for any violation, practice, or breach described in such clause is—
(I) in the case of any person other than
a bank, an amount to not exceed $1,000,000; and
(II) in the case of a bank, an amount not
to exceed the lesser of—
(aa) $1,000,000; or
(bb) 1 percent of the total assets of such bank.
(v) Any penalty
imposed under clause (i), (ii), or (iii) may be assessed and collected—
(I) in the case of a national bank, by the
Comptroller of the Currency;
(II) in the case of a State member bank,
by the Board; and
(III)
in the case of an insured non-member State bank, by the Federal Deposit
Insurance Corporation,
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.
3-1022.1
(vi) The bank or other person against whom
any penalty is assessed under this subparagraph shall be afforded
an agency hearing if such bank 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 subparagraph.
(vii) All penalties collected under authority
of this subsection shall be deposited into the Treasury.
(viii) For purposes of this paragraph,
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.
(ix) The Comptroller of the Currency, the
Board, and the Federal Deposit Insurance Corporation shall prescribe
regulations establishing such procedures as may be necessary to carry
out this subparagraph.
3-1024.1
(G) For the purpose of this paragraph—
(i) the term “bank” includes a mutual savings bank, a savings bank,
and a savings association (as those terms are defined in section 3
of the Federal Deposit Insurance Act);
(ii) the term “related interests of such persons”
includes any company controlled by such executive officer, director,
or person, or any political or campaign committee the funds or services
of which will benefit such executive officer, director, or person
or which is controlled by such executive officer, director, or person;
and
(iii) the terms “control
of a company” and “company” have the same meaning as under section
22(h) of the Federal Reserve Act (12 U.S.C. 375b).
