Skip to main content
1-400.4

SECTION 38—Prompt Corrective Action

(a) Resolving problems to protect Deposit Insurance Fund.
(1) The purpose of this section is to resolve the problems of insured depository institutions at the least possible long-term loss to the Deposit Insurance Fund.
(2) Each appropriate Federal banking agency and the Corporation (acting in the Corporation’s capacity as the insurer of depository institutions under this Act) shall carry out the purpose of this section by taking prompt corrective action to resolve the problems of insured depository institutions.
1-400.41
(b) Definitions. For purposes of this section:
(1) Capital categories.
(A) An insured depository institution is “well capitalized” if it significantly exceeds the required minimum level for each relevant capital measure.
(B) An insured depository institution is “adequately capitalized” if it meets the required minimum level for each relevant capital measure.
(C) An insured depository institution is “undercapitalized” if it fails to meet the required minimum level for any relevant capital measure.
(D) An insured depository institution is “significantly undercapitalized” if it is significantly below the required minimum level for any relevant capital measure.
(E) An insured depository institution is “critically undercapitalized” if it fails to meet any level specified under subsection (c)(3)(A).
1-400.42
(2) Other definitions.
(A) (i) The “average” of an accounting item (such as total assets or tangible equity) during a given period means the sum of that item at the close of business on each business day during that period divided by the total number of business days in that period.
(ii) In the case of insured depository institutions that have total assets of less than $300,000,000 and normally file reports of condition reflecting weekly (rather than daily) averages of accounting items, the appropriate Federal banking agency may provide that the “average” of an accounting item during a given period means the sum of that item at the close of business on the relevant business day each week during that period divided by the total number of weeks in that period.
1-400.43
(B) The term “capital distributionmeans—
(i) a distribution of cash or other property by any insured depository institution or company to its owners made on account of that ownership, but not including—
(I) any dividend consisting only of shares of the institution or company or rights to purchase such shares; or
(II) any amount paid on the deposits of a mutual or cooperative institution that the appropriate Federal banking agency determines is not a distribution for purposes of this section;
(ii) a payment by an insured depository institution or company to repurchase, redeem, retire, or otherwise acquire any of its shares or other ownership interests, including any extension of credit to finance an affiliated company’s acquisition of those shares or interests; or
(iii) a transaction that the appropriate Federal banking agency or the Corporation determines, by order or regulation, to be in substance a distribution of capital to the owners of the insured depository institution or company.
1-400.44
(C) The term “capital restoration plan” means a plan submitted under subsection (e)(2).
(D) The term “company” has the same meaning as in section 2 of the Bank Holding Company Act of 1956.
(E) The term “compensation” includes any payment of money or provision of any other thing of value in consideration of employment.
(F) The term “relevant capital measure” means the measures described in subsection (c).
(G) The term “required minimum level” means, with respect to each relevant capital measure, the minimum acceptable capital level specified by the appropriate Federal banking agency by regulation.
(H) The term “senior executive officer” has the same meaning as the “executive officer” in section 22(h) of the Federal Reserve Act.
(I) The term “subordinated debt” means debt subordinated to the claims of general creditors.
1-400.45
(c) Capital standards.
(1) (A) Except as provided in subparagraph (B)(ii), the capital standards prescribed by each appropriate Federal banking agency shall include—
(i) a leverage limit; and
(ii) a risk-based capital requirement.
(B) An appropriate Federal banking agency may, by regulation—
(i) establish any additional relevant capital measures to carry out the purpose of this section; or
(ii) rescind any relevant capital measure required under subparagraph (A) upon determining (with the concurrence of the other Federal banking agencies) that the measure is no longer an appropriate means for carrying out the purpose of this section.
(2) Each appropriate Federal banking agency shall, by regulation, specify for each relevant capital measure the levels at which an insured depository institution is well capitalized, adequately capitalized, under capitalized, and significantly under-capitalized.
1-400.46
(3) (A)(i) Each appropriate Federal banking agency shall, by regulation, in consultation with the Corporation, specify the ratio of tangible equity to total assets at which an insured depository institution is critically undercapitalized.
(ii) The agency may, by regulation, specify for 1 or more other relevant capital measures, the level at which an insured depository institution is critically undercapitalized.
(B) The level specified under subparagraph (A)(i) shall require tangible equity in an amount—
(i) not less than 2 percent of total assets; and
(ii) except as provided in clause (i), not more than 65 percent of the required minimum level of capital under the leverage limit.
(C) The appropriate Federal banking agency shall not, without the concurrence of the Corporation, specify a level under subparagraph (A)(i) lower than that specified by the Corporation for State nonmember insured banks.
1-400.47
(d) Provisions applicable to all institutions.
(1) (A) An insured depository institution shall make no capital distribution if, after making the distribution, the institution would be undercapitalized.
(B) Notwithstanding subparagraph (A), the appropriate Federal banking agency may permit, after consultation with the Corporation, an insured depository institution to repurchase, redeem, retire, or otherwise acquire shares or ownership interests if the repurchase, redemption, retirement, or other acquisition—
(i) is made in connection with the issuance of additional shares or obligations of the institution in at least an equivalent amount; and
(ii) will reduce the institution’s financial obligations or otherwise improve the insititution’s financial condition.
1-400.48
(2) An insured depository insitution shall pay no management fee to any person having control of that institution if, after making the payment, the institution would be undercapitalized.
1-400.49
(e) Provisions applicable to undercapitalized institutions.
(1) Each appropriate Federal banking agency shall—
(A) closely monitor the condition of any undercapitalized insured depository institution;
(B) closely monitor compliance with capital restoration plans, restrictions, and requirements imposed under this section; and
(C) periodically review the plan, restrictions, and requirements applicable to any undercapitalized insured depository institution to determine whether the plan, restrictions, and requirements are achieving the purpose of this section.
1-400.5
(2) (A) Any undercapitalized insured depository institution shall submit an acceptable capital restoration plan to the appropriate Federal banking agency within the time allowed by the agency under subparagraph (D).
(B) The capital restoration plan shall—
(i) specify—
(I) the steps the insured depository institution will take to become adequately capitalized;
(II) the levels of capital to be attained during each year in which the plan will be in effect;
(III) how the institution will comply with the restrictions or requirements then in effect under this section; and
(IV) the types and levels of activities in which the institution will engage; and
(ii) contain such other information as the appropriate Federal banking agency may require.
1-400.51
(C) The appropriate Federal banking agency shall not accept a capital restoration plan unless the agency determines that—
(i) the plan—
(I) complies with subparagraph (B);
(II) is based on realistic assumptions, and is likely to succeed in restoring the institution’s capital; and
(III) would not appreciably increase the risk (including credit risk, interest-rate risk, and other types of risk) to which the institution is exposed; and
(ii) if the insured depository institution is undercapitalized, each company having control of the institution has—
(I) guaranteed that the institution will comply with the plan until the institution has been adequately capitalized on average during each of 4 consecutive calendar quarters; and
(II) provided appropriate assurances of performance.
1-400.52
(D) The appropriate Federal banking agency shall by regulation establish deadlines that—
(i) provide insured depository institutions with reasonable time to submit capital restoration plans, and generally require an institution to submit a plan not later than 45 days after the institution becomes undercapitalized;
(ii) require the agency to act on capital restoration plans expeditiously, and generally not later than 60 days after the plan is submitted; and
(iii) require the agency to submit a copy of any plan approved by the agency to the Corporation before the end of the 45-day period beginning on the date such approval is granted.
1-400.53
(E) (i) The aggregate liability under subparagraph (C)(ii) of all companies having control of an insured depository institution shall be the lesser of
(I) an amount equal to 5 percent of the institution’s total assets at the time the institution became under-capitalized; or
(II) the amount which is necessary (or would have been necessary) to bring the institution into compliance with all capital standards applicable with respect to such institution as of the time the institution fails to comply with a plan under this subsection.
(ii) This paragraph may not be construed as—
(I) requiring any company not having control of an undercapitalized insured depository institution to guarantee, or otherwise be liable on, a capital restoration plan;
(II) requiring any person other than an insured depository institution to submit a capital restoration plan; or
(III) affecting compliance by brokers, dealers, government securities brokers, and government securities dealers with the financial responsibility requirements of the Securities Exchange Act of 1934 and regulations and orders thereunder.
1-400.54
(3) An undercapitalized insured depository institution shall not permit its average total assets during any calendar quarter to exceed its average total assets during the preceding calendar quarter unless—
(A) the appropriate Federal banking agency has accepted the institution’s capital restoration plan;
(B) any increase in total assets is consistent with the plan; and
(C) the institution’s ratio of tangible equity to assets increases during the calendar quarter at a rate sufficient to enable the institution to become adequately capitalized within a reasonable time.
1-400.55
(4) An undercapitalized insured depository institution shall not, directly or indirectly, acquire any interest in any company or insured depository institution, establish or acquire any additional branch office, or engage in any new line of business unless—
(A) the appropriate Federal banking agency has accepted the insured depository institution’s capital restoration plan, the institution is implementing the plan, and the agency determines that the proposed action is consistent with and will further the achievement of the plan; or
(B) the Board of Directors determines that the proposed action will further the purpose of this section.
(5) The appropriate Federal banking agency may, with respect to any undercapitalized insured depository institution, take actions described in any subparagraph of subsection (f)(2) if the agency determines that those actions are necessary to carry out the purpose of this section.
1-400.56
(f) Provisions applicable to significantly undercapitalized institutions and undercapitalized institutions that fail to submit and implement capital restoration plans.
(1) This subsection shall apply with respect to any insured depository institution that—
(A) is significantly undercapitalized; or
(B) is undercapitalized and—
(i) fails to submit an acceptable capital restoration plan within the time allowed by the appropriate Federal banking agency under subsection (e)(2)(D); or
(ii) fails in any material respect to implement a plan accepted by the agency.
1-400.57
(2) The appropriate Federal banking agency shall carry out this section by taking 1 or more of the following actions:
(A) Doing 1 or more of the following:
(i) Requiring the institution to sell enough shares or obligations of the institution so that the institution will be adequately capitalized after the sale.
(ii) Further requiring that instruments sold under clause (i) be voting shares.
(iii) Requiring the institution to be acquired by a depository institution holding company, or to combine with another insured depository institution, if 1 or more grounds exist for appointing a conservator or receiver for the institution.
(B) (i) Requiring the institution to comply with section 23A of the Federal Reserve Act as if subsection (d)(1) of that section (exempting transactions with certain affiliated institutions) did not apply.
(ii) Further restricting the institution’s transactions with affiliates.
1-400.58
(C) (i) Restricting the interest rates that the institution pays on deposits to the prevailing rates of interest on deposits of comparable amounts and maturities in the region where the institution is located, as determined by the agency.
(ii) This subparagraph does not authorize the agency to restrict interest rates paid on time deposits made before (and not renewed or renegotiated after) the agency acted under this subparagraph.
(D) Restricting the institution’s asset growth more stringently than subsection (e)(3), or requiring the institution to reduce its total assets.
(E) Requiring the institution or any of its subsidiaries to alter, reduce, or terminate any activity that the agency determines poses excessive risk to the institution.
1-400.59
(F) Doing 1 or more of the following:
(i) Ordering a new election for the institution’s board of directors.
(ii) Requiring the institution to dismiss from office any director or senior executive officer who had held office for more than 180 days immediately before the institution became under capitalized. Dismissal under this clause shall not be construed to be a removal under section 8.*
(iii) Requiring the institution to employ qualified senior executive officers (who, if the agency so specifies, shall be subject to approval by the agency).
1-400.6
(G) Prohibiting the acceptance by the institution of deposits from correspondent depository institutions, including renewals and rollovers of prior deposits.
(H) Prohibiting any bank holding company having control of the insured depository institution from making any capital distribution without the prior approval of the Board of Governors of the Federal Reserve System.
1-400.61
(I) Doing one or more of the following:
(i) Requiring the institution to divest itself of or liquidate any subsidiary if the agency determines that the subsidiary is in danger of becoming insolvent and poses a significant risk to the institution, or is likely to cause a significant dissipation of the institution’s assets or earnings.
(ii) Requiring any company having control of the institution to divest itself of or liquidate any affiliate other than an insured depository institution if the appropriate Federal banking agency for that company determines that the affiliate is in danger of becoming insolvent and poses a significant risk to the institution, or is likely to cause a significant dissipation of the institution’s assets or earnings.
(iii) Requiring any company having control of the institution to divest itself of the institution if the appropriate Federal banking agency for that company determines that divestiture would improve the institution’s financial condition and future prospectus.
1-400.62
(J) Requiring the institution to take any other action that the agency determines will better carry out the purpose of this section than any of the actions described in this paragraph.
1-400.63
(3) In complying with paragraph (2), the agency shall take the following actions, unless the agency determines that the actions would not further the purpose of this section:
(A) The action described in clause (i) or (iii) of paragraph (2)(A) (relating to requiring the sale of shares or obligations, or requiring the institution to be acquired by or combine with another institution).
(B) The action described in paragraph (2)(B)(i) (relating to restricting transactions with affiliates).
(C) The action described in paragraph (2)(C) (relating to restricting interest rates).
1-400.64
(4) (A) The insured depository institution shall not do any of the following without the prior written approval of the appropriate Federal banking agency:
(i) Pay any bonus to any senior executive officer.
(ii) Provide compensation to any senior executive officer at a rate exceeding that officer’s average rate of compensation (excluding bonuses, stock options, and profit-sharing) during the 12 calendar months preceding the calendar month in which the institution became undercapitalized.
(B) The appropriate Federal banking agency shall not grant any approval under subparagraph (A) with respect to an institution that has failed to submit an acceptable capital restoration plan.
1-400.65
(5) The agency may impose 1 or more of the restrictions prescribed by regulation under subsection (i) if the agency determines that those restrictions are necessary to carry out the purpose of this section.
(6) Before the agency or Corporation makes a determination under paragraph (2)(I) with respect to an affiliate that is a broker, dealer, government securities broker, government securities dealer, investment company, or investment adviser, the agency or Corporation shall consult with the Securities and Exchange Commission and, in the case of any other affiliate which is subject to any financial responsibility or capital requirement, any other appropriate regulator of such affiliate with respect to the proposed determination of the agency or the Corporation and actions pursuant to such determination.
1-400.66
(g) More stringent treatment based on other supervisory criteria.
(1) If the appropriate Federal banking agency determines (after notice and an opportunity for hearing) that an insured depository institution is in an unsafe or unsound condition or, pursuant to section 8(b)(8), deems the institution to be engaging in an unsafe or unsound practice, the agency may
(A) if the institution is well capitalized, reclassify the institution as adequately capitalized;
(B) if the institution is adequately capitalized (but not well capitalized), require the institution to comply with 1 or more provisions of subsections (d) and (e), as if the institution were undercapitalized; or
(C) if the institution is undercapitalized, take any 1 or more actions authorized under subsection (f)(2) as if the institution were significantly undercapitalized.
(2) Any plan required under paragraph (1) shall specify the steps that the insured depository institution will take to correct the unsafe or unsound condition or practice. Capital restoration plans shall not be required under paragraph (1)(B).
1-400.67
(h) Provisions applicable to critically undercapitalized institutions.
(1) Any critically undercapitalized insured depository institution shall comply with restrictions prescribed by the Corporation under subsection (i).
(2) (A) A critically undercapitalized insured depositary institution shall not, beginning 60 days after becoming critically undercapitalized, make any payment of principal or interest on the institution’s subordinated debt.
(B) The Corporation may make exceptions to subparagraph (A) if—
(i) the appropriate Federal banking agency has taken action with respect to the insured depository institution under paragraph (3)(A)(ii); and
(ii) the Corporation determines that the exception would further the purpose of this section.
(C) Until July 15, 1996, subparagraph (A) shall not apply with respect to any subordinated debt outstanding on July 15, 1991, and not extended or otherwise renegotiated after July 15, 1991.
(D) Subparagraph (A) does not prevent unpaid interest from accruing on subordinated debt under the terms of that debt, to the extent otherwise permitted by law.
1-400.68
(3) (A) The appropriate Federal banking agency shall, not later than 90 days after an insured depository institution becomes critically undercapitalized
(i) appoint a receiver (or, with the concurrence of the Corporation, a conservator) for the institution; or
(ii) take such other action as the agency determines, with the concurrence of the Corporation, would better achieve the purpose of this section, after documenting why the action would better achieve that purpose.
(B) Any determination by an appropriate Federal banking agency under subparagraph (A)(ii) to take any action with respect to an insured depository institution in lieu of appointing a conservator or receiver shall cease to be effective not later than the end of the 90-day period beginning on the date that the determination is made and a conservator or receiver shall be appointed for that institution under subparagraph (A)(i) unless the agency makes a new determination under subparagraph (A)(ii) at the end of the effective period of the prior determination.
1-400.69
(C) (i) Notwithstanding subparagraphs (A) and (B), the appropriate Federal banking agency shall appoint a receiver for the insured depository institution if the institution is critically undercapitalized on average during the calendar quarter beginning 270 days after the date on which the institution became critically undercapitalized.
(ii) Notwithstanding clause (i), the appropriate Federal banking agency may continue to take such other action as the agency determines to be appropriate in lieu of such appointment if—
(I) the agency determines, with the concurrence of the Corporation, that (aa) the insured depository institution has positive net worth, (bb) the insured depository institution has been in substantial compliance with an approved capital restoration plan which requires consistent improvement in the institution’s capital since the date of the approval of the plan, (cc) the insured depository institution is profitable or has an upward trend in earnings the agency projects as sustainable, and (dd) the insured depository institution is reducing the ratio of nonperforming loans to total loans; and
(II) the head of the appropriate Federal banking agency and the Chairperson of the Board of Directors both certify that the institution is viable and not expected to fail.
1-400.7
(i) Restricting activities of critically undercapitalized institutions. To carry out the purpose of this section, the Corporation shall, by regulation or order—
(1) restrict the activities of any critically undercapitalized insured depository institution; and
(2) at a minimum, prohibit any such institution from doing any of the following without the Corporation’s prior written approval:
(A) Entering into any material transaction other than in the usual course of business, including any investment, expansion, acquisition, sale of assets, or other similar action with respect to which the depository institution is required to provide notice to the appropriate Federal banking agency.
(B) Extending credit for any highly leveraged transaction.
(C) Amending the institution’s charter or bylaws, except to the extent necessary to carry out any other requirement of any law, regulation, or order.
(D) Making any material change in accounting methods.
(E) Engaging in any covered transaction (as defined in section 23A(b) of the Federal Reserve Act).
(F) Paying excessive compensation or bonuses.
(G) Paying interest on new or renewed liabilities at a rate that would increase the institution’s weighted average cost of funds to a level significantly exceeding the prevailing rates of interest on insured deposits in the institution’s normal market areas.
1-400.71
(j) Certain government-controlled institutions exempted . Subsections (e) through (i) (other than paragraph (3) of subsection (e)) shall not apply—
(1) to an insured depository institution for which the Corporation or the Resolution Trust Corporation is conservator; or
(2) to a bridge bank, none of the voting securities of which are owned by a person or agency other than the Corporation or the Resolution Trust Corporation.
1-400.72
(k) Reviews required when Deposit Insurance Fund incurs losses.
(1) If the Deposit Insurance Fund incurs a material loss with respect to an insured depository institution on or after July 1, 1993, the inspector general of the appropriate Federal banking agency shall—
(A) make a written report to that agency reviewing the agency’s supervision of the institution (including the agency’s implementation of this section), which shall—
(i) ascertain why the institution’s problems resulted in a material loss to the Deposit Insurance Fund; and
(ii) make recommendations for preventing any such loss in the future; and
(B) provide a copy of the report to—
(i) the Comptroller General of the United States;
(ii) the Corporation (if the agency is not the Corporation);
(iii) in the case of a State depository institution, the appropriate State banking supervisor; and
(iv) upon request by any Member of Congress, to that Member.
1-400.73
(2) For purposes of this subsection:
(A) the Deposit Insurance Fund incurs a loss with respect to an insured depository institution—
(i) if the Corporation provides any assistance under section 13(c) with respect to that institution; and—
(I) it is not substantially certain that the assistance will be fully repaid not later than 24 months after the date on which the Corporation initiated the assistance; or
(II) the institution ceases to repay the assistance in accordance with its terms; or
(ii) if the Corporation is appointed receiver of the institution, and it is or becomes apparent that the present value of the outlays of the Deposit Insurance Fund with respect to that institution will exceed the present value of receivership dividends or other payments on the claims held by the Corporation.
(B) A loss is material if it exceeds the greater of—
(i) $25,000,000; or
(ii) 2 percent of the institution’s total assets at the time the Corporation initiated assistance under section 13(c) or was appointed receiver.
1-400.74
(3) The inspector general of the appropriate Federal banking agency shall comply with paragraph (1) expeditiously, and in any event (except with respect to paragraph (1)(B)(iv)) as follows:
(A) If the institution is described in paragraph (2)(A)(i), during the 6-month period beginning on the earlier of—
(i) the date on which the institution ceases to repay assistance under section 13(c) in accordance with its terms, or
(ii) the date on which it becomes apparent that the assistance will not be fully repaid during the 24-month period described in paragraph (2)(A)(i).
(B) If the institution is described in paragraph (2)(A)(ii), during the 6-month period beginning on the date on which it becomes apparent that the present value of the outlays of the Deposit Insurance Fund with respect to that institution will exceed the present value of receivership dividends or other payments on the claims held by the Corporation.
1-400.75
(4) (A) The appropriate Federal banking agency shall disclose the report upon request under section 552 of title 5, United States Code, without excising—
(i) any portion under section 552(b)(5) of that title; or
(ii) any information about the insured depository institution under paragraph (4) (other than trade secrets) or paragraph (8) of section 552(b) of that title.
(B) Subparagraph (A) does not require the agency to disclose the name of any customer of the insured depository institution (other than an institution-affiliated party), or information from which such a person’s identity could reasonably be ascertained.
(5) The Comptroller General of the United States shall, under such conditions as the Comptroller General determines to be appropriate, review reports made under paragraph (1) and recommend improvements in the supervision of insured depository institutions (including the implementation of this section).
1-400.76
(6) During the period beginning on July 1, 1993, and ending on June 30, 1997, a loss incurred by the Corporation with respect to an insured depository institution—
(A) with respect to which the Corporation initiates assistance under section 13(c) during the period in question, or
(B) for which the Corporation was appointed receiver during the period in question,
is material for purposes of this subsection only if that loss exceeds the greater of $25,000,000 or the applicable percentage of the institution’s total assets at that time, set forth in the following table:
Applicable Percentage of the Institution’s Total Assets
For the following period: The applicable percentage is:
 July 1, 1993-June 30, 1994 7 percent
 July 1, 1994-June 30, 1995 5 percent
 July 1, 1995-June 30, 1996 4 percent
 July 1, 1996-June 30, 1997 3 percent
1-400.77
(l) Implementation.
(1) Each appropriate Federal banking agency shall prescribe such regulations (in consultation with the other Federal banking agencies), issue such orders, and take such other actions as are necessary to carry out this section.
(2) Any determination or concurrence by an appropriate Federal banking agency or the Corporation required under this section shall be written.
1-400.78
(m) Other authority not affected. This section does not limit any authority of an appropriate Federal banking agency, the Corporation, or a State to take action in addition to (but not in derogation of) that required under this section.
1-400.79
(n) Administrative review of dismissal orders.
(1) A director or senior executive officer dismissed pursuant to an order under subsection (f)(2)(F)(ii) may obtain review of that order by filing a written petition for reinstatement with the appropriate Federal banking agency not later than 10 days after receiving notice of the dismissal.
1-400.8
(2) (A) The agency shall give the petitioner an opportunity to—
(i) submit written materials in support of the petition; and
(ii) appear, personally or through counsel, before 1 or more members of the agency or designated employees of the agency.
(B) The agency shall—
(i) schedule the hearing referred to in subparagraph (A)(ii) promptly after the petition is filed; and
(ii) hold the hearing not later than 30 days after the petition is filed, unless the petitioner requests that the hearing be held at a later time.
(C) Not later than 60 days after the date of the hearing, the agency shall—
(i) by order, grant or deny the petition;
(ii) if the order is adverse to the petitioner, set forth the basis for the order; and
(iii) notify the petitioner of the order.
1-400.81
(3) The petitioner shall bear the burden of proving that the petitioner’s continued employment would materially strengthen the insured depository institution’s ability—
(A) to become adequately capitalized, to the extent that the order is based on the institution’s capital level or failure to submit or implement a capital restoration plan; and
(B) to correct the unsafe or unsound condition or unsafe or unsound practice, to the extent that the order is based on subsection (g)(1).
1-400.82
(o) Transition rules for savings associations. Subsections (e)(2), (f), and (h) of this section shall not apply before July 1, 1994, to any insured savings association if—
(1) before December 19, 1991—
(A) the savings association had submitted a plan meeting the requirements of section 5(t)(6)(A)(ii) of the Home Owners’ Loan Act; and
(B) the Director of the Office of Thrift Supervision had accepted the plan;
(2) the plan remains in effect; and
(3) the savings association remains in compliance with the plan or is operating under a written agreement with the appropriate Federal banking agency.
[12 USC 1831o. As added by act of Dec. 19, 1991 (105 Stat. 2253) and amended by acts of Oct. 28, 1992 (106 Stat. 4079); Sept. 23, 1994 (108 Stat. 2291); Oct. 19, 1996 (110 Stat. 3831); Feb. 15, 2006 (119 Stat. 3615, 3616); and July 21, 2010 (124 Stat. 1938).]

*
Section 131(e)(1) of the Federal Deposit Insurance Corporation Improvement Act of 1991 (105 Stat. 2267) reads as follows:
(e) Transition rule regarding current directors and senior executive officers. (1) Section 38(f)(2)(F)(ii) of the Federal Deposit Insurance Act (as added by subsection (a)) shall not apply with respect to—
(A) any director whose current term as a director commenced on or before the date of enactment of this Act and has not been extended—
(i) after that date of enactment, or
(ii) to evade section 38(f)(2)(F)(ii); or
(B) any senior executive officer who accepted employment in his or her current position on or before the date of enactment of this Act and whose contract of employment has not been renewed or renegotiated—
(i) after that date of enactment, or
(ii) to evade section 38(f)(2)(F)(ii).
Section 131(e)(2) of the Federal Deposit Insurance Corporation Improvement Act of 1991 (105 Stat. 2267) reads as follows:
(2)  Section 38(f)(4) of the Federal Deposit Insurance Act (as added by subsection (a)) shall not apply with respect to any senior executive officer who accepted employment in his or her current position on or before the date of enactment of this Act and whose contract of employment has not been renewed or renegotiated—
(A) after that date of enactment, or
(B) to evade section 38(f)(4).
Back to top