Sec. 13. Savings and loan holding company acquisitions and merger transactions
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Section 10(e) of the Home Owners’ Loan Act ( 12 U.S.C. 1467a(e) ) is amended by adding at the end the following: The Board may not approve an application under this section unless the Board determines that the public benefits of the proposed transaction outweigh the expected costs. In evaluating the expected costs of the proposed transaction under subparagraph (A), the Board shall consider— the probable effect of the proposed transaction on the cost and availability of financial products and services; the probable effect of branch closures on customers of each company involved in the proposed transaction; the probable effect of the proposed transaction on relevant local economies, including employment losses relating to branch closures and impacts on job quality; and any other cost of the proposed transaction that the Board considers pursuant to this subsection.
The Board shall deny an application under this section if either the lead insured depository institution of the applicant or the insured depository institution that would be the lead insured depository institution of the resulting company following consummation of the proposed transaction has received a rating lower than outstanding record of meeting community credit needs on— two out of the three most recent written evaluations required under section 807 of the Community Reinvestment Act of 1977 ( 12 U.S.C. 2906 ); or if three such evaluations are not available, the most recent written evaluation required under such section.
In reviewing any application filed under this paragraph, the Board shall require— submission to the appropriate Federal financial supervisory agency of a community benefits plan; that the company consult with community-based organizations and other community stakeholders in developing the community benefits plan; and a public hearing to be held if any bank that would be controlled by the resulting company has received a substantial noncompliance in meeting community credit needs or needs to improve record of meeting community credit needs rating in any assessment area during the last examination of such institution conducted pursuant to the Community Reinvestment Act of 1977.
For purposes of this paragraph, community benefits plan means a plan that provides measurable goals for future amounts of safe and sound loans, investments, services, and other financial products for low- and moderate-income communities and other distressed or underserved communities. In every case, the Board shall take into consideration the extent to which a proposed acquisition, merger, or consolidation would result in greater or more concentrated risks to the stability of the United States banking or financial system.
In considering the risk to the stability of the United States banking or financial system, the Board shall take into account— the insured depository institutions or bank holding companies that might acquire the resulting company if it were to fail after consummation of the proposed transaction; and whether such an acquisition would result in greater or more concentrated risks to the stability of the United States banking or financial system. The Board shall not approve any proposed acquisition, merger, or consolidation unless the company is well capitalized and would remain well capitalized upon consummation of the proposed transaction.
A company is well capitalized if— with respect to a company that has total consolidated assets of $10,000,000,000 or more, it exceeds the required minimum level for each relevant capital measure (as determined by the Board) by at least 50 percent of such minimum; and with respect to a company that has total consolidated assets of less than $10,000,000,000, it meets the required capital levels for well capitalized savings and loan holding companies established by the Board. If a resulting company will have total consolidated assets greater than or equal to $100,000,000,000, the Board shall evaluate the pro forma balance sheet of the resulting company to determine whether such resulting company would have the capital, on a total consolidated basis, necessary to absorb losses as a result of adverse economic conditions.
The Board shall deny a notice submitted pursuant to this subsection if the resulting company would not remain at least adequately capitalized in severely adverse economic conditions under the evaluation described in subparagraph (A). The Board shall not approve any proposed acquisition, merger, or consolidation unless the company is well managed and would remain well managed upon consummation of the proposed transaction. In this paragraph, the term covered transaction means an acquisition, merger, or consolidation under this section in which the resulting company would have more than $100,000,000,000 in total assets.
An application for approval of a covered transaction shall include the name of each individual who will serve on the board of directors or serve as a senior executive officer of the resulting company. The Board shall make a written evaluation of the competence, experience, character, and integrity of each individual described in clause (i). The Board shall not approve a covered transaction if the Board determines that the competence, experience, character, or integrity of any individual described in clause
(i)indicates that it would not be in the best interests of the shareholders of the bank holding company or in the best interests of the public to permit the individual to be employed by, or associated with, the resulting company. The Board shall make any written evaluation described in clause
(ii)publicly available after the date on which the Board approves or denies a covered transaction. In every case, the Board shall consider the competitive effects of the proposed transaction on the market for— savings association deposits; loans to small businesses, using data reported under the Community Reinvestment Act of 1977 for loans to small businesses with less than $1,000,000 in gross annual revenue, and any other data the Board deems appropriate to collect for this purpose; home mortgage loans, using data reported under the Home Mortgage Disclosure Act of 1975 for first-lien mortgage loans for single family homes, and any other data the Board deems appropriate to collect for this purpose; and any other financial product that comprises a substantial portion of the activities of each bank or savings association involved in the proposed merger transaction, as determined by the Board. The Board shall consider the competitive effects of the proposed transaction on the product markets identified in clause
(i)with respect to each of the following geographic markets: Each State in which the resulting company would operate. Each core-based statistical area in which the resulting company would operate. Each county in which the resulting company would operate. Any other geographic area the Board deems appropriate. When evaluating the competitive effects of the proposed transaction, the Board shall apply higher scrutiny to any markets in which the transaction would result in a Herfindahl-Hirschman Index over 1800 and an increase of more than 200. Nothing in clause
(i)may be construed as limiting the authority of the Board to apply higher scrutiny to any markets in which the transaction would result in an Herfindahl-Hirschman Index under 1800 or an increase of less than 200. When evaluating the competitive effects of the proposed transaction, the Board shall consider the extent to which— the resulting institution could receive a too big to fail subsidy; the proposed transaction could create or intensify conflicts of interest; the proposed transaction could diminish product quality, including consumer privacy and access to branch offices; the proposed transaction could lead to the exploitation of consumers’ data; the proposed transaction could impair the resilience of the United States or global financial systems; common ownership of firms in the relevant markets could impair competition; the proposed transaction could impact wages and working standards in the relevant markets; the proposed transaction could create or amplify existing climate and environmental risks; and any other factors that the Board deems appropriate could impair competition. In any application under this section— a company shall— disclose whether any persons employed by, representing, or acting on behalf of the company have had verbal or written communications with the Board, a Federal reserve bank, or any other Federal regulatory agency regarding the proposal; and identify the dates and the names of individuals involved in, and the content of, all communications in described in subclause (I); and the chief executive officer and chief legal officer of a company shall certify that no persons employed by, representing, or acting on behalf of the company asked for or received assurances from the Board, a Federal reserve bank, or any other Federal regulatory agency that the proposal would be approved of that there would be no barriers to such approval. A company shall update the disclosure and certification described in subparagraph
(A)as needed within 2 business days of any communication that occurs before the Board makes a final decision on a proposal. The Board shall publish on the website of the Board the disclosure, certification, and any updates required under this paragraph within 1 business day of receipt. Notwithstanding paragraphs (8)(A), (8)(B), (8)(C), and (8)(E)(iii) of this subsection, if the Financial Stability Oversight Council determines by a 2/3 vote that a proposed acquisition, merger, or consolidation under this subsection is necessary to preserve the stability of the United States banking or financial system, the Board may approve such acquisition, merger, or consolidation. Not later than 10 days after the approval of an application under this section by the Board, or the denial of a request for reconsideration of such an application by the Board, an individual may file a civil action in the appropriate United States district court to review such approval, regardless of whether the individual submitted a comment or otherwise participated in the application process. In any such action, the court shall review de novo the issues presented, consider the matter on an expedited basis, and issue a decision within 30 days. An individual who files a civil action under this paragraph may not be required to pay the costs of the Board or any party to the application that is the subject of the civil action. The proposed acquisition, merger, or consolidation that is the subject of a civil action under this paragraph may not be consummated until the court issues a final decision in such action. .
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Sec. 13
Savings and loan holding company acquisitions and merger transactions
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