§ 263.83. Issuance of capital directives.
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/us/cfr/t12/s§ 263.83·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)Notice of intent to issue directive. If a state member bank or bank holding company is operating with less than the minimum level of capital established in the Board's Capital Adequacy Guidelines, or as otherwise established under the procedures described in § 263.85, or if the Board has determined that the current capital level of a savings and loan holding company is not adequate, the Board may issue and serve upon such state member bank, bank holding company, or savings and loan holding company written notice of the Board's intent to issue a directive to require the bank, bank holding company, or savings and loan holding company to achieve and maintain adequate capital within a specified time period.
(b)Contents of notice. The notice of intent to issue a directive shall include:
(1)The required minimum level of capital to be achieved or maintained by the institution;
(2)Its current level of capital;
(3)The proposed increase in capital needed to meet the minimum requirements;
(4)The proposed date or schedule for meeting these minimum requirements;
(5)When deemed appropriate, specific details of a proposed plan for meeting the minimum capital requirements; and
(6)The date for a written response by the bank or bank holding company to the proposed directive, which shall be at least 14 days from the date of issuance of the notice unless the Board determines a shorter period is necessary because of the financial condition of the bank or bank holding company.
(c)Response to notice. The bank or bank holding company may file a written response to the notice within the time period set by the Board. The response may include:
(1)An explanation why a directive should not be issued;
(2)Any proposed modification of the terms of the directive;
(3)Any relevant information, mitigating circumstances, documentation or other evidence in support of the institution's position regarding the proposed directive; and
(4)The institution's plan for attaining the required level of capital.
(d)Failure to file response. Failure by the bank or bank holding company to file a written response to the notice of intent to issue a directive within the specified time period shall constitute a waiver of the opportunity to respond and shall constitute consent to the issuance of such directive.
(e)Board consideration of response. After considering the response of the bank or bank holding company, the Board may:
(1)Issue the directive as originally proposed or in modified form;
(2)Determine not to issue a directive and so notify the bank or bank holding company; or
(3)Seek additional information or clarification of the response by the bank or bank holding company.
(f)Contents of directive. Any directive issued by the Board may order the bank or bank holding company to:
(1)Achieve or maintain the minimum capital requirement established pursuant to the Board's Capital Adequacy Guidelines or the procedures in § 263.85 of this subpart by a certain date;
(2)Adhere to a previously submitted plan or submit for approval and adhere to a plan for achieving the minimum capital requirement by a certain date;
(3)Take other specific action as the Board directs to achieve the minimum capital levels, including requiring a reduction of assets or asset growth or restriction on the payment of dividends; or
(4)Take any combination of the above actions.
(g)Request for reconsideration of directive. Any state member bank or bank holding company, upon a change in circumstances, may request the Board to reconsider the terms of a directive and may propose changes in the plan under which it is operating to meet the required minimum capital level. The directive and plan continue in effect while such request is pending before the Board. [56 FR 38052, Aug. 9, 1991, as amended at 76 FR 56604, Sept. 13, 2011]
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§ 263.83
Issuance of capital directives.
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