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12 U.S.C. § 1835 — Insured depository institution capital requirements for transfers of small business obligations
Federal law — U.S. Code and appendices · legal_authorities
**(a) Accounting principles** The accounting principles applicable to the transfer of a small business loan or a lease of personal property with recourse contained in reports or statements required to be filed with Federal banking agencies by a qualified insured depository institution shall be consistent with generally accepted accounting principles.
**(b) Capital and reserve requirements** With respect to the transfer of a small business loan or lease of personal property with recourse that is a sale under generally accepted accounting principles, each qualified insured depository institution shall—
(1) establish and maintain a reserve equal to an amount sufficient to meet the reasonable estimated liability of the institution under the recourse arrangement; and
(2) include, for purposes of applicable capital standards and other capital measures, only the amount of the retained recourse in the risk-weighted assets of the institution.
**(c) Qualified institutions criteria** An insured depository institution is a qualified insured depository institution for purposes of this section if, without regard to the accounting principles or capital requirements referred to in subsections (a) and (b), the institution is—
(1) well capitalized; or
(2) with the approval, by regulation or order, of the appropriate Federal banking agency, adequately capitalized.
**(d) Aggregate amount of recourse** The total outstanding amount of recourse retained by a qualified insured depository institution with respect to transfers of small business loans and leases of personal property under subsections (a) and (b) shall not exceed—
(1) 15 percent of the risk-based capital of the institution; or
(2) such greater amount, as established by the appropriate Federal banking agency by regulation
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Source file: Laws/federal/codes/united-states-code/title-12/section-1835-insured-depository-institution-capital-requirements-for-transfers-of-sma--54cdfcc514.md
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Source location: Title 12, Chapter 16, § 1835; chapter-016-federal-deposit-insurance-corporation.md
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**(a) Accounting principles** The accounting principles applicable to the transfer of a small business loan or a lease of personal property with recourse contained in reports or statements required to be filed with Federal banking agencies by a qualified insured depository institution shall be consistent with generally accepted accounting principles.
**(b) Capital and reserve requirements** With respect to the transfer of a small business loan or lease of personal property with recourse that is a sale under generally accepted accounting principles, each qualified insured depository institution shall—
(1) establish and maintain a reserve equal to an amount sufficient to meet the reasonable estimated liability of the institution under the recourse arrangement; and
(2) include, for purposes of applicable capital standards and other capital measures, only the amount of the retained recourse in the risk-weighted assets of the institution.
**(c) Qualified institutions criteria** An insured depository institution is a qualified insured depository institution for purposes of this section if, without regard to the accounting principles or capital requirements referred to in subsections (a) and (b), the institution is—
(1) well capitalized; or
(2) with the approval, by regulation or order, of the appropriate Federal banking agency, adequately capitalized.
**(d) Aggregate amount of recourse** The total outstanding amount of recourse retained by a qualified insured depository institution with respect to transfers of small business loans and leases of personal property under subsections (a) and (b) shall not exceed—
(1) 15 percent of the risk-based capital of the institution; or
(2) such greater amount, as established by the appropriate Federal banking agency by regulation or order.
**(e) Institutions that cease to be qualified or exceed aggregate limits** If an insured depository institution ceases to be a qualified insured depository institution or exceeds the limits under subsection (d), this section shall remain applicable to any transfers of small business loans or leases of personal property that occurred during the time that the institution was qualified and did not exceed such limit.
**(f) Prompt corrective action not affected** The capital of an insured depository institution shall be computed without regard to this section in determining whether the institution is adequately capitalized, undercapitalized, significantly undercapitalized, or critically undercapitalized under section 1831o of this title.
**(g) Regulations required** Not later than 180 days after September 23, 1994, each appropriate Federal banking agency shall promulgate final regulations implementing this section.
**(h) Alternative system permitted**
(1) **In general** — At the discretion of the appropriate Federal banking agency, this section shall not apply if the regulations of the agency provide that the aggregate amount of capital and reserves required with respect to the transfer of small business loans and leases of personal property with recourse does not exceed the aggregate amount of capital and reserves that would be required under subsection (b).
(2) **Existing transactions not affected** — Notwithstanding paragraph (1), this section shall remain in effect with respect to transfers of small business loans and leases of personal property with recourse by qualified insured depository institutions occurring before the effective date of regulations referred to in paragraph (1).
**(i) Definitions** For purposes of this section—
(1) the term “adequately capitalized” has the same meaning as in section 1831o(b) of this title;
(2) the term “appropriate Federal banking agency” has the same meaning as in [section 1813 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1813&num=0&edition=prelim);
(3) the term “capital standards” has the same meaning as in section 1831o(c) of this title;
(4) the term “Federal banking agencies” has the same meaning as in [section 1813 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1813&num=0&edition=prelim);
(5) the term “insured depository institution” has the same meaning as in [section 1813 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1813&num=0&edition=prelim);
(6) the term “other capital measures” has the meaning as in section 1831o(c) of this title;
(7) the term “recourse” has the meaning given to such term under generally accepted accounting principles;
(8) the term “small business” means a business that meets the criteria for a small business concern established by the Small Business Administration under [section 632(a) of title 15](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section632/a&num=0&edition=prelim); and
(9) the term “well capitalized” has the same meaning as in section 1831o(b) of this title.
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Federal law — U.S. Code and appendices · legal_authorities
As used in this chapter—
**(a) Definitions of bank and related terms**
(1) **Bank** — The term “bank”—
(A) means any national bank and State bank, and any Federal branch and insured branch;
(B) includes any former savings association.
(2) **State bank** — The term “State bank” means any bank, banking association, trust company, savings bank, industrial bank (or similar depository institution which the Board of Directors finds to be operating substantially in the same manner as an industrial bank), or other banking institution which—
(A) is engaged in the business of receiving deposits, other than trust funds (as defined in this section); and
(B) is incorporated under the laws of any State or which is operating under the Code of Law for the District of Columbia,
including any cooperative bank or other unincorporated bank the deposits of which were insured by the Corporation on the day before August 9, 1989.
(3) **State** — The term “State” means any State of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Northern Mariana Islands.
**(b) Definition of savings associations and related terms**
(1) **Savings association** — The term “savings association” means—
(A) any Federal savings association;
(B) any State savings association; and
(C) any corporation (other than a bank) that the Board of Directors and the Comptroller of the Currency jointly determine to be operating in substantially the same manner as a savings association.
(2) **Federal savings association** — The term “Federal savings association” means any Federal savings association or Federal savings bank which is chartered under [section 1464 of t
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Federal law — U.S. Code and appendices · legal_authorities
This chapter may be cited as the “Securities Exchange Act of 1934.”
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Federal law — U.S. Code and appendices · legal_authorities
Page 1213
TITLE 12—BANKS AND BANKING
§ 1835
opment bank and thereafter by the Commu-
nity Investment Board from nominations re-
ceived from the community; and
(B) are appointed for a single term of 2
years, except that, of the initial members
appointed to the Community Investment
Board, 1⁄3 shall be appointed for a term of 8
months, 1⁄3 shall be appointed for a term of 16
months, and 1⁄3 shall be appointed for a term
of 24 months, as designated by the board of
directors of the community development
bank at the time of the appointment;
(2) 1⁄3 of the members of the community de-
velopment bank’s board of directors are ap-
pointed from among individuals nominated by
the Community Investment Board; and
(3) the bylaws of the community develop-
ment bank require that the board of directors
of the bank meet with the Community Invest-
ment Board at least once every 3 months.
(c) Community development corporation require-
ments
Any community development corporation, or
community development unit within any in-
sured depository institution meets the require-
ments of this subsection if the corporation or
unit provides the same or greater, as determined
by the appropriate Federal banking agency,
community participation in the activities of
such corporation or unit as would be provided by
a Community Investment Board under sub-
section (b) if such corporation or unit were a
community development bank.
(d) Adequate dispersal requirement
The appropriate Federal banking agency may
approve the establishment of a community de-
velopment organization under this subtitle only
upon finding that the distressed community is
not adequately served by an existing community
development organization.
(e) Definitions
For purposes of this section—
(1) Community develop
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