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12 U.S.C. § 4616 — Critical capital levels
Federal law — U.S. Code and appendices · legal_authorities
**(a) Enterprises** For purposes of this subchapter, the critical capital level for each enterprise shall be the sum of—
(1) 1.25 percent of the aggregate on-balance sheet assets of the enterprise, as determined in accordance with generally accepted accounting principles;
(2) 0.25 percent of the unpaid principal balance of outstanding mortgage-backed securities and substantially equivalent instruments issued or guaranteed by the enterprise that are not included in paragraph (1); and
(3) 0.25 percent of other off-balance sheet obligations of the enterprise not included in paragraph (2) (excluding commitments in excess of 50 percent of the average dollar amount of the commitments outstanding each quarter over the preceding 4 quarters), except that the Director shall adjust such percentage to reflect differences in the credit risk of such obligations in relation to the instruments included in paragraph (2).
**(b) Federal Home Loan Banks**
(1) **In general** — For purposes of this subchapter, the critical capital level for each Federal Home Loan Bank shall be such amount of capital as the Director shall, by regulation, require.
(2) **Consideration of other critical capital levels** — In establishing the critical capital level under paragraph (1) for the Federal Home Loan Banks, the Director shall take due consideration of the critical capital level established under subsection (a) for the enterprises, with such modifications as the Director determines to be appropriate to reflect the difference in operations between the banks and the enterprises.
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Source location: Title 12, Chapter 46, § 4616; chapter-046-government-sponsored-enterprises.md
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**(a) Enterprises** For purposes of this subchapter, the critical capital level for each enterprise shall be the sum of—
(1) 1.25 percent of the aggregate on-balance sheet assets of the enterprise, as determined in accordance with generally accepted accounting principles;
(2) 0.25 percent of the unpaid principal balance of outstanding mortgage-backed securities and substantially equivalent instruments issued or guaranteed by the enterprise that are not included in paragraph (1); and
(3) 0.25 percent of other off-balance sheet obligations of the enterprise not included in paragraph (2) (excluding commitments in excess of 50 percent of the average dollar amount of the commitments outstanding each quarter over the preceding 4 quarters), except that the Director shall adjust such percentage to reflect differences in the credit risk of such obligations in relation to the instruments included in paragraph (2).
**(b) Federal Home Loan Banks**
(1) **In general** — For purposes of this subchapter, the critical capital level for each Federal Home Loan Bank shall be such amount of capital as the Director shall, by regulation, require.
(2) **Consideration of other critical capital levels** — In establishing the critical capital level under paragraph (1) for the Federal Home Loan Banks, the Director shall take due consideration of the critical capital level established under subsection (a) for the enterprises, with such modifications as the Director determines to be appropriate to reflect the difference in operations between the banks and the enterprises.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Mandatory actions**
(1) **Required monitoring** — The Director shall—
(A) closely monitor the condition of any undercapitalized regulated entity;
(B) closely monitor compliance with the capital restoration plan, restrictions, and requirements imposed on an undercapitalized regulated entity under this section; and
(C) periodically review the plan, restrictions, and requirements applicable to an undercapitalized regulated entity to determine whether the plan, restrictions, and requirements are achieving the purpose of this section.
(2) **Capital restoration plan** — A regulated entity that is classified as undercapitalized shall, within the time period provided in section 4622(b) and (d) of this title, submit to the Director a capital restoration plan that complies with [section 4622 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4622&num=0&edition=prelim) and carry out the plan after approval.
(3) **Restriction on capital distributions** — A regulated entity that is classified as undercapitalized may not make any capital distribution that would result in the regulated entity being reclassified as significantly undercapitalized or critically undercapitalized.
(4) **Restriction of asset growth** — An undercapitalized regulated entity 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 Director has accepted the capital restoration plan of the regulated entity;
(B) any increase in total assets is consistent with the capital restoration plan; and
(C) the ratio of tangible equity to assets of the regulated entity increases during the calendar quarter at a rate sufficient to enable the regulated entit
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 4618
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Notice** Before taking any action referred to in subsection (b), the Director shall provide to the regulated entity written notice of the proposed action, which states the reasons for the proposed action and the information on which the proposed action is based.
**(b) Applicability** The requirements of subsection (a) shall apply to the following actions:
(1) Classification or reclassification of a regulated entity within a particular capital classification under [section 4614 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4614&num=0&edition=prelim).
(2) Any discretionary supervisory action pursuant to [section 4615 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4615&num=0&edition=prelim).
(3) Any discretionary supervisory action pursuant to [section 4616 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4616&num=0&edition=prelim) except a decision to appoint a conservator under section 4616(b)(6) 11 See References in Text note below. of this title.
Notice of classification under paragraph (1) and notice of supervisory actions under paragraph (2) or (3) may be provided together in a single notice under subsection (a).
**(c) Response period**
(1) **In general** — During the 30-day period beginning on the date that a regulated entity is provided notice under subsection (a) of a proposed action, the regulated entity may submit to the Director any information relevant to the action that the regulated entity considers appropriate for consideration by the Director in determining whether to take such action. The Director may, at the discretion of the Director, hold an informal administrative hearing to receive and discuss such information
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 4623
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Federal law — U.S. Code and appendices · legal_authorities
Page 1693
TITLE 12—BANKS AND BANKING
§ 4616
(Pub. L. 102–550, title XIII, § 1365, Oct. 28, 1992, 106
Stat. 3978; Pub. L. 110–289, div. A, title I, § 1143,
July 30, 2008, 122 Stat. 2732.)
Editorial Notes
AMENDMENTS
2008—Subsec. (a)(1). Pub. L. 110–289, § 1143(4)(B), added
par. (1). Former par. (1) redesignated (2).
Pub. L. 110–289, § 1143(2), substituted ‘‘A regulated en-
tity’’ for ‘‘An enterprise’’.
Subsec. (a)(2). Pub. L. 110–289, § 1143(4)(A), redesig-
nated par. (1) as (2). Former par. (2) redesignated (3).
Pub. L. 110–289, § 1143(1), (2), substituted ‘‘the regu-
lated entity’’ for ‘‘the enterprise’’ and ‘‘A regulated en-
tity’’ for ‘‘An enterprise’’.
Subsec. (a)(3). Pub. L. 110–289, § 1143(4)(A), redesig-
nated par. (2) as (3).
Subsec. (a)(4), (5). Pub. L. 110–289, § 1143(4)(C), added
pars. (4) and (5).
Subsec. (b). Pub. L. 110–289, § 1143(5)(A), (B), sub-
stituted ‘‘Reclassification’’ for ‘‘Discretionary reclassi-
fication’’ in heading and ‘‘shall’’ for ‘‘may’’ in introduc-
tory provisions.
Pub. L. 110–289, § 1143(1), (3), substituted ‘‘a regulated
entity’’ for ‘‘an enterprise’’ and ‘‘the regulated entity’’
for ‘‘the enterprise’’ in introductory provisions.
Subsec. (b)(1). Pub. L. 110–289, § 1143(1), substituted
‘‘the regulated entity’’ for ‘‘the enterprise’’ in two
places.
Subsec. (b)(2). Pub. L. 110–289, § 1143(5)(C), struck out
‘‘make, in good faith, reasonable efforts necessary to’’
before ‘‘comply with’’ and inserted ‘‘in any material re-
spect’’ before period at end.
Pub. L. 110–289, § 1143(1), substituted ‘‘the regulated
entity’’ for ‘‘the enterprise’’.
Subsec. (c). Pub. L. 110–289, § 1143(6), added subsec. (c)
and struck out former subsec. (c). Prior to amendment,
text read as follows: ‘‘This section shall take effect
upon the ex
Source: Supplied 2024 U.S. Code historical extraction · 12 U.S.C. § 4616
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