12 U.S.C. § 1831c — Assuring consistent oversight of subsidi-

Page 1142 TITLE 12—BANKS AND BANKING § 1831b 1 See References in Text note below. stitution is a savings association on that date, see sec- tion 2704(c) of Pub. L. 104–208, formerly set out as a note under section 1821 of this title. EFFECTIVE DATE OF 1992 AMENDMENT Amendment by Pub. L. 102–550 effective as if included in the Federal Deposit Insurance Corporation Improve- ment Act of 1991, Pub. L. 102–242, as of Dec. 19, 1991, see section 1609(a) of Pub. L. 102–550, set out as a note under section 191 of this title. RIGHT OF STATE TO OPT OUT Pub. L. 105–24, § 3, July 3, 1997, 111 Stat. 239, provided that: ‘‘Nothing in this Act [amending this section and section 36 of this title and enacting provisions set out as a note under section 1811 of this title] alters the right of States under section 525 of Public Law 96–221 [12 U.S.C. 1785 note].’’ § 1831b. Disclosures with respect to certain fed- erally related mortgage loans (a) Identity of beneficiary interest as condition for a loan; report to Corporation No insured depository institution, insured branch of a foreign bank, or mutual savings or cooperative bank which is not an insured deposi- tory institution, shall make any federally re- lated mortgage loan to any agent, trustee, nominee, or other person acting in a fiduciary capacity without the prior condition that the identity of the person receiving the beneficial interest of such loan shall at all times be re- vealed to the insured depository institution, in- sured branch, or bank. At the request of the Cor- poration, the insured depository institution, in- sured branch, or bank shall report to the Cor- poration on the identity of such person and the nature and amount of the loan, discount, or other extension of credit. (b) Enforcement; bank status In addition to other available remedies, this section may be enforced with respect to mutual savings and cooperative banks which are not in- sured depository institutions in accordance with section 1818 of this title, and for such purpose such mutual savings and cooperative banks shall be held and considered to be State non- member insured banks and the appropriate Fed- eral agency with respect to such mutual savings and cooperative banks shall be the Federal De- posit Insurance Corporation. (Sept. 21, 1950, ch. 967, § 2[25], as added Pub. L. 93–533, § 11(a), Dec. 22, 1974, 88 Stat. 1729; amend- ed Pub. L. 95–369, § 6(c)(30), Sept. 17, 1978, 92 Stat. 620; Pub. L. 101–73, title II, § 201(a), Aug. 9, 1989, 103 Stat. 187; Pub. L. 103–325, title VI, § 602(a)(55), Sept. 23, 1994, 108 Stat. 2290.) Editorial Notes AMENDMENTS 1994—Subsec. (a). Pub. L. 103–325 substituted ‘‘the in- sured depository institution, insured branch, or bank’’ for ‘‘the bank’’ in two places. 1989—Pub. L. 101–73 substituted references to insured depository institutions for references to insured banks wherever appearing in this section. 1978—Subsec. (a). Pub. L. 95–369 inserted ‘‘insured branch of a foreign bank’’ after ‘‘No insured bank’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective 180 days after Dec. 22, 1974, see sec- tion 20 of Pub. L. 93–533, set out as a note under section 2601 of this title. EXEMPTIONS; REGULATIONS Pub. L. 93–533, § 11(c), Dec. 22, 1974, 88 Stat. 1729, pro- vided that: ‘‘The Federal Deposit Insurance Corpora- tion or the Federal Home Loan Bank Board as appro- priate may by regulation exempt classes or types of transactions from the provisions added by this section [enacting this section and section 1730f of this title] if the Corporation or the Board determines that the pur- poses of such provisions would not be advanced materi- ally by their application to such transactions.’’ § 1831c. Assuring consistent oversight of subsidi- aries of holding companies (a) Definitions For purposes of this section: (1) Board The term ‘‘Board’’ means the Board of Gov- ernors of the Federal Reserve System. (2) Functionally regulated subsidiary The term ‘‘functionally regulated sub- sidiary’’ has the same meaning as in section 1844(c)(5) 1 of this title. (3) Lead insured depository institution The term ‘‘lead insured depository institu- tion’’ has the same meaning as in section 1841(o)(8) 1 of this title. (b) Examination requirements Subject to subtitle B of the Consumer Finan- cial Protection Act of 2010 [12 U.S.C. 5511 et seq.], the Board shall examine the activities of a nondepository institution subsidiary (other than a functionally regulated subsidiary or a sub- sidiary of a depository institution) of a deposi- tory institution holding company that are per- missible for the insured depository institution subsidiaries of the depository institution hold- ing company in the same manner, subject to the same standards, and with the same frequency as would be required if such activities were con- ducted in the lead insured depository institution of the depository institution holding company. (c) State coordination (1) Consultation and coordination If a nondepository institution subsidiary is supervised by a State bank supervisor or other State regulatory authority, the Board, in con- ducting the examinations required in sub- section (b), shall consult and coordinate with such State regulator. (2) Alternating examinations permitted The examinations required under subsection (b) may be conducted in joint or alternating manner with a State regulator, if the Board determines that an examination of a non- depository institution subsidiary conducted by the State carries out the purposes of this sec- tion. Page 1143 TITLE 12—BANKS AND BANKING § 1831c (d) Appropriate Federal banking agency backup examination authority (1) In general In the event that the Board does not conduct examinations required under subsection (b) in the same manner, subject to the same stand- ards, and with the same frequency as would be required if such activities were conducted by the lead insured depository institution sub- sidiary of the depository institution holding company, the appropriate Federal banking agency for the lead insured depository institu- tion may recommend in writing (which shall include a written explanation of the concerns giving rise to the recommendation) that the Board perform the examination required under subsection (b). (2) Examination by an appropriate Federal banking agency If the Board does not, before the end of the 60-day period beginning on the date on which the Board receives a recommendation under paragraph (1), begin an examination as re- quired under subsection (b) or provide a writ- ten explanation or plan to the appropriate Federal banking agency making such rec- ommendation responding to the concerns raised by the appropriate Federal banking agency for the lead insured depository institu- tion, the appropriate Federal banking agency for the lead insured depository institution may, subject to the Consumer Financial Pro- tection Act of 2010, examine the activities that are permissible for a depository institution subsidiary conducted by such nondepository institution subsidiary (other than a function- ally regulated subsidiary or a subsidiary of a depository institution) of the depository insti- tution holding company as if the nondeposi- tory institution subsidiary were an insured de- pository institution for which the appropriate Federal banking agency of the lead insured de- pository institution was the appropriate Fed- eral banking agency, to determine whether the activities— (A) pose a material threat to the safety and soundness of any insured depository in- stitution subsidiary of the depository insti- tution holding company; (B) are conducted in accordance with ap- plicable Federal law; and (C) are subject to appropriate systems for monitoring and controlling the financial, op- erating, and other material risks of the ac- tivities that may pose a material threat to the safety and soundness of the insured de- pository institution subsidiaries of the hold- ing company. (3) Agency coordination with the Board An appropriate Federal banking agency that conducts an examination pursuant to para- graph (2) shall coordinate examination of the activities of nondepository institution subsidi- aries described in subsection (b) with the Board in a manner that— (A) avoids duplication; (B) shares information relevant to the su- pervision of the depository institution hold- ing company; (C) achieves the objectives of subsection (b); and (D) ensures that the depository institution holding company and the subsidiaries of the depository institution holding company are not subject to conflicting supervisory de- mands by such agency and the Board. (4) Fee permitted for examination costs An appropriate Federal banking agency that conducts an examination or enforcement ac- tion pursuant to this section may collect an assessment, fee, or such other charge from the subsidiary as the appropriate Federal banking agency determines necessary or appropriate to carry out the responsibilities of the appro- priate Federal banking agency in connection with such examination. (e) Referrals for enforcement by appropriate Federal banking agency (1) Recommendation of enforcement action The appropriate Federal banking agency for the lead insured depository institution, based upon its examination of a nondepository insti- tution subsidiary conducted pursuant to sub- section (d), or other relevant information, may submit to the Board, in writing, a rec- ommendation that the Board take enforce- ment action against such nondepository insti- tution subsidiary, together with an expla- nation of the concerns giving rise to the rec- ommendation, if the appropriate Federal banking agency determines (by a vote of its members, if applicable) that the activities of the nondepository institution subsidiary pose a material threat to the safety and soundness of any insured depository institution sub- sidiary of the depository institution holding company. (2) Back-up authority of the appropriate Fed- eral banking agency If, within the 60-day period beginning on the date on which the Board receives a rec- ommendation under paragraph (1), the Board does not take enforcement action against the nondepository institution subsidiary or pro- vide a plan for supervisory or enforcement ac- tion that is acceptable to the appropriate Fed- eral banking agency that made the rec- ommendation pursuant to paragraph (1), such agency may take the recommended enforce- ment action against the nondepository insti- tution subsidiary, in the same manner as if the nondepository institution subsidiary were an insured depository institution for which the agency was the appropriate Federal bank- ing agency. (f) Coordination among appropriate Federal banking agencies Each Federal banking agency, prior to or when exercising authority under subsection (d) or (e) shall— (1) provide reasonable notice to, and consult with, the appropriate Federal banking agency or State bank supervisor (or other State regu- latory agency) of the nondepository institu- tion subsidiary of a depository institution holding company that is described in sub- section (d) before commencing any examina- tion of the subsidiary; Page 1144 TITLE 12—BANKS AND BANKING § 1831d (2) to the fullest extent possible— (A) rely on the examinations, inspections, and reports of the appropriate Federal bank- ing agency or the State bank supervisor (or other State regulatory agency) of the sub- sidiary; (B) avoid duplication of examination ac- tivities, reporting requirements, and re- quests for information; and (C) ensure that the depository institution holding company and the subsidiaries of the depository institution holding company are not subject to conflicting supervisory de- mands by the appropriate Federal banking agencies. (g) Rule of construction No provision of this section shall be construed as limiting any authority of the Board, the Cor- poration, or the Comptroller of the Currency under any other provision of law. (Sept. 21, 1950, ch. 967, § 2[26], as added Pub. L. 111–203, title VI, § 605(a), July 21, 2010, 124 Stat. 1604.) Editorial Notes REFERENCES IN TEXT Section 1844(c)(5) of this title, referred to in subsec. (a)(2), was in the original ‘‘section 5(c)(5) of the Bank Holding Company Act’’ and was translated as reading ‘‘section 5(c)(5) of the Bank Holding Company Act of 1956’’ to reflect the probable intent of Congress. Section 1841(o)(8) of this title, referred to in subsec. (a)(3), was in the original ‘‘section 2(o)(8) of the Bank Holding Company Act’’ and was translated as reading ‘‘section 2(o)(8) of the Bank Holding Company Act of 1956’’ to reflect the probable intent of Congress. The Consumer Financial Protection Act of 2010, re- ferred to in subsecs. (b) and (d)(2), is title X of Pub. L. 111–203, July 21, 2010, 124 Stat. 1955, which enacted sub- chapter V (§ 5481 et seq.) of chapter 53 of this title and enacted, amended, and repealed numerous other sec- tions and notes in the Code. Subtitle B of the Act is classified generally to part B (§ 5511 et seq.) of sub- chapter V of chapter 53 of this title. For complete clas- sification of this Act to the Code, see Short Title note set out under section 5301 of this title and Tables. PRIOR PROVISIONS A prior section 1831c, act Sept. 21, 1950, ch. 967, § 2[26], as added Nov. 10, 1978, Pub. L. 95–630, title XII, § 1205, 92 Stat. 3711; amended Oct. 15, 1982, Pub. L. 97–320, title I, § 113(p), 96 Stat. 1474; Jan. 12, 1983, Pub. L. 97–457, § 3, 96 Stat. 2507, which related to conversion, merger, or con- solidation of mutual savings banks into Federal sav- ings banks or savings banks which are insured institu- tions within meaning of former section 1724 of this title, was repealed by Pub. L. 103–325, title VI, § 602(f)(1), Sept. 23, 1994, 108 Stat. 2292. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Pub. L. 111–203, title VI, § 605(b), July 21, 2010, 124 Stat. 1607, provided that: ‘‘The amendment made by subsection (a) [enacting this section] shall take effect on the transfer date.’’ [For definition of ‘‘transfer date’’ as used in section 605(b) of Pub. L. 111–203, set out above, see section 5301 of this title.] § 1831d. State-chartered insured depository insti- tutions and insured branches of foreign banks (a) Interest rates In order to prevent discrimination against State-chartered insured depository institutions, including insured savings banks, or insured branches of foreign banks with respect to inter- est rates, if the applicable rate prescribed in this subsection exceeds the rate such State bank or insured branch of a foreign bank would be per- mitted to charge in the absence of this sub- section, such State bank or such insured branch of a foreign bank may, notwithstanding any State constitution or statute which is hereby preempted for the purposes of this section, take, receive, reserve, and charge on any loan or dis- count made, or upon any note, bill of exchange, or other evidence of debt, interest at a rate of not more than 1 per centum in excess of the dis- count rate on ninety-day commercial paper in effect at the Federal Reserve bank in the Fed- eral Reserve district where such State bank or such insured branch of a foreign bank is located or at the rate allowed by the laws of the State, territory, or district where the bank is located, whichever may be greater. (b) Interest overcharge; forfeiture; interest pay- ment recovery If the rate prescribed in subsection (a) exceeds the rate such State bank or such insured branch of a foreign bank would be permitted to charge in the absence of this section, and such State fixed rate is thereby preempted by the rate de- scribed in subsection (a), the taking, receiving, reserving, or charging a greater rate of interest than is allowed by subsection (a), when know- ingly done, shall be deemed a forfeiture of the entire interest which the note, bill, or other evi- dence of debt carries with it, or which has been agreed to be paid thereon. If such greater rate of interest has been paid, the person who paid it may recover in a civil action commenced in a court of appropriate jurisdiction not later than two years after the date of such payment, an amount equal to twice the amount of the inter- est paid from such State bank or such insured branch of a foreign bank taking, receiving, re- serving, or charging such interest. (Sept. 21, 1950, ch. 967, § 2[27], as added Pub. L. 96–221, title V, § 521, Mar. 31, 1980, 94 Stat. 164; amended Pub. L. 100–86, title I, § 101(g)(2), Aug. 10, 1987, 101 Stat. 563; Pub. L. 101–73, title II, § 201(a), Aug. 9, 1989, 103 Stat. 187.) Editorial Notes PRIOR PROVISIONS Provisions similar to this section were contained in section 1831a of this title prior to its repeal by Pub. L. 96–221. AMENDMENTS 1989—Subsec. (a). Pub. L. 101–73 substituted ‘‘insured depository institutions’’ for ‘‘insured banks’’. 1987—Subsec. (a). Pub. L. 100–86 struck out ‘‘and in- sured mutual savings banks’’ after ‘‘insured savings banks’’.