12 U.S.C. § 4613 — Critical capital levels

Page 1690 TITLE 12—BANKS AND BANKING § 4613 quirements with respect to any product or activ- ity of a regulated entity, as the Director con- siders appropriate to ensure that the regulated entity operates in a safe and sound manner, with sufficient capital and reserves to support the risks that arise in the operations and manage- ment of the regulated entity. (f) Periodic review The Director shall periodically review the amount of core capital maintained by the enter- prises, the amount of capital retained by the Federal Home Loan Banks, and the minimum capital levels established for such regulated en- tities pursuant to this section. (Pub. L. 102–550, title XIII, § 1362, Oct. 28, 1992, 106 Stat. 3975; Pub. L. 110–289, div. A, title I, § 1111, July 30, 2008, 122 Stat. 2676.) Editorial Notes AMENDMENTS 2008—Subsec. (a). Pub. L. 110–289, § 1111(1), substituted ‘‘Enterprises’’ for ‘‘In general’’ in heading. Subsecs. (b) to (f). Pub. L. 110–289, § 1111(2), added sub- secs. (b) to (f) and struck out former subsec. (b) which related to minimum capital level during transition pe- riod. § 4613. Critical capital levels (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 ac- counting principles; (2) 0.25 percent of the unpaid principal bal- ance of outstanding mortgage-backed securi- ties 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 ob- ligations of the enterprise not included in paragraph (2) (excluding commitments in ex- cess 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 re- flect differences in the credit risk of such obli- gations in relation to the instruments in- cluded 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 con- sideration of the critical capital level estab- lished under subsection (a) for the enterprises, with such modifications as the Director deter- mines to be appropriate to reflect the dif- ference in operations between the banks and the enterprises. (Pub. L. 102–550, title XIII, § 1363, Oct. 28, 1992, 106 Stat. 3976; Pub. L. 110–289, div. A, title I, § 1141(a), July 30, 2008, 122 Stat. 2730.) Editorial Notes AMENDMENTS 2008—Pub. L. 110–289 designated existing provisions as subsec. (a), inserted heading, and added subsec. (b). Statutory Notes and Related Subsidiaries REGULATIONS Pub. L. 110–289, div. A, title I, § 1141(b), July 30, 2008, 122 Stat. 2730, provided that: ‘‘Not later than the expi- ration of the 180-day period beginning on the date of en- actment of this Act [July 30, 2008], the Director of the Federal Housing Finance Agency shall issue regula- tions pursuant to section 1363(b) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 [12 U.S.C. 4613(b)] (as added by this section) estab- lishing the critical capital level under such section.’’ § 4614. Capital classifications (a) Enterprises For purposes of this subchapter, the Director shall classify the enterprises according to the following capital classifications: (1) Adequately capitalized An enterprise shall be classified as ade- quately capitalized if the enterprise— (A) maintains an amount of total capital that is equal to or exceeds the risk-based capital level established for the enterprise under section 4611 of this title; and (B) maintains an amount of core capital that is equal to or exceeds the minimum capital level established for the enterprise under section 4612 of this title. (2) Undercapitalized An enterprise shall be classified as under- capitalized if— (A) the enterprise— (i) does not maintain an amount of total capital that is equal to or exceeds the risk- based capital level established for the en- terprise; and (ii) maintains an amount of core capital that is equal to or exceeds the minimum capital level established for the enterprise; or (B) the enterprise is otherwise classified as undercapitalized under subsection (b)(1) of this section. (3) Significantly undercapitalized An enterprise shall be classified as signifi- cantly undercapitalized if— (A) the enterprise— (i) does not maintain an amount of total capital that is equal to or exceeds the risk- based capital level established for the en- terprise; (ii) does not maintain an amount of core capital that is equal to or exceeds the min- imum capital level established for the en- terprise; and (iii) maintains an amount of core capital that is equal to or exceeds the critical cap- ital level established for the enterprise under section 4613 of this title; or