12 U.S.C. § 1468 — Transactions with affiliates; extensions of

Page 418 TITLE 12—BANKS AND BANKING § 1468 with the provisions of this subsection that are applicable to any company described in paragraph (1)(A) that controls an inter- mediate holding company under section 8 of the Federal Deposit Insurance Act [12 U.S.C. 1818], and a company described in paragraph (1)(A) shall be subject to such section (solely for purposes of this subparagraph) in the same manner and to the same extent as if the company described in paragraph (1)(A) were a savings and loan holding company. (B) Application of other Act Any violation of this subsection by a grandfathered unitary savings and loan hold- ing company that controls an intermediate holding company may also be treated as a violation of the Federal Deposit Insurance Act [12 U.S.C. 1811 et seq.] for purposes of subparagraph (A). (C) No effect on other authority No provision of this paragraph shall be construed as limiting any authority of the Board or any other Federal agency under any other provision of law. (c) Regulations The Board— (1) shall promulgate regulations to establish the criteria for determining whether to re- quire a grandfathered unitary savings and loan holding company to establish an intermediate holding company under subsection (b); and (2) may promulgate regulations to establish any restrictions or limitations on transactions between an intermediate holding company or a parent of such company and its affiliates, as necessary to prevent unsafe and unsound prac- tices in connection with transactions between the intermediate holding company, or any subsidiary thereof, and its parent company or affiliates that are not subsidiaries of the inter- mediate holding company, except that such regulations shall not restrict or limit any transaction in connection with the bona fide acquisition or lease by an unaffiliated person of assets, goods, or services. (d) Rules of construction (1) Activities Nothing in this section shall be construed to require a grandfathered unitary savings and loan holding company to conform its activi- ties to permissible activities. (2) Permissible corporate reorganization The formation of an intermediate holding company as required in subsection (b) shall be presumed to be a permissible corporate reorga- nization as described in section 1467a(c)(9)(D) of this title. (June 13, 1933, ch. 64, § 10A, as added Pub. L. 111–203, title VI, § 626, July 21, 2010, 124 Stat. 1638.) Editorial Notes REFERENCES IN TEXT The transfer date, referred to in subsec. (b)(1)(A), probably means the transfer date defined in section 5301 of this title. The Federal Deposit Insurance Act, referred to in subsec. (b)(5)(B), is act Sept. 21, 1950, ch. 967, § 2, 64 Stat. 873, which is classified generally to chapter 16 (§ 1811 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under sec- tion 1811 of this title and Tables. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as a note under section 5301 of this title. § 1468. Transactions with affiliates; extensions of credit to executive officers, directors, and principal shareholders (a) Affiliate transactions (1) In general Sections 23A and 23B of the Federal Reserve Act [12 U.S.C. 371c and 371c–1] shall apply to every savings association in the same manner and to the same extent as if the savings asso- ciation were a member bank (as defined in such Act [12 U.S.C. 221 et seq.]), except that— (A) no loan or other extension of credit may be made to any affiliate unless that af- filiate is engaged only in activities described in section 1467a(c)(2)(F)(i) of this title; and (B) no savings association may enter into any transaction described in section 23A(b)(7)(B) of the Federal Reserve Act with any affiliate other than with respect to shares of a subsidiary. (2) Sister bank exemption made available to savings associations (A) Savings associations controlled by bank holding companies Every savings association more than 80 percent of the voting stock of which is owned by a company described in section 1467a(c)(8) of this title shall be treated as a bank for purposes of section 23A(d)(1) and section 23B of the Federal Reserve Act, if every savings association and bank con- trolled by such company complies with all applicable capital requirements on a fully phased-in basis and without reliance on goodwill. (B) Savings associations generally Effective on and after January 1, 1995, every savings association shall be treated as a bank for purposes of section 23A(d)(1) and section 23B of the Federal Reserve Act. (3) Affiliates described Any company that would be an affiliate (as defined in sections 23A and 23B of the Federal Reserve Act) of any savings association if such savings association were a member bank (as such term is defined in such Act) shall be deemed to be an affiliate of such savings asso- ciation for purposes of paragraph (1). (4) Additional restrictions authorized The appropriate Federal banking agency may impose such additional restrictions on any transaction between any savings associa- tion and any affiliate of such savings associa- tion as the appropriate Federal banking agen- Page 419 TITLE 12—BANKS AND BANKING § 1468 cy determines to be necessary to protect the safety and soundness of the savings associa- tion. (b) Extensions of credit to executive officers, di- rectors, and principal shareholders (1) In general Subsections (g) and (h) of section 22 of the Federal Reserve Act [12 U.S.C. 375a, 375b] shall apply to every savings association in the same manner and to the same extent as if the sav- ings association were a member bank (as de- fined in such Act). (2) Additional restrictions authorized The appropriate Federal banking agency may impose such additional restrictions on loans or extensions of credit to any appro- priate Federal banking agency or executive of- ficer of any savings association, or any person who directly or indirectly owns, controls, or has the power to vote more than 10 percent of any class of voting securities of a savings as- sociation, as the appropriate Federal banking agency determines to be necessary to protect the safety and soundness of the savings asso- ciation. (c) Administrative enforcement The appropriate Federal banking agency may take enforcement action with respect to viola- tions of this section pursuant to section 8 or 18(j) of the Federal Deposit Insurance Act [12 U.S.C. 1818 or 1828(j)], as appropriate. (d) Exemptions (1) Federal savings associations The Comptroller of the Currency may, by order, exempt a transaction of a Federal sav- ings association from the requirements of this section if— (A) the Board and the Office of the Comp- troller of the Currency jointly find the ex- emption to be in the public interest and con- sistent with the purposes of this section and notify the Federal Deposit Insurance Cor- poration of such finding; and (B) before the end of the 60-day period be- ginning on the date on which the Federal Deposit Insurance Corporation receives no- tice of the finding under subparagraph (A), the Federal Deposit Insurance Corporation does not object, in writing, to the finding, based on a determination that the exemp- tion presents an unacceptable risk to the De- posit Insurance Fund. (2) State savings association The Federal Deposit Insurance Corporation may, by order, exempt a transaction of a State savings association from the requirements of this section if the Board and the Federal De- posit Insurance Corporation jointly find that— (A) the exemption is in the public interest and consistent with the purposes of this sec- tion; and (B) the exemption does not present an un- acceptable risk to the Deposit Insurance Fund. (June 13, 1933, ch. 64, § 11, formerly § 9, 48 Stat. 135; Apr. 27, 1934, ch. 168, § 15, 48 Stat. 647; renum- bered § 11, Pub. L. 100–86, title IV, § 402(a), Aug. 10, 1987, 101 Stat. 605; Pub. L. 101–73, title III, § 301, Aug. 9, 1989, 103 Stat. 342; Pub. L. 102–242, title III, § 306(i), Dec. 19, 1991, 105 Stat. 2359; Pub. L. 103–325, title III, § 316, Sept. 23, 1994, 108 Stat. 2223; Pub. L. 111–203, title III, § 369(9), title VI, § 608(c), July 21, 2010, 124 Stat. 1565, 1610.) Editorial Notes REFERENCES IN TEXT The Federal Reserve Act, referred to in subsecs. (a)(1), (3) and (b)(1), is act Dec. 23, 1913, ch. 6, 38 Stat. 251, which is classified principally to chapter 3 (§ 221 et seq.) of this title. For complete classification of this Act to the Code, see References in Text note set out under section 226 of this title and Tables. AMENDMENTS 2010—Pub. L. 111–203, § 369(9), substituted ‘‘appropriate Federal banking agency’’ for ‘‘Director’’ wherever ap- pearing. Subsec. (d). Pub. L. 111–203, § 608(c), added subsec. (d). 1994—Subsec. (a)(2)(C). Pub. L. 103–325, § 316(b), struck out heading and text of subpar. (C) which read as fol- lows: ‘‘(C) TRANSITION RULE FOR WELL CAPITALIZED SAVINGS ASSOCIATIONS.— ‘‘(i) IN GENERAL.—A savings association that is well capitalized (as defined in section 1831o of this title), as determined without including goodwill in calcu- lating core capital, shall be treated as a bank for pur- poses of section 371c(d)(1) of this title and section 371c–1 of this title. ‘‘(ii) LIABILITY OF COMMONLY CONTROLLED DEPOSI- TORY INSTITUTIONS.—Any savings association that en- gages under clause (i) in a transaction that would not otherwise be permissible under this subsection, and any affiliated insured bank that is commonly con- trolled (as defined in section 1815(e)(9) of this title), shall be subject to subsection (e) of section 1815 of this title as if paragraph (6) of that subsection did not apply.’’ Pub. L. 103–325, § 316(a), added subpar. (C). 1991—Subsec. (b)(1). Pub. L. 102–242 substituted ‘‘Sub- sections (g) and (h) of section 22’’ for ‘‘Section 22(h)’’. 1989—Pub. L. 101–73 amended section generally, sub- stituting subsecs. (a) to (c) relating to affiliate trans- actions, extensions of credit, and administrative en- forcement, for former undesignated paragraph relating to separability of provisions. 1934—Act Apr. 27, 1934, reenacted section without change. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by section 369(9) of Pub. L. 111–203 effec- tive on the transfer date, see section 351 of Pub. L. 111–203, set out as a note under section 906 of Title 2, The Congress. Amendment by section 608(c) of Pub. L. 111–203 effec- tive 1 year after the transfer date, see section 608(d) of Pub. L. 111–203, set out as a note under section 371c of this title. EFFECTIVE DATE OF 1994 AMENDMENT Pub. L. 103–325, title III, § 316(b), Sept. 23, 1994, 108 Stat. 2223, provided that amendment made by that sec- tion is effective Jan. 1, 1995. EFFECTIVE DATE OF 1991 AMENDMENT Amendment by Pub. L. 102–242 effective upon the ear- lier of the date on which final regulations under section 306(m)(1) of Pub. L. 102–242 become effective or 150 days after Dec. 19, 1991, see section 306(l) of Pub. L. 102–242, set out as a note under section 375b of this title. TRANSITIONAL RULE FOR CERTAIN TRANSACTIONS WITH AFFILIATES Pub. L. 101–73, title III, § 304, Aug. 9, 1989, 103 Stat. 351, provided that: Page 420 TITLE 12—BANKS AND BANKING § 1468a 1 So in original. ‘‘(a) CONSISTENCY OF CERTAIN REGULATIONS WITH SEC- TION 23A OF THE FEDERAL RESERVE ACT [12 U.S.C. 371c].—Not later than 6 months after the date of enact- ment of this Act [Aug. 9, 1989], the Director of the Of- fice of Thrift Supervision shall revise the Director’s conflicts regulations so as not to prohibit a thrift insti- tution from purchasing mortgages from a mortgage- banking affiliate to the same extent as a member bank may do so under section 250.250 of title 12, Code of Fed- eral Regulations. ‘‘(b) TRANSITIONAL PERIOD.—Notwithstanding section 11(a) of the Home Owners’ Loan Act [12 U.S.C. 1468(a)] (as added by section 301 of this Act), a thrift institution that, before May 1, 1989, had received approval from the Federal Savings and Loan Insurance Corporation pur- suant to section 408(d)(6) of the National Housing Act [former 12 U.S.C. 1730a(d)(6)] as then in effect to pur- chase mortgages from a mortgage-banking affiliate may, during the 6-month period following the date on which final regulations are prescribed pursuant to sub- section (a), continue to engage in transactions for which it had received such approval. Any savings asso- ciation that engages in such transactions pursuant to this subsection shall comply with the standards that were applicable under section 408(d)(6) as in effect on May 1, 1989. ‘‘(c) AUTHORITY TO EXTEND REGULATORY APPROVALS THAT WOULD OTHERWISE LAPSE DURING THE TRANSI- TIONAL PERIOD.—The Director of the Office of Thrift Supervision may extend until the expiration of the 6- month period described in subsection (b) any approval granted by the Federal Savings and Loan Insurance Corporation that expires or would expire before the ex- piration of that 6-month period. In determining wheth- er to grant such exemptions, the Director shall apply the standards that were applicable under section 408(d)(6) of the National Housing Act [former 12 U.S.C. 1730a(d)(6)] as in effect on May 1, 1989.’’ § 1468a. Advertising No savings association shall carry on any sale, plan, or practices, or any advertising, in viola- tion of regulations promulgated by a Federal banking agency. (June 13, 1933, ch. 64, § 12, as added Pub. L. 101–73, title III, § 301, Aug. 9, 1989, 103 Stat. 343; amended Pub. L. 111–203, title III, § 369(10), July 21, 2010, 124 Stat. 1565.) Editorial Notes AMENDMENTS 2010—Pub. L. 111–203 substituted ‘‘a Federal banking agency’’ for ‘‘the Director’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective on the trans- fer date, see section 351 of Pub. L. 111–203, set out as a note under section 906 of Title 2, The Congress. § 1468b. Powers of examiners For the purposes of this chapter, examiners appointed by the a 1 Federal banking agency shall— (1) be subject to the same requirements, re- sponsibilities, and penalties as are applicable to examiners under the Federal Reserve Act [12 U.S.C. 221 et seq.] and title LXII of the Re- vised Statutes; and (2) have, in the exercise of functions under this chapter, the same powers and privileges as are vested in such examiners by law. (June 13, 1933, ch. 64, § 13, as added Pub. L. 101–73, title III, § 301, Aug. 9, 1989, 103 Stat. 343; amended Pub. L. 111–203, title III, § 369(11), July 21, 2010, 124 Stat. 1565.) Editorial Notes REFERENCES IN TEXT The Federal Reserve Act, referred to in par. (1), is act Dec. 23, 1913, ch. 6, 38 Stat. 251, which is classified prin- cipally to chapter 3 (§ 221 et seq.) of this title. For com- plete classification of this Act to the Code, see Ref- erences in Text note set out under section 226 of this title and Tables. Title LXII of the Revised Statutes, referred to in par. (1), consists of R.S. §§ 5133 to 5244, which are classified to sections 16, 21, 22 to 24a, 25a, 25b, 26, 27, 29, 35 to 37, 39, 43, 52, 53, 55 to 57, 59 to 62, 66, 71, 72 to 76, 81, 83 to 86, 90, 91, 93, 93a, 94, 141 to 144, 161, 164, 181, 182, 192 to 194, 196, 215c, 481 to 485, 501, 541, 548, and 582 of this title. See, also, sections 8, 333, 334, 475, 656, 709, 1004, and 1005 of Title 18, Crimes and Criminal Procedure. For com- plete classification of R.S. §§ 5133 to 5244 to the Code, see Tables. AMENDMENTS 2010—Pub. L. 111–203 substituted ‘‘a Federal banking agency’’ for ‘‘Director’’ in introductory provisions. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective on the trans- fer date, see section 351 of Pub. L. 111–203, set out as a note under section 906 of Title 2, The Congress. § 1468c. Separability If any provision of this chapter, or the applica- tion thereof to any person or circumstances, is held invalid, the remainder of the chapter, and the application of such provision to other per- sons or circumstances, shall not be affected thereby. (June 13, 1933, ch. 64, § 14, as added Pub. L. 101–73, title III, § 301, Aug. 9, 1989, 103 Stat. 343.) § 1469. Authority to invest in State housing cor- porations The Congress finds that Federal savings and loan associations and national banks should have the authority to assist in financing the or- ganization and operation of any State housing corporation established under the laws of the State in which the corporation will carry on its operation. It is the purpose of this section to provide a means whereby private financial insti- tutions can assist in providing housing, particu- larly for families of low- or moderate-income, by purchasing stock of and investing in loans to any such State housing corporation situated in the particular State in which the Federal sav- ings and loan association or national bank in- volved is located. (Pub. L. 93–100, § 5(a), Aug. 16, 1973, 87 Stat. 343.) Editorial Notes REFERENCES IN TEXT This section, referred to in text, means section 5 of Pub. L. 93–100, which enacted this section and section 1470 of this title and amended sections 24 and 1464 of this title.