12 U.S.C. § 1831a
After the end of the 1-year period beginning on December 19, 1991, an insured State bank may not engage as principal in any type of activity that is not permissible for a national bank unless-
The Corporation shall make a determination under paragraph (1)(A) not later than 60 days after receipt of a completed application that may be required under this subsection.
The Corporation may extend the 60-day period referred to in subparagraph (A) for not more than 30 additional days, and shall notify the applicant of any such extension.
Notwithstanding subsection (a), an insured State bank may not engage in insurance underwriting except to the extent that activity is permissible for national banks.
Notwithstanding any other provision of law, an insured State bank or any of its subsidiaries that provided insurance on or before September 30, 1991, which was reinsured in whole or in part by the Federal Crop Insurance Corporation may continue to provide such insurance.
An insured State bank may not, directly or indirectly, acquire or retain any equity investment of a type that is not permissible for a national bank.
Paragraph (1) shall not prohibit an insured State bank from acquiring or retaining an equity investment in a subsidiary of which the insured State bank is a majority owner.
Notwithstanding any other provision of this subsection, an insured State bank may invest as a limited partner in a partnership, the sole purpose of which is direct or indirect investment in the acquisition, rehabilitation, or new construction of a qualified housing project.
The aggregate of the investments of any insured State bank pursuant to this paragraph shall not exceed 2 percent of the total assets of the bank.
As used in this paragraph-
The term "qualified housing project" means residential real estate that is intended to primarily benefit lower income people throughout the period of the investment.
The term "lower income" means income that is less than or equal to the median income based on statistics from State or Federal sources.
The Corporation shall require any insured State bank to divest any equity investment the retention of which is not permissible under this subsection as quickly as can be prudently done, and in any event before the end of the 5-year period beginning on December 19, 1991.
With respect to any equity investment held by any insured State bank on December 19, 1991, which was lawfully acquired before December 19, 1991, the bank shall be deemed not to be in violation of the prohibition in this subsection on retaining such investment so long as the bank complies with the applicable requirements established by the Corporation for divesting such investments.
After the end of the 1-year period beginning on December 19, 1991, a subsidiary of an insured State bank may not engage as principal in any type of activity that is not permissible for a subsidiary of a national bank unless-
Notwithstanding paragraph (1), no subsidiary of an insured State bank may engage in insurance underwriting except to the extent such activities are permissible for national banks.
Notwithstanding subparagraph (A), a well-capitalized insured State bank or any of its subsidiaries that was lawfully providing insurance as principal in a State on November 21, 1991, may continue to provide, as principal, insurance of the same type to residents of the State (including companies or partnerships incorporated in, organized under the laws of, licensed to do business in, or having an office in the State, but only on behalf of their employees resident in or property located in the State), individuals employed in the State, and any other person to whom the bank or subsidiary has provided insurance as principal, without interruption, since such person resided in or was employed in such State.
Subparagraph (A) does not apply to a subsidiary of an insured State bank if-
The Corporation shall make a determination under paragraph (1)(A) not later than 60 days after receipt of a completed application that may be required under this subsection.
The Corporation may extend the 60-day period referred to in subparagraph (A) for not more than 30 additional days, and shall notify the applicant of any such extension.
No provision of this chapter shall be construed as prohibiting or impairing the sale or underwriting of savings bank life insurance, or the ownership of stock in a savings bank life insurance company, by any insured bank which-
Before the end of the 1-year period beginning on December 19, 1991, the Corporation shall make a finding whether savings bank life insurance activities of insured banks pose or may pose any significant risk to the Deposit Insurance Fund.
The Corporation shall, pursuant to any finding made under subparagraph (A), take appropriate actions to address any risk that exists or may subsequently develop with respect to insured banks described in paragraph (1)(A).
Actions the Corporation may take under this subparagraph include requiring the modification, suspension, or termination of insurance activities conducted by any insured bank if the Corporation finds that the activities pose a significant risk to any insured bank described in paragraph (1)(A) or to the Deposit Insurance Fund.
An insured State bank shall not acquire or retain, directly or indirectly, any equity investment of a type or in an amount that is not permissible for a national bank or is not otherwise permitted under this section.
Notwithstanding paragraph (1), an insured State bank may, to the extent permitted by the Corporation, acquire and retain ownership of securities described in paragraph (1) to the extent the aggregate amount of such investment does not exceed an amount equal to 100 percent of the bank's capital if such bank-
Notwithstanding paragraph (1), an insured State bank may-
During each year in the 3-year period beginning on December 19, 1991, each insured State bank shall reduce by not less than 1/3 of its shares (as of December 19, 1991) the bank's ownership of securities in excess of the amount equal to 100 percent of the capital of such bank.
By the end of the 3-year period referred to in subparagraph (A), each insured State bank and each subsidiary of a State bank shall be in compliance with the maximum amount limitations on investments referred to in paragraph (1).
Any exception applicable under paragraph (2) with respect to any insured State bank shall cease to apply with respect to such bank upon any change in control of such bank or any conversion of the charter of such bank.
An insured State bank may only engage in any investment pursuant to paragraph (2) if-
The Corporation may require divestiture by an insured State bank of any investment permitted under this subsection if the Corporation determines that such investment will have an adverse effect on the safety and soundness of the bank.
The Corporation shall not require divestiture by any bank pursuant to subparagraph (A) without reason to believe that such investment will have an adverse effect on the safety and soundness of the bank.
The Corporation shall make determinations under this section by regulation or order.
For purposes of this section, the term "activity" includes acquiring or retaining any investment.
This section shall not be construed as limiting the authority of any appropriate Federal banking agency or any State supervisory authority to impose more stringent restrictions.
The laws of a host State, including laws regarding community reinvestment, consumer protection, fair lending, and establishment of intrastate branches, shall apply to any branch in the host State of an out-of-State State bank to the same extent as such State laws apply to a branch in the host State of an out-of-State national bank. To the extent host State law is inapplicable to a branch of an out-of-State State bank in such host State pursuant to the preceding sentence, home State law shall apply to such branch.
An insured State bank that establishes a branch in a host State may conduct any activity at such branch that is permissible under the laws of the home State of such bank, to the extent such activity is permissible either for a bank chartered by the host State (subject to the restrictions in this section) or for a branch in the host State of an out-of-State national bank.
No provision of this subsection shall be construed as affecting the applicability of-
The terms "host State", "home State", and "out-of-State bank" have the same meanings as in section 1831u(f) 1 of this title.
1 See References in Text note below.
12 U.S.C. § 1831a
EDITORIAL NOTES
REFERENCES IN TEXTThe Investment Company Act of 1940, referred to in subsec. (f)(2)(A), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789, which is classified generally to subchapter I (§80a-1 et seq.) of chapter 2D of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see section 80a-51 of Title 15 and Tables.Section 1831u of this title, referred to in subsec. (j)(4), was subsequently amended, and subsec. (f) of section 1831u no longer defines the terms "host State", "home State", and "out-of-State bank". However, such terms are defined elsewhere in that section.
PRIOR PROVISIONSA prior section 1831a, act Sept. 21, 1950, ch. 967, §2[24], as added Dec. 28, 1979, Pub. L. 96-161 title II, §202, 93 Stat. 1235, provided that if the applicable rate prescribed in subsec. (a) exceeded the rate a State bank would be permitted to charge in absence of that subsection, that State bank could for a business or agricultural loan of $25,000 or more, notwithstanding State law, take or charge on any evidence of debt, interest of not more than 5 per centum in excess of the discount rate in effect at the Federal Reserve Bank in the district where the bank was located, that the taking or charging of interest at a greater rate than that prescribed by subsec. (a), if knowingly done, would be deemed a forfeit of the entire interest on that particular evidence of debt, and that if such greater rate of interest had already been paid, the payor could recover twice the amount of such payment in a civil action commenced within two years of such payment, prior to repeal by Pub. L. 96-221, title V, §529, Mar. 31, 1980, 94 Stat. 168, effective at close of Mar. 31, 1980.Another prior section 1831a, act Sept. 21, 1950, ch. 967, §2[24], as added Nov. 5, 1979, Pub. L. 96-104, title I, §102, 93 Stat. 789, identical to this section as added by Pub. L. 96-161, was repealed by section 212 of Pub. L. 96-161 effective at the close of Dec. 27, 1979, except that its provisions would continue to apply to any loan made in any State on or after Nov. 5, 1979, but prior to such repeal.Another prior section 1831a, act Sept. 21, 1950, ch. 967, §2[24], as added Oct. 29, 1974, Pub. L. 93-501, title II, §202, 88 Stat. 1558, identical to this section as added by Pub. L. 96-104 was repealed by section 1 of Pub. L. 96-104 except that its provisions shall continue to apply to any loan made in any State during the period specified in section 206 of Pub. L. 93-501.
AMENDMENTS2006-Subsecs. (a)(1)(A), (d)(1)(A). Pub. L. 109-173, §8(a)(31)(A), substituted "Deposit Insurance Fund" for "appropriate deposit insurance fund". Pub. L. 109-171 repealed Pub. L. 104-208, §2704(d)(14)(W). See 1996 Amendment note below.Subsec. (e)(2)(A). Pub. L. 109-173, §8(a)(31)(B), substituted "risk to the Deposit Insurance Fund." for "risk to the insurance fund of which such banks are members."Subsecs. (e)(2)(B)(ii), (f)(6)(B). Pub. L. 109-173, §8(a)(31)(C), substituted "the Deposit Insurance Fund" for "the insurance fund of which such bank is a member".1997-Subsec. (j). Pub. L. 105-24 amended subsec. (j) generally, substituting pars. (1) to (4) for former pars. (1) to (3) relating to general provisions, activities of branches, and definitions, respectively.1996-Subsec. (a). Pub. L. 104-208, §2217(1), substituted "Permissible activities" for "In general" in heading, designated existing provisions as par. (1) and inserted heading, redesignated former pars. (1) and (2) as subpars. (A) and (B) of par. (1), respectively, and realigned margins, and added par. (2).Subsec. (a)(1)(A). Pub. L. 104-208, §2704(d)(14)(W), which directed substitution of "Deposit Insurance Fund" for "appropriate deposit insurance fund", was repealed by Pub. L. 109-171. See Effective Date of 1996 Amendment note below and 2006 Amendment note above.Subsec. (d)(1)(A). Pub. L. 104-208, §2704(d)(14)(W), which directed substitution of "Deposit Insurance Fund" for "appropriate deposit insurance fund", was repealed by Pub. L. 109-171. See Effective Date of 1996 Amendment note below and 2006 Amendment note above.Subsec. (d)(3). Pub. L. 104-208, §2217(2), added par. (3).1994-Subsec. (j). Pub. L. 103-328 added subsec. (j).1992-Subsec. (e)(1)(B). Pub. L. 102-550 amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: "meets the consumer disclosure requirements under section 1828(k) of this title with respect to such insurance."
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2006 AMENDMENTAmendment by Pub. L. 109-173 effective Mar. 31, 2006, see section 8(b) of Pub. L. 109-173 set out as a note under section 1813 of this title.Amendment by Pub. L. 109-171 effective no later than the first day of the first calendar quarter that begins after the end of the 90-day period beginning Feb. 8, 2006, see section 2102(c) of Pub. L. 109-171 set out as a Merger of BIF and SAIF note under section 1821 of this title.
EFFECTIVE DATE OF 1996 AMENDMENTAmendment by section 2704(d)(14)(W) of Pub. L. 104-208 effective Jan. 1, 1999, if no insured depository institution is a savings association on that date, see section 2704(c) of Pub. L. 104-208 formerly set out as a note under section 1821 of this title.
EFFECTIVE DATE OF 1992 AMENDMENTAmendment by Pub. L. 102-550 effective as if included in the Federal Deposit Insurance Corporation Improvement 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]."
- Deposit Insurance Fund
- The term "Deposit Insurance Fund" means the Deposit Insurance Fund established under section 1821(a)(4) of this title.
- 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.
- 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.
- appropriate Federal banking agency
- The term "appropriate Federal banking agency" means-(1) the Office of the Comptroller of the Currency, in the case of-(A) any national banking association;(B) any Federal branch or agency of a foreign bank; and(C) any Federal savings association;(2) the Federal Deposit Insurance Corporation, in the case of-(A) any State nonmember insured bank;(B) any foreign bank having an insured branch; and(C) any State savings association; 1(3) the Board of Governors of the Federal Reserve System, in the case of-(A) any State member bank;(B) any branch or agency of a foreign bank with respect to any provision of the Federal Reserve Act [ 12 U.S.C. 221 et seq.] which is made applicable under the International Banking Act of 1978 [ 12 U.S.C. 3101 et seq.];(C) any foreign bank which does not operate an insured branch;(D) any agency or commercial lending company other than a Federal agency;(E) supervisory or regulatory proceedings arising from the authority given to the Board of Governors under section 7(c)(1) of the International Banking Act of 1978 [ 12 U.S.C. 3105(c)(1) ], including such proceedings under the Financial Institutions Supervisory Act of 1966;(F) any bank holding company and any subsidiary (other than a depository institution) of a bank holding company; and(G) any savings and loan holding company and any subsidiary (other than a depository institution) of a savings and loan holding company.Under the rule set forth in this subsection, more than one agency may be an appropriate Federal banking agency with respect to any given institution.
- consumer
- The term "consumer" means an individual or an agent, trustee, or representative acting on behalf of an individual.
- depository institution
- The term "depository institution" means any bank or savings association.
- fair lending
- The term "fair lending" means fair, equitable, and nondiscriminatory access to credit for consumers.
- insured bank
- The term "insured bank" means any bank (including a foreign bank having an insured branch) the deposits of which are insured in accordance with the provisions of this chapter; and the term "noninsured bank" means any bank the deposits of which are not so insured.
- insured depository institution
- The term "insured depository institution" means any bank or savings association the deposits of which are insured by the Corporation pursuant to this chapter.
- person
- The term "person" means an individual, partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity.
- 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.
- savings bank
- The term "savings bank" means a bank (including a mutual savings bank) which transacts its ordinary banking business strictly as a savings bank under State laws imposing special requirements on such banks governing the manner of investing their funds and of conducting their business.
- violation
- The term "violation" includes any action (alone or with another or others) for or toward causing, bringing about, participating in, counseling, or aiding or abetting a violation.