(a) In general. The Board of Governors, in consultation with the
Council and the Corporation, shall prescribe regulations establishing
requirements to provide for the early remediation of financial distress
of a nonbank financial company supervised by the Board of Governors
or a bank holding company described in section 165(a), except that
nothing in this subsection authorizes the provision of financial assistance
from the Federal Government.
(b) Purpose of the early remediation requirements. The purpose of the early remediation requirements under subsection
(a) shall be to establish a series of specific remedial actions to
be taken by a nonbank financial company supervised by the Board of
Governors or a bank holding company described in section 165(a) that
is experiencing increasing financial distress, in order to minimize
the probability that the company will become insolvent and the potential
harm of such insolvency to the financial stability of the United States.
(c) Remediation requirements. The regulations prescribed by the Board of Governors under subsection
(a) shall—
(1) define measures of
the financial condition of the company, including regulatory capital,
liquidity measures, and other forward-looking indicators; and
(2) establish requirements
that increase in stringency as the financial condition of the company
declines, including—
(A) requirements in the initial stages
of financial decline, including limits on capital distributions, acquisitions,
and asset growth; and
(B) requirements at later stages of financial decline, including
a capital restoration plan and capital-raising requirements, limits
on transactions with affiliates, management changes, and asset sales.
[12 USC 5366.]
See section 168 at
4-793.5.
