(a) Definitions. As used in this section, the terms “bank”, “bank
holding company”, “subsidiary”, and “Board” have the meaning ascribed
to such terms in section 2 of the Bank Holding Company Act of 1956.
For purposes of this section only, the term “company”, as used in
section 2 of the Bank Holding Company Act of 1956, means any person,
estate, trust, partnership, corporation, association, or similar organization,
but does not include any corporation the majority of the shares of
which are owned by the United States or by any State. The term “trust
service” means any service customarily performed by a bank trust department.
For purposes of this section, a financial subsidiary of a national
bank engaging in activities pursuant to section 5136A(a) of the Revised
Statutes of the United States shall be deemed to be a subsidiary of
a bank holding company, and not a subsidiary of a bank.
[12 USC 1971. As amended
by act of Nov. 12, 1999 (113 Stat. 1380).]
4-147
(b) Certain tie-in arrangements; prohibition; exceptions.
(1) A bank shall not in any
manner extend credit, lease or sell property of any kind, or furnish
any service, or fix or vary the consideration for any of the foregoing,
on the condition or requirement—
(A) that the customer shall
obtain some additional credit, property, or service from such bank
other than a loan, discount, deposit, or trust service;
(B) that the customer shall
obtain some additional credit, property, or service from a bank holding
company of such bank, or from any other subsidiary of such bank holding
company;
(C) that
the customer provide some additional credit, property, or service
to such bank, other than those related to and usually provided in
connection with a loan, discount, deposit, or trust service;
(D) that the customer provide
some additional credit, property, or service to a bank holding company
of such bank, or to any other subsidiary of such bank holding company;
or
(E) that the
customer shall not obtain some other credit, property, or service
from a competitor of such bank, a bank holding company of such bank,
or any subsidiary of such bank holding company, other than a condition
or requirement that such bank shall reasonably impose in a credit
transaction to assure the soundness of the credit.
The Board may issue such regulations as are necessary
to carry out this section, and, in consultation with the Comptroller
of the Currency and the Federal Deposit Insurance Company, may by
regulation or order permit such exceptions to the foregoing prohibition
and the prohibitions of section 4(c)(9) and 4(h)(2) of the Bank Holding Company
Act of 1956 as it considers will not be contrary to the purposes of
this section.
4-148
(2) (A) No bank which maintains
a correspondent account in the name of another bank shall make an
extension of credit to an executive officer or director of, or to
any person who directly or indirectly or acting through or in concert
with one or more persons owns, controls, or has the power to vote
more than 10 per centum of any class of voting securities of, such
other bank, or to any related interest of such person, unless such
extension of credit is made on substantially the same terms, including
interest rates and collateral as those prevailing at the time for
comparable transactions with other persons and does not involve more
than the normal risk of repayment or present other unfavorable features.
(B) No bank shall
open a correspondent account at another bank while such bank has outstanding
an extension of credit to an executive officer or director of, or
other person who directly or indirectly or acting through or in concert
with one or more persons owns, controls, or has the power to vote
more than 10 per centum of any class of voting securities of, the
bank desiring to open the account, or to any related interest of such
person, unless such extension of credit was made on substantially
the same terms, including interest rates and collateral as those prevailing
at the time for comparable transactions with other persons and does
not involve more than the normal risk of repayment or present other
unfavorable features.
4-149
(C)
No bank which maintains a correspondent account at another Bank shall
make an extension of credit to an executive officer or director of,
or to any person who directly or indirectly acting through or in concert
with one or more persons owns, controls, or has the power to vote
more than 10 per centum of any class of voting securities of, such
other bank, or to any related interest of such person, unless such
extension of credit is made on substantially the same terms, including
interest rates and collateral as those prevailing at the time for
comparable transactions with other persons and does not involve more
than the normal risk of repayment or present other unfavorable features.
4-150
(D) No bank which has outstanding
an extension of credit to an executive officer or director of, or
to any person who directly or indirectly or acting through or in concert
with one or more persons owns, controls, or has the power to vote
more than 10 per centum of any class of voting securities of, another
bank, or to any related interest of such person shall open a correspondent
account at such other bank, unless such extension of credit was made
on substantially the same terms, including interest rates and collateral
as those prevailing at the time for comparable transactions with other
persons and does not involve more than the normal risk of repayment
or present other unfavorable features.
(E) For purposes of this paragraph,
the term “extension of credit” shall have the meaning prescribed by
the Board pursuant to section 22(h) of the Federal Reserve Act (12
U.S.C. 375b), and the term “executive officer” shall have the same
meaning given it under section 22(g) of the Federal Reserve Act.
4-151
(F) (i) Any
bank which, and any institution-affiliated party (within the meaning
of section 3(u) of the Federal Deposit Insurance Act) with respect
to such bank who, violates any provision of this paragraph shall forfeit
and pay a civil penalty of not more than $5,000 for each day during
which such violation continues.
(ii)
Notwithstanding clause (i), any bank which, and any institution-affiliated
party (within the meaning of section 3(u) of the Federal Deposit Insurance
Act) with respect to such bank who—
(I)
(aa) commits any violation described
in clause (i);
(bb) recklessly
engages in an unsafe or unsound practice in conducting the affairs
of such bank; or
(cc)
breaches any fiduciary duty;
(II) which violation, practice, or breach—
(aa) is part of a pattern of misconduct;
(bb) causes or is likely
to cause more than a minimal loss to such bank; or
(cc) results in pecuniary gain or other benefit
to such party,
shall forfeit and pay a civil penalty of not more than
$25,000 for each day during which such violation, practice, or breach
continues.
4-152
(iii) Notwithstanding clauses
(i) and (ii), any bank which, and any institution-affiliated party
(within the meaning of section 3(u) of the Federal Deposit Insurance
Act) with respect to such bank who—
(I) knowingly—
(aa) commits any violation described in clause (i);
(bb) engages in any unsafe or unsound practice
in conducting the affairs of such bank; or
(cc) breaches any fiduciary duty; and
(II) knowingly
or recklessly causes a substantial loss to such bank or a substantial
pecuniary gain or other benefit to such party by reason of such violation,
practice, or breach,
shall forfeit and pay a civil penalty in an amount not
to exceed the applicable maximum amount determined under clause (iv)
for each day during which such violation, practice, or breach continues.
4-153
(iv) The maximum daily amount
of any civil penalty which may be assessed pursuant to clause (iii)
for any violation, practice, or breach described in such clause is—
(I) in the case of any person other than
a bank, an amount to not exceed $1,000,000; and
(II) in the case of a bank, an amount not
to exceed the lesser of—
(aa) $1,000,000; or
(bb) 1 percent of the total assets of such bank.
(v) Any penalty
imposed under clause (i), (ii), or (iii) may be assessed and collected—
(I) in the case of a national bank, by the
Comptroller of the Currency;
(II) in the case of a State member bank, by the Board; and
(III) in the case of an insured
nonmember State bank, by the Federal Deposit Insurance Corporation,
in the manner provided in subparagraphs (E), (F), (G),
and (I) of section 8(i)(2) of the Federal Deposit Insurance Act for
penalties imposed (under such section) and any such assessment shall
be subject to the provisions of such section.
4-154
(vi) The bank or other person against whom
any penalty is assessed under this subparagraph shall be afforded
an agency hearing if such bank or person submits a request for such
hearing within 20 days after the issuance of the notice of assessment.
Section 8(h) of the Federal Deposit Insurance Act shall apply to any
proceeding under this subparagraph.
(vii) All penalties collected under authority
of this subsection shall be deposited into the Treasury.
(viii) For purposes of this paragraph, the term “violate”
includes any action (alone or with another or others) for or toward
causing, bringing about, participating in, counseling, or aiding or
abetting a violation.
(ix)
The Comptroller of the Currency, the Board, and the Federal Deposit
Insurance Corporation shall prescribe regulations establishing such
procedures as may be necessary to carry out this subparagraph.
4-156.1
(G) For the purpose
of this paragraph—
(i) the term “bank” includes a mutual savings
bank, a savings bank, and a savings association (as those terms are
defined in section 3 of the Federal Deposit Insurance Act);
(ii) the term “related interests
of such persons” includes any company controlled by such executive
officer, director, or person, or any political or campaign committee
the funds or services of which will benefit such executive officer,
director, or person or which is controlled by such executive officer,
director, or person; and
(iii) the terms “control of a company” and “company” have the same
meaning as under section 22 (h) of the Federal Reserve Act (12 U.S.C.
375b).
4-156.2
(H)
The resignation, termination of employment or participation, or separation
of an institution-affiliated party (within the meaning of section
3(u) of the Federal Deposit Insurance Act) with respect to such a
bank (including a separation caused by the closing of such a bank)
shall not affect the jurisdiction and authority of the appropriate
Federal banking agency to issue any notice and proceed under this
section against any such party, if such notice is served before the
end of the 6-year period beginning on the date such party ceased to
be such a party with respect to such bank (whether such date occurs
before, on, or after the date of the enactment of this subparagraph).
[12 USC 1972. As amended
by acts of Nov. 10, 1978 (92 Stat. 3690); Oct. 15, 1982 (96 Stat.
1520, 1523, 1526); Aug. 9, 1989 (103 Stat. 461, 473); Dec. 19, 1991
(105 Stat. 2359); Sept. 30, 1996 (110 Stat. 3009-413); Oct. 13, 2006
(120 Stat. 1978); and July 21, 2010 (124 Stat. 1547).]
4-157
(c) Jurisdiction of courts; duty of U.S.
attorneys; equitable proceedings; petition; expedition of cases; temporary
restraining orders; bringing in additional parties; subpoenas. The district courts of the United States have jurisdiction to prevent
and restrain violations of subsection (b) of this section and it is
the duty of the United States attorneys, under the direction of the
Attorney General, to institute proceedings in equity to prevent and
restrain such violations. The proceedings may be by way of a petition
setting forth the case and praying that the violation be enjoined
or otherwise prohibited. When the parties complained of have been
duly notified of the petition, the court shall proceed, as soon as
possible, to the hearing and determination of the case. While the
petition is pending, and before final decree, the court may at any
time make such temporary restraining order or prohibition as it deems
just. Whenever it appears to the court that the ends of justice require
that other parties be brought before it, the court may cause them
to be summoned whether or not they reside in the district in which
the court is held, and subpoenas to that end may be served in any
district by the marshal thereof.
[12 USC 1973.]
4-158
(d) Actions by United States;
subpoenas for witnesses. In any action brought by or on behalf
of the United States under subsection (b), subpoenas for witnesses
may run into any district, but no writ of subpoena may issue for witnesses
living out of the district in which the court is held at a greater
distance than one hundred miles from the place of holding the same
without the prior permission of the trial court upon proper application
and cause shown.
[12 USC 1974.]
4-159
(e) Civil actions by persons injured; jurisdiction
and venue; amount of recovery. Any person who is injured in his
business or property by reason of anything forbidden in subsection
(b) may sue therefor in any district court of the United States in
which the defendant resides or is found or has an agent, without regard
to the amount in controversy, and shall be entitled to recover three
times the amount of the damages sustained by him and the cost of suit,
including a reasonable attorney’s fee.
[12 USC 1975.]
4-160
(f) Injunctive relief of persons
against threatened loss or damages; equitable proceedings; preliminary
injunctions. Any person may sue for and have injunctive relief,
in any court of the United States having jurisdiction over the parties,
against threatened loss or damage by reason of a violation of subsection
(b), under the same conditions and principles as injunctive relief
against threatened conduct that will cause loss or damage is granted
by courts of equity and under the rules governing such proceedings.
Upon the execution of proper bond against damages for an injunction
improvidently granted and a showing that the danger of irreparable
loss or damage is immediate, a preliminary injunction may issue.
[12 USC 1976.]
4-161
(g) Limitation of actions; suspension
of limitations.
(1) Subject to paragraph (2), any action
to enforce any cause of action under this section shall be forever
barred unless commenced within four years after the cause of action
accrued.
(2) Whenever
any enforcement action is instituted by or on behalf of the United
States with respect to any matter which is or could be the subject
of a private right of action under this section, the running of the
statute of limitations in respect of every private right of action
arising under this section and based in whole or in part on such matter
shall be suspended during the pendency of the enforcement action so
instituted and for one year thereafter: Provided, That whenever
the running of the statute of limitations in respect of a cause of
action arising under this section is suspended under this paragraph,
any action to enforce such cause of action shall be forever barred
unless commenced either within the period of suspension or within
the four-year period referred to in paragraph (1).
[12 USC 1977.]
4-162
(h) Actions under other
Federal or State laws unaffected; regulations or orders barred as
a defense. Nothing contained in this section shall be construed
as affecting in any manner the right of the United States or any other
party to bring an action under any other law of the United States
or of any State, including any right which may exist in addition to
specific statutory authority, challenging the legality of any act
or practice which may be proscribed by this section. No regulation
or order issued by the Board under this section shall in any manner
constitute a defense to such action.
[12 USC 1978.]
