(a) Purpose. This section establishes capital planning and prior
notice and approval requirements for capital distributions by certain
savings and loan holding companies. This section also establishes
the Board’s process for determining the stress capital buffer requirement
applicable to these savings and loan holding companies.
(b) Scope and reservation of
authority.
(1) Applicability. Except as provided in section 238.170(c), this section applies to:
(i) Any top-tier covered savings and loan holding company domiciled
in the United States with average total consolidated assets of $100
billion or more ($100 billion asset threshold); and
(ii) Any other covered savings and loan
holding company domiciled in the United States that is made subject
to this section, in whole or in part, by order of the Board.
(2) Average total consolidated assets. For
purposes of this section, average total consolidated assets means
the average of the total consolidated assets as reported by a covered
savings and loan holding company on its Consolidated Financial Statements
for Holding Companies (FR Y-9C) for the four most recent consecutive
quarters. If the covered savings and loan holding company has not
filed the FR Y-9C for each of the four most recent consecutive quarters,
average total consolidated assets means the average of the company’s
total consolidated assets, as reported on the company’s FR Y-9C, for
the most recent quarter or consecutive quarters, as applicable. Average
total consolidated assets are measured on the as-of date of the most
recent FR Y-9C used in the calculation of the average.
(3) Ongoing applicability. A covered savings and loan holding company
(including any successor covered savings and loan holding company)
that is subject to any requirement in this section shall remain subject
to such requirements unless and until its total consolidated assets
fall below $100 billion for each of four consecutive quarters, as
reported on the FR Y-9C and effective on the as-of date of the fourth
consecutive FR Y-9C.
(4) Reservation of authority. Nothing
in this section shall limit the authority of the Federal Reserve to
issue or enforce a capital directive or take any other supervisory
or enforcement action, including an action to address unsafe or unsound
practices or conditions or violations of law.
(5) Application
of this section by order. The Board may apply this section, in
whole or in part, to a covered savings and loan holding company by
order based on the institution’s size, level of complexity, risk profile,
scope of operations, or financial condition.
(c) Transition periods for certain
covered savings and loan holding companies.
(1) A covered savings and loan holding
company that meets the $100 billion asset threshold (as measured under
paragraph (b) of this section) on or before September 30 of a calendar
year must comply with the requirements of this section beginning on
January 1 of the next calendar year, unless that time is extended
by the Board in writing. Notwithstanding the previous sentence, the
Board will not provide a covered savings and loan holding company
with notice of its stress capital buffer requirement until the first
year in which the Board conducts an analysis of the covered savings
and loan company pursuant to 12 CFR 238.132.
(2) A covered savings and loan holding
company that meets the $100 billion asset threshold after September
30 of a calendar year must comply with the requirements of this section
beginning on January 1 of the second calendar year after the covered
savings and loan holding company meets the $100 billion asset threshold,
unless that time is extended by the Board in writing. Notwithstanding
the previous sentence, the Board will not provide a covered savings
and loan holding company with notice of its stress capital buffer
requirement until the first year in which the Board conducts an analysis
of the covered savings and loan holding company pursuant to 12 CFR
238.132.
(3) The Board,
or the appropriate Reserve Bank with the concurrence of the Board,
may require a covered savings and loan holding company described in
paragraph (c)(1) or (2) of this section to comply with any or all
of the requirements of this section if the Board, or appropriate Reserve
Bank with concurrence of the Board, determines that the requirement
is appropriate on a different date based on the company’s risk profile,
scope of operation, or financial condition and provides prior notice
to the company of the determination.
(d) Definitions. For purposes of this
section, the following definitions apply:
(1) Advanced approaches means the
risk-weighted assets calculation methodologies at 12 CFR part 217,
subpart E, as applicable.
(2) Average total nonbank assets means the average of the
total nonbank assets, calculated in accordance with the instructions
to the FR Y-9LP, for the four most recent calendar quarters or, if
the covered savings and loan holding company has not filed the FR
Y-9LP for each of the four most recent calendar quarters, for the
most recent quarter or quarters, as applicable.
(3) Capital action means any issuance
of a debt or equity capital instrument, any capital distribution,
and any similar action that the Federal Reserve determines could impact
a covered savings and loan holding company’s consolidated capital.
(4) Capital distribution means a redemption or repurchase of any debt or equity capital instrument,
a payment of common or preferred stock dividends, a payment that may
be temporarily or permanently suspended by the issuer on any instrument
that is eligible for inclusion in the numerator of any minimum regulatory
capital ratio, and any similar transaction that the Federal Reserve
determines to be in substance a distribution of capital.
(5) Capital plan means
a written presentation of a covered savings and loan holding company’s
capital planning strategies and capital adequacy process that includes
the mandatory elements set forth in paragraph (e)(2) of this section.
(6) Capital plan cycle means the period beginning on January 1 of a calendar year and ending
on December 31 of that year.
(7) Capital policy means a covered
savings and loan holding company’s written principles and guidelines
used for capital planning, capital issuance, capital usage and distributions,
including internal capital goals; the quantitative or qualitative
guidelines for capital distributions; the strategies for addressing
potential capital shortfalls; and the internal governance procedures
around capital policy principles and guidelines.
(8) Category IV savings and loan holding
company means a covered savings and loan holding company identified
as a Category IV banking organization pursuant to 12 CFR 238.10.
(9) Common equity tier
1 capital has the same meaning as under 12 CFR part 217.
(10) Effective capital
distribution limitations means any limitations on capital distributions
established by the Board by order or regulation, including pursuant
to 12 CFR 217.11, provided that, for any limitations based on risk-weighted
assets, such limitations must be calculated using the standardized
approach, as set forth in 12 CFR part 217, subpart D.
(11) Final planned capital distributions means the planned capital distributions included in a capital plan
that include the adjustments made pursuant to paragraph (h) of this
section, if any.
(12) Internal baseline scenario means a scenario that reflects the
covered savings and loan holding company’s expectation of the economic
and financial outlook, including expectations related to the covered
saving and loan holding company’s capital adequacy and financial condition.
(13) Internal stress
scenario means a scenario designed by a covered savings and loan
holding company that stresses the specific vulnerabilities of the
covered savings and loan holding company’s risk profile and operations,
including those related to the covered savings and loan holding company’s
capital adequacy and financial condition.
(14) Planning horizon means the
period of at least nine consecutive quarters, beginning with the quarter
preceding the quarter in which the covered savings and loan holding
company submits its capital plan, over which the relevant projections
extend.
(15) Regulatory
capital ratio means a capital ratio for which the Board has established
minimum requirements for the covered savings and loan holding company
by regulation or order, including, as applicable, the covered savings
and loan holding company’s regulatory capital ratios calculated under
12 CFR part 217 and the deductions required under 12 CFR 248.12; except
that the covered savings and loan holding company shall not use the
advanced approaches to calculate its regulatory capital ratios.
(16) Severely adverse
scenario means a set of conditions that affect the U.S. economy
or the financial condition of a covered company and that overall are
significantly more severe than those associated with the baseline
scenario and may include trading or other additional components.
(17) Stress capital
buffer requirement means the amount calculated under paragraph
(f) of this section.
(18) Supervisory stress test means a stress test conducted
using a severely adverse scenario and the assumptions contained in
12 CFR part 238, subpart O.
(e) Capital planning requirements and procedures.
(1) Annual capital planning.
(i) A covered savings and
loan holding company must develop and maintain a capital plan.
(ii) A covered savings
and loan holding company must submit its complete capital plan to
the Board and the appropriate Reserve Bank by April 5 of each calendar
year, or such later date as directed by the Board or by the appropriate
Reserve Bank with concurrence of the Board.
(iii) The covered savings and loan holding
company’s board of directors or a designated committee thereof must
at least annually and prior to submission of the capital plan under
paragraph (e)(1)(ii) of this section:
(A) Review the robustness
of the covered savings and loan holding company’s process for assessing
capital adequacy;
(B)
Ensure that any deficiencies in the covered savings and loan holding
company’s process for assessing capital adequacy are appropriately
remedied; and
(C) Approve
the covered savings and loan holding company’s capital plan.
(2) Mandatory elements of capital plan. A capital
plan must contain at least the following elements:
(i) An assessment
of the expected uses and sources of capital over the planning horizon
that reflects the covered savings and loan holding company’s size,
complexity, risk profile, and scope of operations, assuming both expected
and stressful conditions, including:
(A) Estimates of projected
revenues, losses, reserves, and pro forma capital levels,
including regulatory capital ratios, and any additional capital measures
deemed relevant by the covered savings and loan holding company, over
the planning horizon under a range of scenarios, including:
(1) If the covered savings and loan
holding company is a Category IV savings and loan holding company,
the Internal baseline scenario and at least one Internal stress scenario,
as well as any additional scenarios, based on financial conditions
or the macroeconomic outlook, or based on the covered savings and
loan holding company’s financial condition, size, complexity, risk
profile, or activities, or risks to the U.S. economy, that the Federal
Reserve may provide the covered savings and loan holding company after
giving notice to the covered savings and loan holding company; or
(2) If the covered
savings and loan holding company is not a Category IV savings and
loan holding company, any scenarios provided by the Federal Reserve,
the Internal baseline scenario, and at least one Internal stress scenario;
(B) A discussion
of the results of any stress test required by law or regulation, and
an explanation of how the capital plan takes these results into account;
and
(C) A description
of all planned capital actions over the planning horizon. Planned
capital actions must be consistent with effective capital distribution
limitations, except as may be adjusted pursuant to paragraph (h) of
this section. In determining whether a covered savings and loan holding
company’s planned capital distributions are consistent with effective
capital distribution limitations, a covered savings and loan holding
company must assume that any countercyclical capital buffer amount
currently applicable to the covered savings and loan holding company
remains at the same level, except that the covered savings and loan
holding company must reflect any increases or decreases in the countercyclical
capital buffer amount that have been announced by the Board at the
times indicated by the Board’s announcement for when such increases
or decreases will take effect.
(ii) A detailed description of the covered
savings and loan holding company’s process for assessing capital adequacy,
including:
(A) A discussion of how the covered savings
and loan holding company will, under expected and stressful conditions,
maintain capital commensurate with its risks, maintain capital above
the regulatory capital ratios, and serve as a source of strength to
its subsidiary depository institutions;
(B) A discussion of how the covered savings
and loan holding company will, under expected and stressful conditions,
maintain sufficient capital to continue its operations by maintaining
ready access to funding, meeting its obligations to creditors and
other counterparties, and continuing to serve as a credit intermediary;
(iii)
The covered savings and loan holding company’s capital policy; and
(iv) A discussion of
any expected changes to the covered savings and loan holding company’s
business plan that are likely to have a material impact on the covered
savings and loan holding company’s capital adequacy or liquidity.
(3) Data collection. Upon the request of the
Board or appropriate Reserve Bank, the covered savings and loan holding
company shall provide the Federal Reserve with information regarding:
(i) The covered savings and loan holding company’s financial condition,
including its capital;
(ii) The covered savings and loan holding company’s structure;
(iii) Amount and risk
characteristics of the covered savings and loan holding company’s
on- and off-balance sheet exposures, including exposures within the
covered savings and loan holding company’s trading account, other
trading-related exposures (such as counterparty-credit risk exposures)
or other items sensitive to changes in market factors, including,
as appropriate, information about the sensitivity of positions to
changes in market rates and prices;
(iv) The covered savings and loan holding
company’s relevant policies and procedures, including risk management
policies and procedures;
(v) The covered savings and loan holding
company’s liquidity profile and management;
(vi) The loss, revenue, and expense
estimation models used by the covered savings and loan holding company
for stress scenario analysis, including supporting documentation regarding
each model’s development and validation; and
(vii) Any other relevant qualitative
or quantitative information requested by the Board or by the appropriate
Reserve Bank to facilitate review of the covered savings and loan
holding company’s capital plan under this section.
(4) Resubmission of a capital plan.
(i) A covered
savings and loan holding company must update and resubmit its capital
plan to the appropriate Reserve Bank within 30 calendar days of the
occurrence of one of the following events:
(A) The covered
savings and loan holding company determines there has been or will
be a material change in the covered savings and loan holding company’s
risk profile, financial condition, or corporate structure since the
covered savings and loan holding company last submitted the capital
plan to the Board and the appropriate Reserve Bank under this section;
or
(B) The Board, or the
appropriate Reserve Bank with concurrence of the Board, directs the
covered savings and loan holding company in writing to revise and
resubmit its capital plan for any of the following reasons:
(1) The capital plan is incomplete
or the capital plan, or the covered savings and loan holding company’s
internal capital adequacy process, contains material weaknesses;
(2) There has been,
or will likely be, a material change in the covered savings and loan
holding company’s risk profile (including a material change in its
business strategy or any risk exposure), financial condition, or corporate
structure;
(3)
The Internal stress scenario(s) are not appropriate for the covered
savings and loan holding company’s business model and portfolios,
or changes in financial markets or the macroeconomic outlook that
could have a material impact on a covered savings and loan holding
company’s risk profile and financial condition require the use of
updated scenarios; or
(ii) The Board, or the appropriate Reserve
Bank with concurrence of the Board, may extend the 30-day period in
paragraph (e)(4)(i) of this section for up to an additional 60 calendar
days, or such longer period as the Board or the appropriate Reserve
Bank, with concurrence of the Board, determines appropriate.
(iii) Any updated capital
plan must satisfy all the requirements of this section; however, a
covered savings and loan holding company may continue to rely on information
submitted as part of a previously submitted capital plan to the extent
that the information remains accurate and appropriate.
(5) Confidential treatment of information submitted. The confidentiality of information submitted to the Board under
this section and related materials shall be determined in accordance
with applicable exemptions under the Freedom of Information Act (5
U.S.C. 552(b)) and the Board’s Rules Regarding Availability of Information
(12 CFR part 261).
(f) Calculation of the stress capital buffer requirement.
(1) General. The Board will determine the stress capital buffer
requirement that applies under 12 CFR 217.11 pursuant to paragraph
(f) of this section. For each covered savings and loan holding company
that is not a Category IV savings and loan holding company, the Board
will calculate the covered savings and loan holding company’s stress
capital buffer requirement annually. For each Category IV savings and loan
holding company, the Board will calculate the covered savings and
loan holding company’s stress capital buffer requirement biennially,
occurring in each calendar year ending in an even number, and will
adjust the covered savings and loan holding company’s stress capital
buffer requirement biennially, occurring in each calendar year ending
in an odd number. Notwithstanding the previous sentence, the Board
will calculate the stress capital buffer requirement of a Category
IV savings and loan holding company in a year ending in an odd number
with respect to which that company makes an election pursuant to 12
CFR 238.132(c)(2)(ii).
(2) Stress capital buffer requirement calculation. A covered savings and loan holding company’s stress capital buffer
requirement is equal to the greater of:
(i) The following calculation:
(A) The ratio of a covered savings and loan holding company’s common
equity tier 1 capital to risk-weighted assets, as calculated under
12 CFR part 217, subpart D, as of the final quarter of the previous
capital plan cycle, unless otherwise determined by the Board; minus
(B) The lowest projected
ratio of the covered savings and loan holding company’s common equity
tier 1 capital to risk-weighted assets, as calculated under 12 CFR
part 217, subpart D, in any quarter of the planning horizon under
a supervisory stress test; plus
(C) The ratio of:
(1) The sum of the covered savings and loan holding company’s
planned common stock dividends (expressed as a dollar amount) for
each of the fourth through seventh quarters of the planning horizon;
to
(2) The risk-weighted
assets of the covered savings and loan holding company in the quarter
in which the covered savings and loan holding company had its lowest
projected ratio of common equity tier 1 capital to risk-weighted assets,
as calculated under 12 CFR part 217, subpart D, in any quarter of
the planning horizon under a supervisory stress test; and
(ii)
2.5 percent.
(3) Recalculation of stress capital buffer
requirement. If a covered savings and loan holding company resubmits
its capital plan pursuant to paragraph (e)(4) of this section, the
Board may recalculate the covered savings and loan holding company’s
stress capital buffer requirement. The Board will provide notice of
whether the covered savings and loan holding company’s stress capital
buffer requirement will be recalculated within 75 calendar days after
the date on which the capital plan is resubmitted, unless the Board
provides notice to the company that it is extending the time period.
(4) Adjustment of stress capital buffer requirement. In each calendar year in which the Board does not calculate a Category
IV savings and loan holding company’s stress capital buffer requirement
pursuant to paragraph (f)(1) of this section, the Board will adjust
the Category IV savings and loan holding company’s stress capital
buffer requirement to be equal to the result of the calculation set
forth in paragraph (f)(2) of this section, using the same values that
were used to calculate the stress capital buffer requirement most
recently provided to the covered savings and loan holding company,
except that the value used in paragraph (f)(2)(i)(C)(1) of
the calculation will be equal to the covered savings and loan holding
company’s planned common stock dividends (expressed as a dollar amount)
for each of the fourth through seventh quarters of the planning horizon
as set forth in the capital plan submitted by the covered savings
and loan holding company in the calendar year in which the Board adjusts
the covered savings and loan holding company’s stress capital buffer
requirement.
(g) Review of capital plans by the Federal Reserve. The Board, or
the appropriate Reserve Bank with concurrence of the Board, will consider
the following factors in reviewing a covered savings and loan holding
company’s capital plan:
(1) The comprehensiveness of the capital
plan, including the extent to which the analysis underlying the capital
plan captures and addresses potential risks stemming from activities
across the covered savings and loan holding company and the covered
savings and loan holding company’s capital policy;
(2) The reasonableness of the covered savings
and loan holding company’s capital plan, the assumptions and analysis
underlying the capital plan, and the robustness of its capital adequacy
process;
(3) Relevant
supervisory information about the covered savings and loan holding
company and its subsidiaries;
(4) The covered savings and loan holding
company’s regulatory and financial reports, as well as supporting
data that would allow for an analysis of the covered savings and loan
holding company’s loss, revenue, and reserve projections;
(5) The results of any stress
tests conducted by the covered savings and loan holding company or
the Federal Reserve; and
(6) Other information requested or required by the Board or the appropriate
Reserve Bank, as well as any other information relevant, or related,
to the savings and loan holding company’s capital adequacy.
(h) Federal Reserve notice
of stress capital buffer requirement; final planned capital distributions.
(1) Notice. The Board will provide a covered savings and loan holding
company with notice of its stress capital buffer requirement and an
explanation of the results of the supervisory stress test. Unless
otherwise determined by the Board, notice will be provided by June
30 of the calendar year in which the capital plan was submitted pursuant
to paragraph (e)(1)(ii) of this section or within 90 calendar days
of receiving notice that the Board will recalculate the covered savings
and loan holding company’s stress capital buffer requirement pursuant
to paragraph (f)(3) of this section.
(2) Response
to notice.
(i) Request
for reconsideration of stress capital buffer requirement. A covered
savings and loan holding company may request reconsideration of a
stress capital buffer requirement provided under paragraph (h)(1)
of this section. To request reconsideration of a stress capital buffer
requirement, a covered savings and loan holding company must submit
to the Board a request pursuant to paragraph (i) of this section.
(ii) Adjustments to planned capital distributions. Within two business days of receipt of notice of a stress capital
buffer requirement under paragraph (h)(1) or (i)(5) of this section,
as applicable, a covered savings and loan holding company must:
(A) Determine whether the planned capital distributions for the fourth
through seventh quarters of the planning horizon under the Internal
baseline scenario would be consistent with effective capital distribution
limitations assuming the stress capital buffer requirement provided
by the Board under paragraph (h)(1) or (i)(5) of this section, as
applicable, in place of any stress capital buffer requirement in effect;
and
(1) If the planned capital
distributions for the fourth through seventh quarters of the planning
horizon under the Internal baseline scenario would not be consistent
with effective capital distribution limitations assuming the stress
capital buffer requirement provided by the Board under paragraph (h)(1)
or (i)(5) of this section, as applicable, in place of any stress capital
buffer requirement in effect, the covered savings and loan holding
company must adjust its planned capital distributions such that its
planned capital distributions would be consistent with effective capital
distribution limitations assuming the stress capital buffer requirement
provided by the Board under paragraph (h)(1) or (i)(5) of this section,
as applicable, in place of any stress capital buffer requirement in
effect; or
(2)
If the planned capital distributions for the fourth through seventh
quarters of the planning horizon under the Internal baseline scenario
would be consistent with effective capital distribution limitations
assuming the stress capital buffer requirement provided by the Board
under paragraph (h)(1) or (i)(5) of this section, as applicable, in
place of any stress capital buffer requirement in effect, the covered
savings and loan holding company may adjust its planned capital distributions.
A covered savings and loan holding company may not adjust its planned
capital distributions to be inconsistent with the effective capital
distribution limitations assuming the stress capital buffer requirement
provided by the Board under paragraph (h)(1) or (i)(5) of this section,
as applicable; and
(B) Notify the Board of any adjustments made
to planned capital distributions for the fourth through seventh quarters
of the planning horizon under the Internal baseline scenario.
(3) Final planned capital distributions. The
Board will consider the planned capital distributions, including any
adjustments made pursuant to paragraph (h)(2)(ii) of this section,
to be the covered savings and loan holding company’s final planned
capital distributions on the later of:
(i) The expiration
of the time for requesting reconsideration under paragraph (i) of
this section; and
(ii) The expiration of the time for adjusting planned capital distributions
pursuant to paragraph (h)(2)(ii) of this section.
(4) Effective date of final stress capital buffer requirement.
(i) The Board will provide a savings and loan holding company with
its final stress capital buffer requirement and confirmation of the
covered savings and loan holding company’s final planned capital distributions
by August 31 of the calendar year that a capital plan was submitted
pursuant to paragraph (e)(1)(ii) of this section, unless otherwise
determined by the Board. A stress capital buffer requirement will
not be considered final so as to be agency action subject to judicial
review under 5 U.S.C. 704 during the pendency of a request for reconsideration
made pursuant to paragraph (i) of this section or before the time
for requesting reconsideration has expired.
(ii) Unless otherwise determined by
the Board, a covered savings and loan holding company’s final planned
capital distributions and final stress capital buffer requirement
shall:
(A) Be effective on October 1 of the calendar
year in which a capital plan was submitted pursuant to paragraph (e)(1)(ii)
of this section; and
(B)
Remain in effect until superseded.
(5) Publication. With respect to any covered savings and loan holding
company subject to this section, the Board may disclose publicly any
or all of the following:
(i) The stress capital buffer requirement
provided to a covered savings and loan holding company under paragraph
(h)(1) or (i)(5) of this section;
(ii) Adjustments made pursuant to paragraph
(h)(2)(ii);
(iii)
A summary of the results of the supervisory stress test; and
(iv) Other information.
(i) Administrative remedies; request for reconsideration. The following
requirements and procedures apply to any request under this paragraph
(i):
(1) General. To request reconsideration of a stress capital buffer
requirement, provided under paragraph (h) of this section, a covered
savings and loan holding company must submit a written request for
reconsideration.
(2) Timing of request. A request for reconsideration
of a stress capital buffer requirement, provided under paragraph (h)
of this section, must be received within 15 calendar days of receipt
of a notice of a covered savings and loan holding company’s stress
capital buffer requirement.
(3) Contents
of request.
(i) A request for reconsideration must
include a detailed explanation of why reconsideration should be granted
(that is, why a stress capital buffer requirement should be reconsidered).
With respect to any information that was not previously provided to
the Federal Reserve in the covered savings and loan holding company’s
capital plan, the request should include an explanation of why the
information should be considered.
(ii) A request for reconsideration may
include a request for an informal hearing on the covered savings and
loan holding company’s request for reconsideration.
(4) Hearing.
(i) The Board may, in its
sole discretion, order an informal hearing if the Board finds that
a hearing is appropriate or necessary to resolve disputes regarding
material issues of fact.
(ii) An informal hearing shall be held
within 30 calendar days of a request, if granted, provided that the
Board may extend this period upon notice to the requesting party.
(5) Response to request. Within 30 calendar
days of receipt of the covered savings and loan holding company’s
request for reconsideration of its stress capital buffer requirement
submitted under paragraph (i)(2) of this section or within 30 days
of the conclusion of an informal hearing conducted under paragraph
(i)(4) of this section, the Board will notify the company of its decision
to affirm or modify the covered savings and loan holding company’s
stress capital buffer requirement, provided that the Board may extend
this period upon notice to the covered savings and loan holding company.
(6) Distributions during the pendency of a request
for reconsideration. During the pendency of the Board’s decision
under paragraph (i)(5) of this section, the covered savings and loan
holding company may make capital distributions that are consistent
with effective distribution limitations, unless prior approval is
required under paragraph (j)(1) of this section.
(j) Approval requirements for
certain capital actions.
(1) Circumstances
requiring approval—Resubmission of a capital plan. Unless it
receives prior approval pursuant to paragraph (j)(3) of this section,
a covered savings and loan holding company may not make a capital
distribution (excluding any capital distribution arising from the
issuance of a capital instrument eligible for inclusion in the numerator
of a regulatory capital ratio) if the capital distribution would occur
after the occurrence of an event requiring resubmission under paragraph
(e)(4)(i)(A) or (B) of this section.
(2) Contents
of request. A request for a capital distribution under this section
must contain the following information:
(i) The covered savings
and loan holding company’s capital plan or a discussion of changes
to the covered savings and loan holding company’s capital plan since
it was last submitted to the Federal Reserve;
(ii) The purpose of the transaction;
(iii) A description
of the capital distribution, including for redemptions or repurchases
of securities, the gross consideration to be paid and the terms and
sources of funding for the transaction, and for dividends, the amount
of the dividend(s); and
(iv) Any additional information requested
by the Board or the appropriate Reserve Bank (which may include, among
other things, an assessment of the covered savings and loan holding
company’s capital adequacy under a severely adverse scenario, a revised
capital plan, and supporting data).
(3) Approval
of certain capital distributions.
(i) The Board, or the
appropriate Reserve Bank with concurrence of the Board, will act on
a request for prior approval of a capital distribution within 30 calendar
days after the receipt of all the information required under paragraph
(j)(2) of this section.
(ii) In acting on a request for prior approval of a capital distribution,
the Board, or appropriate Reserve Bank with concurrence of the Board,
will apply the considerations and principles in paragraph (g) of this
section, as appropriate. In addition, the Board, or the appropriate
Reserve Bank with concurrence of the Board, may disapprove the transaction
if the covered savings and loan holding company does not provide all
of the information required to be submitted under paragraph (j)(2)
of this section.
(4) Disapproval
and hearing.
(i) The Board, or the appropriate Reserve
Bank with concurrence of the Board, will notify the covered savings
and loan holding company in writing of the reasons for a decision
to disapprove any proposed capital distribution. Within 15 calendar days
after receipt of a disapproval by the Board, the covered savings and
loan holding company may submit a written request for a hearing.
(ii) The Board may,
in its sole discretion, order an informal hearing if the Board finds
that a hearing is appropriate or necessary to resolve disputes regarding
material issues of fact. An informal hearing shall be held within
30 calendar days of a request, if granted, provided that the Board
may extend this period upon notice to the requesting party.
(iii) Written notice of
the final decision of the Board shall be given to the covered savings
and loan holding company within 60 calendar days of the conclusion
of any informal hearing ordered by the Board, provided that the Board
may extend this period upon notice to the requesting party.
(iv) While the Board’s
decision is pending and until such time as the Board, or the appropriate
Reserve Bank with concurrence of the Board, approves the capital distribution
at issue, the covered savings and loan holding company may not make
such capital distribution.
(k) Post notice requirement. A covered
savings and loan holding company must notify the Board and the appropriate
Reserve Bank within 15 days of making a capital distribution if:
(1) The capital distribution
was approved pursuant to paragraph (j)(3) of this section; or
(2) The dollar amount of the
capital distribution will exceed the dollar amount of the covered
savings and loan holding company’s final planned capital distributions,
as measured on an aggregate basis beginning in the fourth quarter
of the planning horizon through the quarter at issue.
