(a) General. For the purpose of section 238.51(b)(6)(ii), the activities set
forth in paragraph (b) of this section are, and were as of March 5,
1987, permissible services and activities for savings and loan holding
companies or subsidiaries thereof that are neither savings associations
nor service corporation subsidiaries of subsidiary savings associations.
Services and activities of service corporation subsidiaries of savings
and loan holding company subsidiary savings associations are prescribed
by paragraph (d) of this section.
(b) Prescribed services and activities. Subject to the provisions
of paragraph (c) of this section, a savings and loan holding company
subject to restrictions on its activities pursuant to section 238.51(b),
or a subsidiary thereof which is neither a savings association nor
a service corporation of a subsidiary savings association, may furnish
or perform the following services and engage in the following activities
to the extent that it has legal power to do so:
(1) Originating, purchasing, selling and
servicing any of the following:
(i) Loans, and participation interests
in loans, on a prudent basis and secured by real estate, including
brokerage and warehousing of such real estate loans, except that such
a company or subsidiary shall not invest in a loan secured by real
estate as to which a subsidiary savings association of such company
has a security interest;
(ii)
Manufactured home chattel paper (written evidence of both a monetary
obligation and a security interest of first priority in one or more
manufactured homes, and any equipment installed or to be installed
therein), including brokerage and warehousing of such chattel paper;
(iii) Loans, with or without security,
for the altering, repairing, improving, equipping or furnishing of
any residential real estate;
(iv) Educational loans; and
(v) Consumer loans, as defined in section 160.3 of this title, Provided, That, no subsidiary savings association of such holding
company or service corporation of such savings association shall engage
directly or indirectly, in any transaction with any affiliate involving
the purchase or sale, in whole or in part, of any consumer loan.
(2) Subject to the provisions
of 12 U.S.C. 1468, furnishing or performing clerical accounting and
internal audit services primarily for its affiliates;
(3) Subject to the provisions of 12 U.S.C.
1468, furnishing or performing the following services primarily for
its affiliates, and for any savings association and service corporation
subsidiary thereof, and for other multiple holding companies and affiliates
thereof:
(i) Data
processing;
(ii) Credit information,
appraisals, construction loan inspections, and abstracting;
(iii) Development and administration
of personnel benefit programs, including life insurance, health insurance,
and pension or retirement plans;
(iv) Research, studies, and surveys;
(v) Purchase of office supplies, furniture
and equipment;
(vi) Development
and operation of storage facilities for microfilm or other duplicate
records; and
(vii) Advertising
and other services to procure and retain both savings accounts and
loans;
(4) Acquisition
of unimproved real estate lots, and acquisition of other unimproved
real estate for the purpose of prompt development and subdivision,
for:
(i) Construction
of improvements,
(ii) Resale
to others for such construction, or
(iii) Use as mobile home sites;
(5) Development, subdivision and construction
of improvements on real estate acquired pursuant to paragraph (b)(4)
of this section, for sale or rental;
(6) Acquisition of improved real estate and mobile homes to be held
for rental;
(7) Acquisition of improved
real estate for remodeling, rehabilitation, modernization, renovation,
or demolition and rebuilding for sale or for rental;
(8) Maintenance and management of improved
real estate;
(9) Underwriting or
reinsuring contract of credit life or credit health and accident insurance
in connection with extensions of credit by the savings and loan holding
company or any of its subsidiaries, or extensions
of credit by any savings association or service corporation subsidiary
thereof, or any other savings and loan holding company or subsidiary
thereof;
(10) Preparation of State
and Federal tax returns for accountholders of or borrowers from (including
immediate family members of such accountholders or borrowers but not
including an accountholder or borrower which is a corporation operated
for profit) an affiliated savings association;
(11) Purchase and sale of gold coins minted
and issued by the United States Treasury pursuant to Public Law 99-185,
99 Stat. 1177 (1985), and activities reasonably incident thereto;
and
(12) Any services or activities
approved by order of the former Federal Savings and Loan Insurance
Corporation prior to March 5, 1987, pursuant to its authority under
section 408(c)(2)(F) of the National Housing Act, as in effect at
the time.
(c) Procedures
for commencing services or activities. A notice to engage in
or acquire a company engaged in a service or activity prescribed by
paragraph (b) of this section (other than purchase or sale of a government
debt security) shall be filed by a savings and loan holding company
(including a company seeking to become a savings and loan holding
company) with the appropriate Reserve Bank in accordance with this
paragraph and the Board’s Rules of Procedure (12 CFR 262.3).
(1) Engaging
de novo in services or activities. A savings and loan holding
company seeking to commence or to engage de novo in a service or activity
pursuant to this section, either directly or through a subsidiary,
shall file a notice containing a description of the activities to
be conducted and the identity of the company that will conduct the
activity.
(2) Acquiring company engaged in services or activities. A savings and loan holding company seeking to acquire or control
voting securities or assets of a company engaged in a service or activity
pursuant to this section, shall file a notice containing the following:
(i) A description of
the proposal, including a description of each proposed service or
activity;
(ii) The identity of
any entity involved in the proposal, and, if the notificant proposes
to conduct the service or activity through an existing subsidiary,
a description of the existing activities of the subsidiary;
(iii) If the savings and loan holding
company has consolidated assets of $150 million or more:
(A) Parent company and consolidated pro forma balance sheets for the acquiring savings and loan holding
company as of the most recent quarter showing credit and debit adjustments
that reflect the proposed transaction;
(B) Consolidated pro forma risk-based capital and leverage
ratio calculations for the acquiring savings and loan holding company
as of the most recent quarter (or, in the case of a qualifying community
banking organization (as defined in section 217.12 of this chapter)
that is subject to the community bank leverage ratio framework (as
defined in section 217.12 of this chapter), consolidated pro forma leverage ratio calculations for the acquiring savings and loan holding
company as of the most recent quarter); and
(C) A description of the purchase price and
the terms and sources of funding for the transaction;
(iv) If the savings and loan holding
company has consolidated assets of less than $150 million:
(A) A pro forma parent-only balance
sheet as of the most recent quarter showing credit and debit adjustments
that reflect the proposed transaction; and
(B) A description of the purchase price and
the terms and sources of funding for the transaction and, if the transaction
is debt funded, one-year income statement and cash flow projections
for the parent company, and the sources and schedule for retiring
any debt incurred in the transaction;
(v) (A) For each insured depository
institution (that is not a qualifying community banking organization
(as defined in section 217.12 of this chapter) that is subject to
the community bank leverage ratio framework (as defined in section
217.12 of this chapter)) whose tier 1 capital, total capital, total
assets or risk-weighted assets change as a result of the transaction,
the total risk-weighted assets, total assets, tier 1 capital, and
total capital of the institution on a pro forma basis; and
(B) For each insured depository institution
that is a qualifying community banking organization (as defined in
section 217.12 of this chapter) that is subject to the community bank
leverage ratio framework (as defined in section 217.12 of this chapter),
whose tier 1 capital (as defined in section 217.2 of this chapter
and calculated in accordance with section 217.12(b) of this chapter)
or total assets change as a result of the transaction, the total assets
and tier 1 capital of the institution on a pro forma basis;
(vi) A description
of the management expertise, internal controls and risk management
systems that will be utilized in the conduct of the proposed service
or activity; and
(vii) A copy
of the purchase agreements, and balance sheet and income statements
for the most recent quarter and year-end for any company to be acquired.
(3) (i)
Except as provided in paragraph (c)(3)(ii) of this section, from December
2, 2020, until December 31, 2021, the determination of whether a savings
and loan holding company must comply with the filing requirements
in paragraph (c)(2)(iii) or (iv) of this section shall be made based
on the lesser of:
(A)
The consolidated assets of the savings and loan holding company as
of December 31, 2019; and
(B) The consolidated
assets of the savings and loan holding company as of the end of the
most recent calendar quarter.
(ii) The relief provided under paragraph
(c)(3)(i) of this section does not apply to a savings and loan holding
company if the Board determines that permitting the savings and loan
holding company to determine its assets in accordance with that paragraph
would not be commensurate with the risk profile of the savings and
loan holding company. When making this determination, the Board will
consider all relevant factors, including the extent of asset growth
of the savings and loan holding company since December 31, 2019; the
causes of such growth, including whether growth occurred as a result
of mergers or acquisitions; whether such growth is likely to be temporary
or permanent; whether the savings and loan holding company has become
involved in any additional activities since December 31, 2019; the
asset size of any parent companies; and the type of assets held by
the savings and loan holding company. In making a determination pursuant
to this paragraph (c)(3)(ii), the Board will apply notice and response
procedures in the same manner and to the same extent as the notice
and response procedures in 12 CFR 263.202.
(d) Notice provided to Board. The
Reserve Bank shall immediately send to the Board a copy of any notice
received under paragraphs (c)(1) or (c)(2) of this section.
(e) Notice to public.
(1) The Reserve Bank shall notify the
Board for publication in the Federal Register immediately upon
receipt by the Reserve Bank of:
(i) A notice under paragraph (c) of
this section or
(ii) A written
request that notice of a proposal under paragraph (c) of this section
be published in the Federal Register. Such a request may request
that Federal Register publication occur up to 15 calendar days
prior to submission of a notice under this subpart.
(2) The Federal Register notice
published under this paragraph (e) shall invite public comment on
the proposal, generally for a period of 15 days.
(f) Action on notices.
(1) Reserve
Bank action.
(i) In general. Within 30 calendar
days after receipt by the Reserve Bank of a notice filed pursuant
to paragraphs (c)(1) or (c)(2) of this section, the Reserve Banks
shall:
(A) Approve the notice;
or
(B) Refer the notice to the Board
for decision because action under delegated authority is not appropriate.
(ii) Return of incomplete notice. Within 7 calendar
days of receipt, the Reserve Bank may return any notice as informationally
incomplete that does not contain all of the information required by
this section. The return of such a notice shall be deemed action on
the notice.
(iii) Notice of action. The Reserve Bank shall
promptly notify the savings and loan holding company of any action
or referral under this paragraph.
(iv) Close of public comment period. The Reserve Bank shall not approve any notice under this paragraph
(e)(1) of this section prior to the third business day after the close
of the public comment period, unless an emergency exists that requires
expedited or immediate action.
(2) Board action;
internal schedule. The Board seeks to act on every notice referred
to it for decision within 60 days of the date that the notice is filed
with the Reserve Bank. If the Board is unable to act within this period,
the Board shall notify the notificant and explain the reasons and
the date by which the Board expects to act.
(3) (i) Required time limit for System action. The Board or the Reserve
Bank shall act on any notice under this section within 60 days after
the submission of a complete notice.
(ii) Extension
of required period for action. The Board may extend the 60-day
period required for Board action under paragraph (e)(3)(i) of this
section for an additional 30 days upon notice to the notificant.
(4) Requests for additional information. The
Board or the Reserve Bank may modify the information requirements
under this section or at any time request any additional information
that either believes is needed for a decision on any notice under
this section.
(5) Tolling of period. The Board or the Reserve
Bank may at any time extend or toll the time period for action on
a notice for any period with the consent of the notificant.
(g) Modification or termination of service
or activity. The Board may require a savings and loan holding
company or subsidiary thereof which has commenced a service or activity
pursuant to this section to modify or terminate, in whole or in part,
such service or activity as the Board finds necessary in order to
ensure compliance with the provisions and purposes of this part and
of section 10 of the Home Owners’ Loan Act, as amended, or to prevent
evasions thereof.
(h) Alterations. Except as may be otherwise provided in a resolution by or on behalf
of the Board in a particular case, a service or activity commenced
pursuant to this section shall not be altered in any material respect
from that described in the notice filed under paragraph (c)(1) of
this section, unless before making such alteration notice of intent
to do so is filed in compliance with the appropriate procedures of
said paragraph (c)(1) of this section.
(i) Service corporation subsidiaries of savings
associations. The Board hereby approves without application the
furnishing or performing of such services or engaging in such activities
as permitted by the OTS pursuant to section 545.74 of this title,
as in effect on March 5, 1987, if such service or activity is conducted
by a service corporation subsidiary of a subsidiary savings association
of a savings and loan holding company and if such service corporation
has legal power to do so.
