(a) Basic standards. The Board may disapprove a proposed mutual
holding company reorganization filed pursuant to section 239.3(a)
if:
(1) Disapproval is necessary
to prevent unsafe or unsound practices;
(2) The financial or managerial resources
of the reorganizing association or any acquiree association warrant
disapproval;
(3) The
proposed capitalization of the mutual holding company fails to meet
the requirements of paragraph (b) of this section;
(4) A stock issuance is proposed in connection
with the reorganization pursuant to section 239.24 that fails to meet
the standards established by that section;
(5) The reorganizing association or any
acquiree association fails to furnish the information required to
be included in the Reorganization Notice or any other information
requested by the Board in connection with the proposed reorganization;
or
(6) The proposed
reorganization would violate any provision of law, including (without
limitation) section 239.3(a) and (c) (regarding board of directors
and membership approval) or section 239.5(a) (regarding continuity
of membership rights).
(b) Capitalization.
(1) The Board shall disapprove a proposal
by a reorganizing association or any acquiree association to capitalize
a mutual holding company in an amount in excess of a nominal amount
if immediately following the reorganization, the resulting association
or the acquiree association would fail to be “adequately capitalized”
under the regulatory capital requirements applicable to the savings
association.
(2) Proposals
by reorganizing associations and acquiree associations to capitalize
mutual holding companies shall also comply with any applicable statutes,
and with regulations or written policies of the Comptroller of the
Currency or the Federal Deposit Insurance Corporation, as applicable,
governing capital distributions by savings associations in effect
at the time of the reorganization.
(c) Presumptive disqualifiers.
(1) Managerial
resources. The factors specified in section 238.15(d)(1)(i) through
(vi) of this chapter shall give rise to a rebuttable presumption that
the managerial resources test of paragraph (a)(2) of this section
is not met. For this purpose, each place the term acquiror appears
in section 238.15(d)(1)(i) through (vi) of this chapter, it shall
be read to mean the reorganizing association or any acquiree association,
and the reference in section 238.15(d)(1)(v) of this chapter to filings
under this part shall be deemed to include filings under either part
238 of this chapter or this part.
(2) Safety and
soundness and financial resources. Failure by a reorganizing
association and any acquiree association to submit a business plan
in connection with a Reorganization Notice, or submission of a business
plan that projects activities that are inconsistent with the credit
and lending needs of the reorganizing association or acquiree association’s
proposed market area or that fails to demonstrate that the capital
of the mutual holding company will be deployed in a safe and sound
manner, shall give rise to a rebuttable presumption that the safety
and soundness and financial resources tests of paragraphs (a)(1) and
(a)(2) of this section are not met.
(d) Failure of the Board to act on a Reorganization
Notice within the prescribed time period. A proposed reorganization
that obtains regulatory clearance from the Board due to the operation
of section 238.14 of this chapter may take place in the manner proposed,
subject to the following conditions:
(1) The reorganization shall be consummated
within one year of the date of the expiration of the Board’s review
period under section 238.14 of this chapter;
(2) The mutual holding company shall not
be capitalized in an amount in excess of what is permissible under
section 239.4(b);
(3)
No request for regulatory waivers or forbearances shall be deemed
granted;
(4) The following
information shall be submitted within the specified time frames:
(i) On the business day prior to the date of the reorganization,
the chief financial officers of the reorganizing association and any
acquiree association shall certify to the Board in writing that no
material adverse events or material adverse changes have occurred
with respect to the financial condition or operations of their respective
associations since the date of the financial statements submitted
with the Reorganization Notice;
(ii) No later than thirty days after
the reorganization, the mutual holding company shall file with the
Board a certification by legal counsel stating the effective date
of the reorganization, the exact number of shares of stock of the
resulting association and any acquiree association acquired by the
mutual holding company and by any other persons, and that the reorganization
has been consummated in accordance with section 239.3 and all other
applicable laws and regulations and the Reorganization Notice;
(iii) No later than
thirty days after the reorganization, the mutual holding company shall
file with the Board an opinion from its independent auditors certifying
that the reorganization was consummated in accordance with generally
accepted accounting principles; and
(iv) No later than thirty days after
the reorganization, the mutual holding company shall file with the
Board a certification stating that the mutual holding company will
not deviate materially, or cause its subsidiary savings associations
to deviate materially, from the business plan submitted in connection
with the Reorganization Notice, unless prior written approval from
the Board is obtained.
