(a) Notice of intent to issue directive. If a state member bank
or bank holding company is operating with less than the minimum level
of capital established in the Board’s Capital Adequacy Guidelines,
or as otherwise established under the procedures described in section
263.85, or if the Board has determined that the current capital level
of a savings and loan holding company is not adequate, the Board may
issue and serve upon such state member bank, bank holding company,
or savings and loan holding company written notice of the Board’s
intent to issue a directive to require the bank, bank holding company,
or savings and loan holding company to achieve and maintain adequate
capital within a specified time period.
8-088.6
(b) Contents of notice. The notice of intent
to issue a directive shall include—
(1) The required minimum level of capital
to be achieved or maintained by the institution;
(2) Its current level of capital;
(3) The proposed increase in
capital needed to meet the minimum requirements;
(4) The proposed date or schedule for meeting
these minimum requirements;
(5) When deemed appropriate, specific details
of a proposed plan for meeting the minimum capital requirements; and
(6) The date for a written
response by the bank or bank holding company to the proposed directive,
which shall be at least 14 days from the date of issuance of the notice
unless the Board determines a shorter period is necessary because
of the financial condition of the bank or bank holding company.
8-088.7
(c) Response to notice. The bank or bank holding company may file a written response to
the notice within the time period set by the Board. The response may
include —
(1) An explanation why
a directive should not be issued;
(2) Any proposed modification of the terms
of the directive;
(3)
Any relevant information, mitigating circumstances, documentation,
or other evidence in support of the institution’s position regarding
the proposed directive; and
(4) The institution’s plan for attaining
the required level of capital.
8-088.8
(d) Failure to file response. Failure by the
bank or bank holding company to file a written response to the notice
of intent to issue a directive within the specified time period shall
constitute a waiver of the opportunity to respond and shall constitute
consent to the issuance of such directive.
8-088.9
(e) Board consideration of response. After
considering the response of the bank or bank holding company, the
Board may:
(1) Issue the directive
as originally proposed or in modified form;
(2) Determine not to issue a directive
and so notify the bank or bank holding company; or
(3) Seek additional information or clarification
of the response by the bank or bank holding company.
8-089
(f) Contents of directive. Any directive issued by the Board may order the bank or bank holding
company to—
(1) Achieve or maintain
the minimum capital requirement established pursuant to the Board’s
capital adequacy guidelines or the procedures in section 263.85 of
this subpart by a certain date;
(2) Adhere to a previously submitted plan
or submit for approval and adhere to a plan for achieving the minimum
capital requirement by a certain date;
(3) Take other specific action as the Board
directs to achieve the minimum capital levels, including requiring
a reduction of assets or asset growth or restriction on the payment
of dividends; or
(4)
Take any combination of the above actions.
8-089.1
(g) Request for reconsideration of directive. Any state member bank or bank holding company, upon a change in
circumstances, may request the Board to reconsider the terms of a
directive and may propose changes in the plan under which it is operating
to meet the required minimum capital level. The directive and plan
continue in effect while such request is pending before the Board.
