(a) Notice of intent to issue directive.
(1) In general. The Board shall provide an undercapitalized, significantly undercapitalized,
or critically undercapitalized state member bank or, where appropriate,
any company that controls the bank, prior written notice of the Board’s
intention to issue a directive requiring such bank or company to take
actions or to follow proscriptions described in section 38 that are
within the Board’s discretion to require or impose under section 38
of the FDI Act, including sections 38(e)(5), (f)(2), (f)(3), or (f)(5).
The bank shall have such time to respond to a proposed directive as
provided by the Board under paragraph (c) of this section.
(2) Immediate issuance of final directive. If the Board finds it
necessary in order to carry out the purposes of section 38 of the
FDI Act, the Board may, without providing the notice prescribed in
paragraph (a)(1) of this section, issue a directive requiring a state member
bank or any company that controls a state member bank immediately
to take actions or to follow proscriptions described in section 38
that are within the Board’s discretion to require or impose under
section 38 of the FDI Act, including section 38(e)(5), (f)(2), (f)(3),
or (f)(5). A bank or company that is subject to such an immediately
effective directive may submit a written appeal of the directive to
the Board. Such an appeal must be received by the Board within 14
calendar days of the issuance of the directive, unless the Board permits
a longer period. The Board shall consider any such appeal, if filed
in a timely matter, within 60 days of receiving the appeal. During
such period of review, the directive shall remain in effect unless
the Board, in its sole discretion, stays the effectiveness of the
directive.
8-094.5
(b) Contents
of notice. A notice of intention to issue a directive shall include—
(1) a statement of the bank’s capital measures
and capital levels;
(2) a description of the restrictions, prohibitions, or affirmative
actions that the Board proposes to impose or require;
(3) the proposed date when such restrictions
or prohibitions would be effective or the proposed date for completion
of such affirmative actions; and
(4) the date by which the bank or company
subject to the directive may file with the Board a written response
to the notice.
8-094.6
(c) Response to notice.
(1) Time for
response. A bank or company may file a written response to a
notice of intent to issue a directive within the time period set by
the Board. The date shall be at least 14 calendar days from the date
of the notice unless the Board determines that a shorter period is
appropriate in light of the financial condition of the bank or other
relevant circumstances.
(2) Content of response. The response
should include—
(i) an explanation why the action proposed
by the Board is not an appropriate exercise of discretion under section
38;
(ii) any recommended
modification of the proposed directive; and
(iii) any other relevant information,
mitigating circumstances, documentation, or other evidence in support
of the position of the bank or company regarding the proposed directive.
8-094.7
(d) Board
consideration of response. After considering the response, the
Board may—
(1) issue the directive
as proposed or in modified form;
(2) determine not to issue the directive
and so notify the bank or company; or
(3) seek additional information or clarification
of the response from the bank or company, or any other relevant source.
8-094.8
(e) Failure to file response. Failure by a bank or company to file with the Board, within the
specified time period, a written response to a proposed directive
shall constitute a waiver of the opportunity to respond and shall
constitute consent to the issuance of the directive.
(f) Request for modification or rescission
of directive. Any bank or company that is subject to a directive
under this subpart may, upon a change in circumstances, request in
writing that the Board reconsider the terms of the directive, and
may propose that the directive be rescinded or modified. Unless otherwise
ordered by the Board, the directive shall continue in place while
such request is pending before the Board.
