The following transactions are
not subject to the quantitative limits of sections 223.11 and 223.12
or the collateral requirements of section 223.14. The transactions
are, however, subject to the safety-and-soundness requirement of section
223.13 and the prohibition on the purchase of a low-quality asset
of section 223.15.
(a) Parent institution/subsidiary institution transactions. Transactions
with a depository institution if the member bank controls 80 percent
or more of the voting securities of the depository institution or
the depository institution controls 80 percent or more of the voting
securities of the member bank.
(b) Transactions between a member bank and a depository
institution owned by the same holding company. Transactions with
a depository institution if the same company controls 80 percent or
more of the voting securities of the member bank and the depository
institution.
(c) Certain
loan purchases from an affiliated depository institution. Purchasing
a loan on a nonrecourse basis from an affiliated depository institution.
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(d) Internal-corporate-reorganization
transactions. Purchasing assets from an affiliate (including
in connection with a transfer of securities issued by an affiliate
to a member bank described in paragraph (a) of section 223.31), if—
(1) the asset purchase is
part of an internal corporate reorganization of a holding company
and involves the transfer of all or substantially all of the shares
or assets of an affiliate or of a division or department of an affiliate;
(2) the member bank provides
its appropriate federal banking agency and the Board with written
notice of the transaction before consummation, including a description
of the primary business activities of the affiliate and an indication
of the proposed date of the asset purchase;
(3) the member bank’s top-tier holding
company commits to its appropriate federal banking agency and the
Board before consummation either—
(i) to make quarterly cash
contributions to the member bank, for a two-year period following
the member bank’s purchase, equal to the book value plus any write-downs
taken by the member bank, of any transferred assets that have become
low-quality assets during the quarter; or
(ii) to repurchase, on a quarterly basis
for a two-year period following the member bank’s purchase, at a price
equal to the book value plus any write-downs taken by the member bank,
any transferred assets that have become low-quality assets during
the quarter;
(4) the member bank’s top-tier holding company complies with the
commitment made under paragraph (d)(3) of this section;
(5) a majority of the member
bank’s directors reviews and approves the transaction before consummation;
(6) the value of the covered
transaction (as computed under this part), when aggregated with the
value of any other covered transactions (as computed under this part)
engaged in by the member bank under this exemption during the preceding
12 calendar months, represents less than 10 percent of the member
bank’s capital stock and surplus (or such higher amount, up to 25
percent of the member bank’s capital stock and surplus, as may be
permitted by the member bank’s appropriate federal banking agency
after conducting a review of the member bank’s financial condition
and the quality of the assets transferred to the member bank); and
(7) the holding company
and all its subsidiary member banks and other subsidiary depository
institutions are well capitalized and well managed and would remain
well capitalized upon consummation of the transaction.
