(a) Schedule for filing plan.
(1) In general. A member bank shall file a written capital-restoration plan with
the appropriate Reserve Bank within 45 days of the date that the bank
receives notice or is deemed to have notice that the bank is undercapitalized,
significantly undercapitalized, or critically undercapitalized, unless
the Board notifies the bank in writing that the plan is to be filed
within a different period. An adequately capitalized bank that has
been required pursuant to section 208.43(c) to comply with supervisory
actions as if the bank were undercapitalized is not required to submit
a capital-restoration plan solely by virtue of the reclassification.
(2) Additional capital-restoration plans. Notwithstanding
paragraph (a)(1) of this section, a bank that has already submitted
and is operating under a capital-restoration plan approved under section
38 and this subpart is not required to submit an additional capital-restoration
plan based on a revised calculation of its capital measures or a reclassification
of the institution under section 208.33(c) unless the Board notifies
the bank that it must submit a new or revised capital plan. A bank
that is notified that it must submit a new or revised capital-restoration
plan shall file the plan in writing with the appropriate Reserve Bank
within 45 days of receiving such notice, unless the Board notifies
the bank in writing that the plan is to be filed within a different
period.
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(b) Contents
of plan. All financial data submitted in connection with a capital-restoration
plan shall be prepared in accordance with the instructions provided
on the call report, unless the Board instructs otherwise. The capital-restoration
plan shall include all of the information required to be filed under
section 38(e)(2) of the FDI Act. A bank that is required to submit
a capital-restoration plan as the result of a reclassification of
the bank pursuant to section 208.43(c) shall include a description
of the steps the bank will take to correct the unsafe or unsound condition
or practice. No plan shall be accepted unless it includes any performance
guarantee described in section 38(e)(2)(C) of that act by each company
that controls the bank.
(c) Review of capital-restoration plans. Within 60 days after receiving
a capital-restoration plan under this subpart, the Board shall provide
written notice to the bank of whether the plan has been approved.
The Board may extend the time within which notice regarding approval
of a plan shall be provided.
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(d) Disapproval of capital plan. If the Board
does not approve a capital-restoration plan, the bank shall submit
a revised capital-restoration plan within the time specified by the
Board. Upon receiving notice that its capital-restoration plan has
not been approved, any undercapitalized member bank (as defined in
section 208.43(b)(3)) shall be subject to all of the provisions of
section 38 and this subpart applicable to significantly undercapitalized
institutions. These provisions shall be applicable until such time
as the Board approves a new or revised capital-restoration plan submitted
by the bank.
(e) Failure
to submit capital-restoration plan. A member bank that is undercapitalized
(as defined in section 208.33(b)(3)) and that fails to submit a written
capital-restoration plan within the period provided in this section
shall, upon the expiration of that period, be subject to all of the
provisions of section 38 and this subpart applicable to significantly
undercapitalized institutions.
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(f) Failure
to implement capital-restoration plan. Any undercapitalized member
bank that fails in any material respect to implement a capital-restoration
plan shall be subject to all of the provisions of section 38 and this
subpart applicable to significantly undercapitalized institutions.
(g) Amendment of capital
plan. A bank that has filed an approved capital-restoration plan
may, after prior written notice to and approval by the Board, amend
the plan to reflect a change in circumstance. Until such time as a
proposed amendment has been approved, the bank shall implement the
capital-restoration plan as approved prior to the proposed amendment.
(h) Notice to FDIC. Within 45 days of the effective date of Board approval of a capital-restoration
plan, or any amendment to a capital-restoration plan, the Board shall
provide a copy of the plan or amendment to the Federal Deposit Insurance
Corporation.
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(i) Performance guarantee
by companies that control a bank.
(1) Limitation
on liability.
(i) Amount
limitation. The aggregate liability under the guarantee provided
under section 38 and this subpart for all companies that control a
specific member bank that is required to submit a capital-restoration
plan under this subpart shall be limited to the lesser of—
(A) an amount
equal to 5.0 percent of the bank’s total assets at the time the bank
was notified or deemed to have notice that the bank was undercapitalized;
or
(B) the amount necessary
to restore the relevant capital measures of the bank to the levels
required for the bank to be classified as adequately capitalized,
as those capital measures and levels are defined at the time that
the bank initially fails to comply with a capital-restoration plan
under this subpart.
(ii) Limit
on duration. The guarantee and limit of liability under section
38 and this subpart shall expire after the Board notifies the bank
that it has remained adequately capitalized for each of four consecutive
calendar quarters. The expiration or fulfillment by a company of a
guarantee of a capital-restoration plan shall not limit the liability
of the company under any guarantee required or provided in connection
with any capital-restoration plan filed by the same bank after expiration
of the first guarantee.
(iii) Collection on guarantee. Each
company that controls a bank shall be jointly and severally liable
for the guarantee for such bank as required under section 38 and this
subpart, and the Board may require and collect payment of the full
amount of that guarantee from any or all of the companies issuing
the guarantee.
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(2) Failure to
provide guarantee. In the event that a bank that is controlled
by any company submits a capital-restoration plan that does not contain
the guarantee required under section 38(e)(2) of the FDI Act, the
bank shall, upon submission of the plan, be subject to the provisions
of section 38 and this subpart that are applicable to banks that have
not submitted an acceptable capital-restoration plan.
(3) Failure to perform guarantee. Failure by any company that controls
a bank to perform fully its guarantee of any capital plan shall constitute
a material failure to implement the plan for purposes of section 38(f)
of the FDI Act. Upon such failure, the bank shall be subject to the
provisions of section 38 and this subpart that are applicable to banks
that have failed in a material respect to implement a capital-restoration
plan.
