(a) Establishment of capital levels for specific institutions. The
Board may establish a capital level higher than the minimum specified
in the Board’s capital adequacy guidelines for a specific bank
or bank holding company pursuant to—
(1) A written agreement or memorandum of
understanding between the Board or the appropriate Federal Reserve
Bank and the bank or bank holding company;
(2) A temporary or final cease-and-desist
order issued pursuant to section 8(b) or (c) of the FDIA (12 U.S.C.
1818(b) or (c));
(3) A condition for approval of an application
or issuance of a notice of intent not to disapprove a proposal;
(4) Or other similar
means; or
(5) The procedures
set forth in paragraph (b) of this section.
8-089.7
(b) Procedure to establish higher capital
requirement.
(1) Notice. When the Board determines that capital levels above those in the
Board’s Capital Adequacy Guidelines may be necessary and appropriate
for a particular bank or bank holding company under the circumstances,
or when the Board determines that the current capital level of a savings
and loan holding company is not adequate, the Board shall give the
bank or bank holding company notice of the proposed higher capital
requirement and shall permit the bank, bank holding company, or savings
and loan holding company an opportunity to comment upon the proposed
capital level, whether it should be required and, if so, under what
time schedule. The notice shall contain the Board’s reasons
for proposing a higher level of capital.
8-089.8
(2) Response. The bank, bank holding company, or savings and loan holding company
shall be allowed at least 14 days to respond, unless the Board determines
that a shorter period is necessary because of the financial condition
of the bank, bank holding company, or savings and loan holding company.
Failure by the bank, bank holding company, or savings and loan holding
company to file a written response to the notice within the time set
by the Board shall constitute a waiver of the opportunity to respond
and shall constitute consent to issuance of a directive containing
the required minimum capital level.
8-089.9
(3) Board decision. After considering the response of the institution, the Board may
issue a written directive to the bank, bank holding company, or savings
and loan holding company setting an appropriate capital level and
the date on which this capital level will become effective. The Board
may require the bank, bank holding company, or savings and loan holding
company to submit and adhere to a plan for achieving such higher capital
level as the Board may set.
(4) Enforcement
of higher capital level. The Board may enforce the capital level
established pursuant to the procedures described in this section and
any plan submitted to achieve that capital level through the procedures
set forth in section 263.84 of this subpart.
