12 C.F.R. § 6.6 Mandatory and discretionary supervisory actions under section 38.
Title 12 - Banks and Banking
(a) Mandatory supervisory actions—(1) Provisions applicable to all banks. All banks are subject to the restrictions contained in section 38(d) of the FDI Act on payment of capital distributions and management fees. (2) Provisions applicable to undercapitalized, significantly undercapitalized, and critically undercapitalized banks. Immediately upon receiving notice or being deemed to have notice, as provided in §6.3, that the bank is undercapitalized, significantly undercapitalized, or critically undercapitalized, the bank shall become subject to the provisions of section 38 of the FDI Act— (i) Restricting payment of capital distributions and management fees (section 38(d)); (ii) Requiring that the OCC monitor the condition of the bank (section 38(e)(1)); (iii) Requiring submission of a capital restoration plan within the schedule established in this subpart (section 38(e)(2)); (iv) Restricting the growth of the bank's assets (section 38(e)(3)); and (v) Requiring prior approval of certain expansion proposals (section 38(e)(4)). (3) Additional provisions applicable to significantly undercapitalized, and critically undercapitalized banks. In addition to the provisions of section 38 of the FDI Act described in paragraph (a)(2) of this section, immediately upon receiving notice or being deemed to have notice, as provided in this subpart, that the bank is significantly undercapitalized, or critically undercapitalized or that the bank is subject to the provisions applicable to institutions that are significantly undercapitalized because it has failed to submit or implement, in any material respect, an acceptable capital restoration plan, the bank shall become subject to the provisions of section 38 of the FDI Act that restrict compensation paid to senior executive officers of the institution (section 38(f)(4)). (4) Additional provisions applicable to critically undercapitalized banks. In addition to the provisions of section 38 of the FDI Act described in paragraphs (a) (2) and (3) of this section, immediately upon receiving notice or being deemed to have notice, as provided in §6.3, that the bank is critically undercapitalized, the bank shall become subject to the provisions of section 38 of the FDI Act— (i) Restricting the activities of the bank (section 38(h)(1)); and (ii) Restricting payments on subordinated debt of the bank (section 38(h)(2)). (b) Discretionary supervisory actions. In taking any action under section 38 that is within the OCC's discretion to take in connection with a bank that is deemed to be undercapitalized, significantly undercapitalized, or critically undercapitalized, or has been reclassified as undercapitalized or significantly undercapitalized; an officer or director of such bank; or a company that controls such bank, the OCC shall follow the procedures for issuing directives under subpart B of this part and subpart N of part 19 of this chapter, unless otherwise provided in section 38 or this part.
Title 12: Banks and Banking
PART 6—PROMPT CORRECTIVE ACTION
Subpart A—Capital Categories
§ 6.6 Mandatory and discretionary supervisory actions under section 38.
