12 C.F.R. Subpart B—Operation and Structure
Title 12 - Banks and Banking
(a) No savings association may, without application to and approval by the Office: (1) Combine with any insured depository institution, if the acquiring or resulting institution is to be a savings association; or (2) Assume liability to pay any deposit made in, any insured depository institution. (b)(1) No savings association may, without notifying the Office, as provided in paragraph (h)(1) of this section: (i) Combine with another insured depository institution where a savings association is not the resulting institution; or (ii) In the case of a savings association that meets the conditions for expedited treatment under §516.5 of this chapter, convert, directly or indirectly, to a national or state bank. (2) A savings association that does not meet the conditions for expedited treatment under §516.5 of this chapter may not, directly or indirectly, convert to a national or state bank without prior application to and approval of OTS, as provided in paragraph (h)(2)(ii) of this section. (c) No savings association may make any transfer (excluding transfers subject to paragraphs (a) or (b) of this section) without notice or application to the Office, as provided in paragraph (h)(2) of this section. For purposes of this paragraph, the term “transfer” means purchases or sales of assets or liabilities in bulk not made in the ordinary course of business including, but not limited to, transfers of assets or savings account liabilities, purchases of assets, and assumptions of deposit accounts or other liabilities, and combinations with a depository institution other than an insured depository institution. (d)(1) In determining whether to confer approval for a transaction under paragraphs (a), (b)(2), or (c) of this section, the Office shall take into account the following: (i) The capital level of any resulting savings association; (ii) The financial and managerial resources of the constituent institutions; (iii) The future prospects of the constituent institutions; (iv) The convenience and needs of the communities to be served; (v) The conformity of the transaction to applicable law, regulation, and supervisory policies; (vi) Factors relating to the fairness of and disclosure concerning the transaction, including, but not limited to: (A) Equitable treatment. The transaction should be equitable to all concerned—savings account holders, borrowers, creditors and stockholders (if any) of each savings association—giving proper recognition of and protection to their respective legal rights and interests. The transaction will be closely reviewed for fairness where the transaction does not appear to be the result of arms' length bargaining or, in the case of a stock savings association, where controlling stockholders are receiving different consideration from other stockholders. No finder's or similar fee should be paid to any officer, director, or controlling person of a savings association which is a party to the transaction. (B) Full disclosure. The filing should make full disclosure of all written or oral agreements or understandings by which any person or company will receive, directly or indirectly, any money, property, service, release of pledges made, or other thing of value, whether tangible or intangible, in connection with the transaction. (C) Compensation to officers. Compensation, including deferred compensation, to officers, directors and controlling persons of the disappearing savings association by the resulting institution or an affiliate thereof should not be in excess of a reasonable amount, and should be commensurate with their duties and responsibilities. The filing should fully justify the compensation to be paid to such persons. The transaction will be particularly scrutinized where any of such persons is to receive a material increase in compensation above that paid by the disappearing savings association prior to the commencement of negotiations regarding the proposed transaction. An increase in compensation in excess of the greater of 15% or $10,000 gives rise to presumptions of unreasonableness and sale of control. In the case of such an increase, evidence sufficient to rebut such presumptions should be submitted. (D) Advisory boards. Advisory board members should be elected for a term not exceeding one year. No advisory board fees should be paid to salaried officers or employees of the resulting savings association. The filing should describe and justify the duties and responsibilities and any compensation paid to any advisory board of the resulting savings association that consists of officers, directors or controlling persons of the disappearing institution, particularly if the disappearing institution experienced significant supervisory problems prior to the transaction. No advisory board fees should exceed the director fees paid by the resulting savings association. Advisory board fees that are in excess of 115 percent of the director fees paid by the disappearing savings association prior to commencement of negotiations regarding the transaction give rise to presumptions of unreasonableness and sale of control unless sufficient evidence to rebut such presumptions is submitted. Rebuttal evidence is not required if: (1) The advisory board fees do not exceed the fee that advisory board members of the resulting institution receive for each monthly meeting attended or $150, whichever is greater; or (2) The advisory board fees do not exceed $100 per meeting attended for disappearing savings associations with assets greater than $10,000,000 or $50 per meeting attended for disappearing savings associations with assets of $10,000,000 or less, based on a schedule of 12 meetings per year. (E) The accounting and tax treatment of the transaction; and (F) Fees paid and professional services rendered in connection with the transaction. (2) In conferring approval of a transaction under paragraph (a) of this section, the Office also will consider the competitive impact of the transaction, including whether: (i) The transaction would result in a monopoly, or would be in furtherance of any monopoly or conspiracy to monopolize or to attempt to monopolize the savings association business in any part of the United States; or (ii) The effect of the transaction on any section of the country may be substantially to lessen competition, or tend to create a monopoly, or in any other manner would be in restraint of trade, unless the Office finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the communities to be served. (3) Applications and notices filed under this section shall be upon forms prescribed by the Office. (4) Applications filed under paragraph (a) of this section must be processed in accordance with the time frames set forth in §§516.210 through 516.290 of this chapter, provided that the period for review may be extended only if the Office determines that the applicant has failed to furnish all requested information or that the information submitted is substantially inaccurate, in which case the review period may be extended for up to 30 days. (e)(1) The following procedures apply to applications described in paragraph (a) of this section, unless OTS finds that it must act immediately to prevent the probable default of one of the depository institutions involved: (i) The applicant must publish a public notice of the application in accordance with the procedures in subpart B of part 516 of this chapter. In addition to the initial publication, the applicant must also publish on a weekly basis during the public comment period. (ii) Commenters may submit comments on an application in accordance with the procedures in subpart C of part 516 of this chapter. The public comment period is 30 calendar days after the date of publication of the initial public notice. However, if OTS has advised the Attorney General that an emergency exists requiring expeditious action, the public comment period is 10 calendar days after the date of publication of the initial public notice. (iii) OTS may arrange a meeting in accordance with the procedures in subpart D of part 516 of this chapter. (iv) OTS will request the Attorney General, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation to provide reports on the competitive impacts involved in the transaction. (v) OTS will immediately notify the Attorney General of the approval of the transaction. The applicant may not consummate the transaction before the date established under 12 U.S.C. 1828(c)(6). (2) For applications described in §563.22, certain savings associations described below must provide affected accountholders with a notice of a proposed account transfer and an option of retaining the account in the transferring savings association. The notice must allow affected accountholders at least 30 days to consider whether to retain their accounts in the transferring savings association. The following savings associations must provide the notices: (i) A savings association transferring account liabilities to an institution the accounts of which are not insured by the Deposit Insurance Fund or the National Credit Union Share Insurance Fund; and (ii) Any mutual savings association transferring account liabilities to a stock form depository institution. (f) Automatic approvals by the Office. Applications filed pursuant to paragraph (a) of this section shall be deemed to be approved automatically by the Office 30 calendar days after the Office sends written notice to the applicant that the application is complete, unless: (1) The acquiring savings association does not meet the criteria for expedited treatment under §516.5 of this chapter; (2) The OTS recommends the imposition of non-standard conditions prior to approving the application; (3) The OTS suspends the applicable processing time frames under §516.190 of this chapter; (4) The OTS raises objections to the transaction; (5) The resulting savings association would be one of the 3 largest depository institutions competing in the relevant geographic area where before the transaction there were 5 or fewer depository institutions, the resulting savings association would have 25 percent or more of the total deposits held by depository institutions in the relevant geographic area, and the share of total deposits would have increased by 5 percent or more; (6) The resulting savings association would be one of the 2 largest depository institutions competing in the relevant geographic area where before the transaction there were 6 to 11 depository institutions the resulting savings association would have 30 percent or more of the total deposits held by depositing institutions in the relevant geographic area, and the share of total deposits would have increased by 10 percent or more; (7) The resulting savings association would be one of the 2 largest depository institutions competing in the relevant geographic area where before the transaction there were 12 or more depository institutions, the resulting savings association would have 35 percent or more of the total deposits held by the depository institutions in the relevant geographic area, and the share of total deposits would have increased by 15 percent or more; (8) The Herfindahl-Hirschman Index (HHI) in the relevant geographic area was more than 1800 before the transaction, and the increase in the HHI used by the transaction would be 50 or more; (9) In a transaction involving potential competition, the OTS determines that the acquiring savings association is one of three or fewer potential entrants into the relevant geographic area; (10) The acquiring savings association has assets of $1 billion or more and proposes to acquire assets of $1 billion or more; (11) The savings association that will be the resulting savings association in the transaction has a composite Community Reinvestment Act rating of less than satisfactory, or is otherwise seriously deficient with respect to the Office's nondiscrimination regulations and the deficiencies have not been resolved to the satisfaction of the OTS; (12) The transaction involves any supervisory or assistance agreement with the Office, the Resolution Trust Corporation, or the Federal Deposit Insurance Corporation; (13) The transaction is part of a conversion under part 563b of this chapter; (14) The transaction raises a significant issue of law or policy; or (15) The transaction is opposed by any constituent institution or contested by a competing acquiror. (g) Definitions. (1) The terms used in this section shall have the same meaning as set forth in §552.13(b) of this chapter. (2) Insured depository institution. Insured depository institution has the same meaning as defined in section 3(c)(2) of the Federal Deposit Insurance Act. (3) With regard to paragraph (f) of this section, the term relevant geographic area is used as a substitute for relevant geographic market, which means the area within which the competitive effects of a merger or other combination may be evaluated. The relevant geographic area shall be delineated as a county or similar political subdivision, an area smaller than a county, or an aggregation of counties within which the merging or combining insured depository institutions compete. In addition, the Office may consider commuting patterns, newspaper and other advertising activities, or other factors as the Office deems relevant. (h) Special requirements and procedures for transactions under paragraphs (b) and (c) of this section—(1) Certain transactions with no surviving savings association. The Office must be notified of any transaction under paragraph (b)(1) of this section. Such notification must be submitted to the OTS at least 30 days prior to the effective date of the transaction, but not later than the date on which an application relating to the proposed transaction is filed with the primary regulator of the resulting institution; the Office may, upon request or on its own initiative, shorten the 30-day prior notification requirement. Notifications under this paragraph must demonstrate compliance with applicable stockholder or accountholder approval requirements. Where the savings association submitting the notification maintains a liquidation account established pursuant to part 563b of this chapter, the notification must state that the resulting institution will assume such liquidation account. The notification may be in the form of either a letter describing the material features of the transaction or a copy of a filing made with another Federal or state regulatory agency seeking approval from that agency for the transaction under the Bank Merger Act or other applicable statute. If the action contemplated by the notification is not completed within one year after the Office's receipt of the notification, a new notification must be submitted to the Office. (2) Other transfer transactions—(i) Expedited treatment. A notice in conformity with §516.25(a) of this chapter may be submitted to OTS under §516.40 of this chapter for any transaction under paragraph (c) of this section, provided all constituent savings associations meet the conditions for expedited treatment under §516.5 of this chapter. Notices submitted under this paragraph must be deemed approved automatically by OTS 30 days after receipt, unless OTS advises the applicant in writing prior to the expiration of such period that the proposed transaction may not be consummated without OTS's approval of an application under paragraphs (h)(2)(ii) or (h)(2)(iii) of this section. (ii) Standard treatment. An application in conformity with §516.25(b) of this chapter and paragraph (d) of this section must be submitted to OTS under §516.40 by each savings association participating in a transaction under paragraph (b)(2) or (c) of this section, where any constituent savings association does not meet the conditions for expedited treatment under §516.5 of this chapter. Applications under this paragraph must be processed in accordance with the procedures in part 516, subparts A and E of this chapter. [54 FR 49552, Nov. 30, 1989, as amended at 55 FR 13514, Apr. 11, 1990; 57 FR 14344, Apr. 20, 1992; 59 FR 44624, Aug. 30, 1994; 59 FR 66159, Dec. 23, 1994; 62 FR 64146, Dec. 4, 1997; 66 FR 13007, Mar. 2, 2001; 69 FR 68250, Nov. 24, 2004; 71 FR 19811, Apr. 18, 2006] No savings association shall use advertising (which includes print or broadcast media, displays or signs, stationery, and all other promotional materials), or make any representation which is inaccurate in any particular or which in any way misrepresents its services, contracts, investments, or financial condition. [54 FR 49552, Nov. 30, 1989, as amended at 58 FR 4313, Jan. 14, 1993] (a) Directors—(1) Requirements. The composition of the board of directors of a savings association must be in accordance with the following requirements: (i) A majority of the directors must not be salaried officers or employees of the savings association or of any subsidiary or (except in the case of a savings association having 80% or more of any class of voting shares owned by a holding company) any holding company affiliate thereof. (ii) Not more than two of the directors may be members of the same immediate family. (iii) Not more than one director may be an attorney with a particular law firm. (2) Prospective application. In the case of an association whose board of directors does not conform with any requirement set forth in paragraph (a)(1) of this section as of October 5, 1983, this paragraph (a) shall not prohibit the uninterrupted service, including re-election and re-appointment, of any person serving on the board of directors at that date. (b) [Reserved] [54 FR 49552, Nov. 30, 1989, as amended at 58 FR 4313, Jan. 14, 1993] (a) Safe harbor for combined-balance discounts. A savings and loan holding company or any savings association or any affiliate of either may vary the consideration for any product or package of products based on a customer's maintaining a combined minimum balance in certain products specified by the company varying the consideration (eligible products), if: (1) That company (if it is a savings association) or a savings association affiliate of that company (if it is not a savings association) offers deposits, and all such deposits are eligible products; and (2) Balances in deposits count at least as much as non-deposit products toward the minimum balance. (b) Limitations on exception. This exception shall terminate upon a finding by the OTS that the arrangement is resulting in anti-competitive practices. The eligibility of a savings and loan holding company or savings association or affiliate of either to operate under this exception shall terminate upon a finding by the OTS that its exercise of this authority is resulting in anti-competitive practices. [61 FR 60184, Nov. 27, 1996] (a) General. A savings association may enter into an employment contract with its officers and other employees only in accordance with the requirements of this section. All employment contracts shall be in writing and shall be approved specifically by an association's board of directors. An association shall not enter into an employment contract with any of its officers or other employees if such contract would constitute an unsafe or unsound practice. The making of such an employment contract would be an unsafe or unsound practice if such contract could lead to material financial loss or damage to the association or could interfere materially with the exercise by the members of its board of directors of their duty or discretion provided by law, charter, bylaw or regulation as to the employment or termination of employment of an officer or employee of the association. This may occur, depending upon the circumstances of the case, where an employment contract provides for an excessive term. (b) Required provisions. Each employment contract shall provide that: (1) The association's board of directors may terminate the officer or employee's employment at any time, but any termination by the association's board of directors other than termination for cause, shall not prejudice the officer or employee's right to compensation or other benefits under the contract. The officer or employee shall have no right to receive compensation or other benefits for any period after termination for cause. Termination for cause shall include termination because of the officer or employee's personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule, or regulation (other than traffic violations or similar offenses) or final cease-and-desist order, or material breach of any provision of the contract. (2) If the officer or employee is suspended and/or temporarily prohibited from participating in the conduct of the association's affairs by a notice served under section 8 (e)(3) or (g)(1) of Federal Deposit Insurance Act (12 U.S.C. 1818 (e)(3) and (g)(1)) the association's obligations under the contract shall be suspended as of the date of service unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the association may in its discretion (i) pay the officer or employee all or part of the compensation withheld while its contract obligations were suspended, and (ii) reinstate (in whole or in part) any of its obligations which were suspended. (3) If the officer or employee is removed and/or permanently prohibited from participating in the conduct of the association's affairs by an order issued under section 8 (e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818 (e)(4) or (g)(1)), all obligations of the association under the contract shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected. (4) If the savings association is in default (as defined in section 3(x)(1) of the Federal Deposit Insurance Act), all obligations under the contract shall terminate as of the date of default, but this paragraph (b)(4) shall not affect any vested rights of the contracting parties: Provided, that this paragraph (b)(4) need not be included in an employment contract if prior written approval is secured from the Director or his or her designee. (5) All obligations under the contract shall be terminated, except to the extent determined that continuation of the contract is necessary of the continued operation of the association (i) By the Director or his or her designee, at the time the Federal Deposit Insurance Corporation or Resolution Trust Corporation enters into an agreement to provide assistance to or on behalf of the association under the authority contained in 13(c) of the Federal Deposit Insurance Act; or (ii) By the Director or his or her designee, at the time the Director or his or her designee approves a supervisory merger to resolve problems related to operation of the association or when the association is determined by the Director to be in an unsafe or unsound condition. Any rights of the parties that have already vested, however, shall not be affected by such action. (a) Scope. (1) This section implements section 11(a) of the Home Owners' Loan Act (12 U.S.C. 1468(a)). Section 11(a) applies sections 23A and 23B of the FRA (12 U.S.C. 371c and 371c1) to every savings association in the same manner and to the same extent as if the association were a member bank; prohibits certain types of transactions with affiliates; and authorizes OTS to impose additional restrictions on a savings association's transactions with affiliates. (2) For the purposes of this section, “savings association” is defined at section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813), and also includes any savings bank or any cooperative bank that is a savings association under 12 U.S.C. 1467a(l). A non-affiliate subsidiary of a savings association as described in paragraph (b)(11) of this section is treated as part of the savings association. (b) Sections 23A and 23B of the FRA/Regulation W. A savings association must comply with sections 23A and 23B of the Federal Reserve Act and the implementing regulations at 12 CFR part 223 (Regulation W) as if it were a member bank, except as described in the following chart. In addition, a savings association should read all references to “the Board” or “appropriate federal banking agency” to refer only to “OTS,” except for references at 12 CFR 223.2(a)(9)(iv), 223.3(h), 223.3(z), 223.14(c)(4), 223.43, and 223.55. (c) Additional prohibitions and restrictions. A savings association must comply with the additional prohibitions and restrictions in this paragraph. Except as described in paragraph (b) of this section, the definitions in 12 CFR part 223 apply to these additional prohibitions and restrictions. (1) Loans and extensions of credit. (i) A savings association may not make a loan or other extension of credit to an affiliate, unless the affiliate is solely engaged in the activities described at 12 U.S.C. 1467a(c)(2)(F)(i), as defined in §584.2–2 of this chapter. A loan or extension of credit to a third party is not prohibited merely because proceeds of the transaction are used for the benefit of, or are transferred to, an affiliate. (ii) If OTS determines that a particular transaction is, in substance, a loan or extension of credit to an affiliate that is engaged in activities other than those described at 12 U.S.C. 1467a(c)(2)(F)(i), as defined in §584.2–2 of this chapter, or OTS has other supervisory concerns concerning the transaction, OTS may inform the savings association that the transaction is prohibited under this paragraph (c)(1), and require the savings association to divest the loan, unwind the transaction, or take other appropriate action. (2) Purchases or investments in securities. A savings association may not purchase or invest in securities issued by any affiliate other than with respect to shares of a subsidiary. For the purposes of this paragraph (c)(2), subsidiary includes a bank and a savings association. (3) Recordkeeping. A savings association must make and retain records that reflect, in reasonable detail, all transactions between the savings association and its affiliates and any other person to the extent that the proceeds of a transaction are used for the benefit of, or transferred to, an affiliate. At a minimum, these records must: (i) Identify the affiliate; (ii) Specify the dollar amount of the transaction and demonstrate that this amount is within the quantitative limits in 12 CFR 223.11 and 223.12, or that the transaction is not subject to those limits; (iii) Indicate whether the transaction involves a low-quality asset; (iv) Identify the type and amount of any collateral involved in the transaction and demonstrate that this collateral meets the requirements in 12 CFR 223.14 or that the transaction is not subject to those requirements; (v) Demonstrate that the transaction complies with 12 CFR part 223, subpart F or that the transaction is not subject to those requirements; (vi) Demonstrate that all loans and extensions of credit to affiliates comply with paragraph (c)(1) of this section; and (vii) Be readily accessible for examination and supervisory purposes. (4) Notice requirement. (i) OTS may require a savings association to notify the agency before the savings association may engage in a transaction with an affiliate or a subsidiary (other than exempt transactions under 12 CFR part 223). OTS may impose this requirement if: (A) The savings association is in troubled condition as defined at §563.555 of this part; (B) The savings association does not meet its regulatory capital requirements; (C) The savings association commenced de novo operations within the past two years; (D) OTS approved an application or notice under 12 CFR part 574 involving the savings association or its holding company within the past two years; (E) The savings association entered into a consent to merge or a supervisory agreement within the past two years; or (F) OTS or another banking agency initiated a formal enforcement proceeding against the savings association and the proceeding is pending. (ii) OTS must notify the savings association in writing that it has imposed the notice requirement and must identify the circumstance listed in paragraph (c)(4)(i) of this section that supports the imposition of the notice requirement. (iii) If OTS has imposed the notice requirement under this paragraph, a savings association must provide a written notice to OTS at least 30 days before the savings association may enter into a transaction with an affiliate or a subsidiary. The written notice must include a full description of the transaction. If OTS does not object during the 30-day period, the savings association may proceed with the proposed transaction. [68 FR 57797, Oct. 7, 2003, as amended at 68 FR 75110, Dec. 30, 2003] Pursuant to 12 U.S.C. 1463(a) and 1468, a savings association, its subsidiaries and its insiders (as defined) shall be subject to the restrictions contained in 12 CFR Part 215, subparts A and B of the Federal Reserve Board's Regulation O, with the exception of 12 CFR 215.13, in the same manner and to the same extent as if the association were a bank and a member bank of the Federal Reserve System, except that: (a) Such provisions shall be administered and enforced by the OTS; (b) References to the term “bank holding company” shall be deemed to refer to “savings and loan holding company”; (c) References to “report of condition filed under 12 U.S.C. 1817(a)(3)” shall be deemed to refer to “Thrift Financial Report”; (d) The term subsidiary includes a savings association that is controlled by a company (including for this purpose an insured depository institution) that is a savings and loan holding company. A company has control over a saving association if it: directly or indirectly, or acting through one or more other persons owns, controls, or has the power to vote 25 percent or more of any class of voting securities; or would be deemed to control the company under §574.4(a) of this chapter or presumed to control the company under §574.4(b) of this chapter, and in the latter case, control has not been rebutted. Notwithstanding any other provision of this section, no company shall be deemed to own or control another by virtue of its ownership or control of shares in a fiduciary capacity. When used to refer to a subsidiary of a savings association, the term subsidiary means a “subsidiary” that is controlled by the savings association within the meaning of 12 CFR part 574 of this chapter. (e) References to the Reserve Bank or the Comptroller shall be deemed to include the Director of OTS; and (f) References to the term “unimpaired capital and unimpaired surplus” shall be deemed to refer to “unimpaired capital and unimpaired surplus” as defined at §560.93(b)(11) of this part. [57 FR 45980, Oct. 6, 1992, as amended at 59 FR 53571, Oct. 25, 1994; 60 FR 66869, Dec. 27, 1995; 67 FR 77918, Dec. 20, 2002; 68 FR 57798, Oct. 7, 2003; 69 FR 76602, Dec. 22, 2004] (a) General. No savings association or service corporation thereof shall sponsor an employee pension plan which, because of unreasonable costs or any other reason, could lead to material financial loss or damage to the sponsor. For purposes of this section, an employee pension plan is defined in section 3(2) of the Employee Retirement Income Security Act of 1974, as amended. The prospective obligation or liability of a plan sponsor to each plan participant shall be stated in or determinable from the plan, and, for a defined benefit plan, shall also be based upon an actuarial estimate of future experience under the plan. (b) Funding. Actuarial cost methods permitted under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1954, as amended, shall be used to determine plan funding. (c) Plan amendment. A plan may be amended to provide reasonable annual cost-of-living increases to retired participants: Provided, That (1) Any such increase shall be for a period and amount determined by the sponsor's board of directors, but in no event shall it exceed the annual increase in the Consumer Price Index published by the Bureau of Labor Statistics; and (2) No increase shall be granted unless (i) anticipated charges to net income for future periods have first been found by such board of directors to be reasonable and are documented by appropriate resolution and supporting analysis; and (ii) the increase will not reduce the association's regulatory capital below its regulatory capital requirement. (d) Termination. The plan shall permit the sponsor's board of directors and its successors to terminate such plan. Notice of intent to terminate shall be filed with the OTS at least 60 days prior to the proposed termination date. (e) Records. Each savings association or service corporation maintaining a plan not subject to recordkeeping and reporting requirements of the Employee Retirement Income Security Act of 1974, and the Internal Revenue Code of 1954, as amended, shall establish and maintain records containing the following: (1) Plan description; (2) Schedule of participants and beneficiaries; (3) Schedule of participants and beneficiaries' rights and obligations; (4) Plan's financial statements; and (5) Except for defined contribution plans, an opinion signed by an enrolled actuary (as defined by the Employee Retirement Income Security Act of 1974) affirming that actuarial assumptions in the aggregate are reasonable, take into account the plan's experience and expectations, and represent the actuary's best estimate of the plan's projected experiences. [59 FR 66159, Dec. 23, 1994]
Title 12: Banks and Banking
PART 563—SAVINGS ASSOCIATIONS—OPERATIONS
Subpart B—Operation and Structure
§ 563.22 Merger, consolidation, purchase or sale of assets, or assumption of liabilities.
§ 563.27 Advertising.
§ 563.33 Directors, officers, and employees.
§ 563.36 Tying restriction exception.
§ 563.39 Employment contracts.
§ 563.41 Transactions with affiliates.
------------------------------------------------------------------------ Provision of Regulation W Application------------------------------------------------------------------------(1) 12 CFR 223.1_Authority, purpose, Does not apply. Section and scope. 563.41(a) addresses these matters.(2) 12 CFR 223.2(a)(8)_``Affiliate'' Does not apply. Savings includes a financial subsidiary. association subsidiaries do not meet the statutory definition of financial subsidiary.(3) 12 CFR 223.2(a)(12)_Determination Read to include the following that ``affiliate'' includes other statement: ``Affiliate also types of companies. includes any company that OTS determines, by order or regulation, to present a risk to the safety and soundness of the savings association.''(4) 12 CFR Does not apply. Savings 223.2(b)(1)(ii)_``Affiliate'' includes association subsidiaries do a subsidiary that is a financial not meet the statutory subsidiary. definition of financial subsidiary.(5) 12 CFR 223.3(d)_Definition of Does not apply. Capital stock ``capital stock and surplus.''. and surplus means ``unimpaired capital and unimpaired surplus,'' as defined in 12 CFR 560.93(b)(11).(6) 12 CFR 223.3(h)(1)_Section 23A Read to incorporate § covered transactions include an 563.41(c)(1), which prohibits extension of credit to the affiliate. loans or extensions of credit to an affiliate, unless the affiliate is engaged only in the activities described at 12 U.S.C. 1467a(c)(2)(F)(i), as defined in § 584.2-2 of this chapter.(7) 12 CFR 223.3(h)(2)_Section 23A Read to incorporate § covered transactions include a 563.41(c)(2), which prohibits purchase of or investment in purchases and investments in securities issued by an affiliate. securities issued by an affiliate, other than with respect to shares of a subsidiary.(8) 12 CFR 223.3(k)_Definition of Read to include the following ``depository institution.''. statement: ``For the purposes of this definition, a non- affiliate subsidiary of a savings association is treated as part of the depository institution.''(9) 12 CFR 223.3(p)_Definition of Does not apply. Savings ``financial subsidiary.''. association subsidiaries do not meet the statutory definition of financial subsidiary.(10) 12 CFR 223.3(w)_Definition of Read to include the following ``member bank.''. statement: ``Member bank also includes a savings association. For purposes of this definition, a non- affiliate subsidiary of a savings association is treated as part of the savings association.''(11) 12 CFR 223.3(aa)_Definition of Does not apply. Other OTS ``operating subsidiary.''. regulations include a conflicting definition of this same term. Instead, OTS uses the phrase ``non-affiliate subsidiary.'' A non-affiliate subsidiary is a subsidiary of a savings association other than a subsidiary described at 12 CFR 223.2(b)(1)(i), (iii) through (v).(12) 12 CFR 223.3(ii)_Definition of Read to include the following ``subsidiary.''. statement: ``A subsidiary of a savings association means a company that is controlled by the savings association.''(13) 12 CFR 223.3(kk)_Definition of Read to include the following ``well capitalized.''. statement: ``For a savings and loan holding company, however, well-capitalized means that the holding company significantly exceeds OTS expectations for the amount of capital needed to adequately support the holding company's risk profile, as determined by OTS on a case-by-case basis.''(14) 12 CFR 223.31_Application of Read to refer to ``a non- section 23A to an acquisition of an affiliate subsidiary'' instead affiliate that becomes an operating of ``operating subsidiary.'' subsidiary.(15) 12 CFR 223.32_Rules that apply to Does not apply. Savings financial subsidiaries of a bank. association subsidiaries do not meet the statutory definition of financial subsidiary.(16) 12 CFR 223.42(f)(2)_Exemption for Read to refer to ``Thrift purchasing certain marketable Financial Report'' instead of securities. ``Call Report.'' References to ``state member bank'' are unchanged.(17) 12 CFR 223.42(g)(2)_Exemption for Read to refer to ``Thrift purchasing municipal securities. Financial Report'' instead of ``Call Report.'' References to ``state member bank'' are unchanged.(18) 12 CFR 223.61_Application of Does not apply to savings sections 23A and 23B to U.S. branches associations or their and agencies of foreign banks. subsidiaries.------------------------------------------------------------------------
§ 563.43 Loans by savings associations to their executive officers, directors and principal shareholders.
§ 563.47 Pension plans.
