§ 1468. — Transactions with affiliates; extensions of credit to executive officers, directors, and principal shareholders.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1468]
TITLE 12--BANKS AND BANKING
CHAPTER 12--SAVINGS ASSOCIATIONS
Sec. 1468. Transactions with affiliates; extensions of credit to
executive officers, directors, and principal shareholders
(a) Affiliate transactions
(1) In general
Sections 23A and 23B of the Federal Reserve Act [12 U.S.C. 371c
and 371c-1] shall apply to every savings association in the same
manner and to the same extent as if the savings association were a
member bank (as defined in such Act [12 U.S.C. 221 et seq.]), except
that--
(A) no loan or other extension of credit may be made to any
affiliate unless that affiliate is engaged only in activities
described in section 1467a(c)(2)(F)(i) of this title; and
(B) no savings association may enter into any transaction
described in section 23A(b)(7)(B) of the Federal Reserve Act
with any affiliate other than with respect to shares of a
subsidiary.
(2) Sister bank exemption made available to savings
associations
(A) Savings associations controlled by bank holding companies
Every savings association more than 80 percent of the voting
stock of which is owned by a company described in section
1467a(c)(8) of this title shall be treated as a bank for
purposes of section 23A(d)(1) and section 23B of the Federal
Reserve Act, if every savings association and bank controlled by
such company complies with all applicable capital requirements
on a fully phased-in basis and without reliance on goodwill.
(B) Savings associations generally
Effective on and after January 1, 1995, every savings
association shall be treated as a bank for purposes of section
23A(d)(1) and section 23B of the Federal Reserve Act.
(3) Affiliates described
Any company that would be an affiliate (as defined in sections
23A and 23B of the Federal Reserve Act) of any savings association
if such savings association were a member bank (as such term is
defined in such Act) shall be deemed to be an affiliate of such
savings association for purposes of paragraph (1).
(4) Additional restrictions authorized
The Director may impose such additional restrictions on any
transaction between any savings association and any affiliate of
such savings association as the Director determines to be necessary
to protect the safety and soundness of the savings association.
(b) Extensions of credit to executive officers, directors, and principal
shareholders
(1) In general
Subsections (g) and (h) of section 22 of the Federal Reserve Act
[12 U.S.C. 375a, 375b] shall apply to every savings association in
the same manner and to the same extent as if the savings association
were a member bank (as defined in such Act).
(2) Additional restrictions authorized
The Director may impose such additional restrictions on loans or
extensions of credit to any director or executive officer of any
savings association, or any person who directly or indirectly owns,
controls, or has the power to vote more than 10 percent of any class
of voting securities of a savings association, as the Director
determines to be necessary to protect the safety and soundness of
the savings association.
(c) Administrative enforcement
The Director may take enforcement action with respect to violations
of this section pursuant to section 8 or 18(j) of the Federal Deposit
Insurance Act [12 U.S.C. 1818 or 1828(j)], as appropriate.
(June 13, 1933, ch. 64, Sec. 11, formerly Sec. 9, 48 Stat. 135; Apr. 27,
1934, ch. 168, Sec. 15, 48 Stat. 647; renumbered Sec. 11, Pub. L. 100-
86, title IV, Sec. 402(a), Aug. 10, 1987, 101 Stat. 605; Pub. L. 101-73,
title III, Sec. 301, Aug. 9, 1989, 103 Stat. 342; Pub. L. 102-242, title
III, Sec. 306(i), Dec. 19, 1991, 105 Stat. 2359; Pub. L. 103-325, title
III, Sec. 316, Sept. 23, 1994, 108 Stat. 2223.)
References in Text
The Federal Reserve Act, referred to in subsecs. (a)(1), (3) and
(b)(1), is act Dec. 23, 1913, ch. 6, 38 Stat. 251, as amended, which is
classified principally to chapter 3 (Sec. 221 et seq.) of this title.
For complete classification of this Act to the Code, see References in
Text note set out under section 226 of this title and Tables.
Amendments
1994--Subsec. (a)(2)(C). Pub. L. 103-325, Sec. 316(b), struck out
heading and text of subpar. (C) which read as follows:
``(C) Transition rule for well capitalized savings associations.--
``(i) In general.--A savings association that is well
capitalized (as defined in section 1831o of this title), as
determined without including goodwill in calculating core capital,
shall be treated as a bank for purposes of section 371c(d)(1) of
this title and section 371c-1 of this title.
``(ii) Liability of commonly controlled depository
institutions.--Any savings association that engages under clause (i)
in a transaction that would not otherwise be permissible under this
subsection, and any affiliated insured bank that is commonly
controlled (as defined in section 1815(e)(9) of this title), shall
be subject to subsection (e) of section 1815 of this title as if
paragraph (6) of that subsection did not apply.''
Pub. L. 103-325, Sec. 316(a), added subpar. (C).
1991--Subsec. (b)(1). Pub. L. 102-242 substituted ``Subsections (g)
and (h) of section 22'' for ``Section 22(h)''.
1989--Pub. L. 101-73 amended section generally, substituting
subsecs. (a) to (c) relating to affiliate transactions, extensions of
credit, and administrative enforcement, for former undesignated
paragraph relating to separability of provisions.
1934--Act Apr. 27, 1934, reenacted section without change.
Effective Date of 1994 Amendment
Section 316(b) of Pub. L. 103-325 provided that amendment made by
that section is effective Jan. 1, 1995.
Effective Date of 1991 Amendment
Amendment by Pub. L. 102-242 effective upon the earlier of the date
on which final regulations under section 306(m)(1) of Pub. L. 102-242
become effective or 150 days after Dec. 19, 1991, see section 306(l) of
Pub. L. 102-242, set out as a note under section 375b of this title.
Transitional Rule for Certain Transactions With Affiliates
Section 304 of Pub. L. 101-73 provided that:
``(a) Consistency of Certain Regulations With Section 23A of the
Federal Reserve Act [12 U.S.C. 371c].--Not later than 6 months after the
date of enactment of this Act [Aug. 9, 1989], the Director of the Office
of Thrift Supervision shall revise the Director's conflicts regulations
so as not to prohibit a thrift institution from purchasing mortgages
from a mortgage-banking affiliate to the same extent as a member bank
may do so under section 250.250 of title 12, Code of Federal
Regulations.
``(b) Transitional Period.--Notwithstanding section 11(a) of the
Home Owners' Loan Act [12 U.S.C. 1468(a)] (as added by section 301 of
this Act), a thrift institution that, before May 1, 1989, had received
approval from the Federal Savings and Loan Insurance Corporation
pursuant to section 408(d)(6) of the National Housing Act [former 12
U.S.C. 1730a(d)(6)] as then in effect to purchase mortgages from a
mortgage-banking affiliate may, during the 6-month period following the
date on which final regulations are prescribed pursuant to subsection
(a), continue to engage in transactions for which it had received such
approval. Any savings association that engages in such transactions
pursuant to this subsection shall comply with the standards that were
applicable under section 408(d)(6) as in effect on May 1, 1989.
``(c) Authority To Extend Regulatory Approvals That Would Otherwise
Lapse During the Transitional Period.--The Director of the Office of
Thrift Supervision may extend until the expiration of the 6-month period
described in subsection (b) any approval granted by the Federal Savings
and Loan Insurance Corporation that expires or would expire before the
expiration of that 6-month period. In determining whether to grant such
exemptions, the Director shall apply the standards that were applicable
under section 408(d)(6) of the National Housing Act [former 12 U.S.C.
1730a(d)(6)] as in effect on May 1, 1989.''
Section Referred to in Other Sections
This section is referred to in sections 1467a, 1831e of this title.
