§ 1831y. — CRA sunshine requirements.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1831y]
TITLE 12--BANKS AND BANKING
CHAPTER 16--FEDERAL DEPOSIT INSURANCE CORPORATION
Sec. 1831y. CRA sunshine requirements
(a) Public disclosure of agreements
Any agreement (as defined in subsection (e) of this section) entered
into after November 12, 1999, by an insured depository institution or
affiliate with a nongovernmental entity or person made pursuant to or in
connection with the Community Reinvestment Act of 1977 [12 U.S.C. 2901
et seq.] involving funds or other resources of such insured depository
institution or affiliate--
(1) shall be in its entirety fully disclosed, and the full text
thereof made available to the appropriate Federal banking agency
with supervisory responsibility over the insured depository
institution and to the public by each party to the agreement; and
(2) shall obligate each party to comply with this section.
(b) Annual report of activity by insured depository institution
Each insured depository institution or affiliate that is a party to
an agreement described in subsection (a) of this section shall report to
the appropriate Federal banking agency with supervisory responsibility
over the insured depository institution, not less frequently than once
each year, such information as the Federal banking agency may by rule
require relating to the following actions taken by the party pursuant to
the agreement during the preceding 12-month period:
(1) Payments, fees, or loans made to any party to the agreement
or received from any party to the agreement and the terms and
conditions of the same.
(2) Aggregate data on loans, investments, and services provided
by each party in its community or communities pursuant to the
agreement.
(3) Such other pertinent matters as determined by regulation by
the appropriate Federal banking agency with supervisory
responsibility over the insured depository institution.
(c) Annual report of activity by nongovernmental entities
(1) In general
Each nongovernmental entity or person that is not an affiliate
of an insured depository institution and that is a party to an
agreement described in subsection (a) of this section shall report
to the appropriate Federal banking agency with supervisory
responsibility over the insured depository institution that is a
party to such agreement, not less frequently than once each year, an
accounting of the use of funds received pursuant to each such
agreement during the preceding 12-month period.
(2) Submission to insured depository institution
A nongovernmental entity or person referred to in paragraph (1)
may comply with the reporting requirement in such paragraph by
transmitting the report to the insured depository institution that
is a party to the agreement, and such insured depository institution
shall promptly transmit such report to the appropriate Federal
banking agency with supervisory authority over the insured
depository institution.
(3) Information to be included
The accounting referred to in paragraph (1) shall include a
detailed, itemized list of the uses to which such funds have been
made, including compensation, administrative expenses, travel,
entertainment, consulting and professional fees paid, and such other
categories, as determined by regulation by the appropriate Federal
banking agency with supervisory responsibility over the insured
depository institution.
(d) Applicability
Subsections (b) and (c) of this section shall not apply with respect
to any agreement entered into before the end of the 6-month period
beginning on November 12, 1999.
(e) Definitions
(1) Agreement
For purposes of this section, the term ``agreement''--
(A) means--
(i) any written contract, written arrangement, or other
written understanding that provides for cash payments,
grants, or other consideration with a value in excess of
$10,000, or for loans the aggregate amount of principal of
which exceeds $50,000, annually (or the sum of all such
agreements during a 12-month period with an aggregate value
of cash payments, grants, or other consideration in excess
of $10,000, or with an aggregate amount of loan principal in
excess of $50,000); or
(ii) a group of substantively related contracts with an
aggregate value of cash payments, grants, or other
consideration in excess of $10,000, or with an aggregate
amount of loan principal in excess of $50,000, annually;
made pursuant to, or in connection with, the fulfillment of the
Community Reinvestment Act of 1977 [12 U.S.C. 2901 et seq.], at
least 1 party to which is an insured depository institution or
affiliate thereof, whether organized on a profit or not-for-
profit basis; and
(B) does not include--
(i) any individual mortgage loan;
(ii) any specific contract or commitment for a loan or
extension of credit to individuals, businesses, farms, or
other entities, if the funds are loaned at rates not
substantially below market rates and if the purpose of the
loan or extension of credit does not include any re-lending
of the borrowed funds to other parties; or
(iii) any agreement entered into by an insured
depository institution or affiliate with a nongovernmental
entity or person who has not commented on, testified about,
or discussed with the institution, or otherwise contacted
the institution, concerning the Community Reinvestment Act
of 1977 [12 U.S.C. 2901 et seq.].
(2) Fulfillment of CRA
For purposes of subparagraph (A), the term ``fulfillment'' means
a list of factors that the appropriate Federal banking agency
determines have a material impact on the agency's decision--
(A) to approve or disapprove an application for a deposit
facility (as defined in section 803 of the Community
Reinvestment Act of 1977 [12 U.S.C. 2902]); or
(B) to assign a rating to an insured depository institution
under section 807 of the Community Reinvestment Act of 1977 [12
U.S.C. 2906].
(f) Violations
(1) Violations by persons other than insured depository
institutions or their affiliates
(A) Material failure to comply
If the party to an agreement described in subsection (a) of
this section that is not an insured depository institution or
affiliate willfully fails to comply with this section in a
material way, as determined by the appropriate Federal banking
agency, the agreement shall be unenforceable after the offending
party has been given notice and a reasonable period of time to
perform or comply.
(B) Diversion of funds or resources
If funds or resources received under an agreement described
in subsection (a) of this section have been diverted contrary to
the purposes of the agreement for personal financial gain, the
appropriate Federal banking agency with supervisory
responsibility over the insured depository institution may
impose either or both of the following penalties:
(i) Disgorgement by the offending individual of funds
received under the agreement.
(ii) Prohibition of the offending individual from being
a party to any agreement described in subsection (a) of this
section for a period of not to exceed 10 years.
(2) Designation of successor nongovernmental party
If an agreement described in subsection (a) of this section is
found to be unenforceable under this subsection, the appropriate
Federal banking agency may assist the insured depository institution
in identifying a successor nongovernmental party to assume the
responsibilities of the agreement.
(3) Inadvertent or de minimis reporting errors
An error in a report filed under subsection (c) of this section
that is inadvertent or de minimis shall not subject the filing party
to any penalty.
(g) Rule of construction
No provision of this section shall be construed as authorizing any
appropriate Federal banking agency to enforce the provisions of any
agreement described in subsection (a) of this section.
(h) Regulations
(1) In general
Each appropriate Federal banking agency shall prescribe
regulations, in accordance with paragraph (4), requiring procedures
reasonably designed to ensure and monitor compliance with the
requirements of this section.
(2) Protection of parties
In carrying out paragraph (1), each appropriate Federal banking
agency shall--
(A) ensure that the regulations prescribed by the agency do
not impose an undue burden on the parties and that proprietary
and confidential information is protected; and
(B) establish procedures to allow any nongovernmental entity
or person who is a party to a large number of agreements
described in subsection (a) of this section to make a single or
consolidated filing of a report under subsection (c) of this
section to an insured depository institution or an appropriate
Federal banking agency.
(3) Parties not subject to reporting requirements
The Board of Governors of the Federal Reserve System may
prescribe regulations--
(A) to prevent evasions of subsection (e)(1)(B)(iii) of this
section; and
(B) to provide further exemptions under such subsection,
consistent with the purposes of this section.
(4) Coordination, consistency, and comparability
In carrying out paragraph (1), each appropriate Federal banking
agency shall consult and coordinate with the other such agencies for
the purposes of assuring, to the extent possible, that the
regulations prescribed by each such agency are consistent and
comparable with the regulations prescribed by the other such
agencies.
(Sept. 21, 1950, ch. 967, Sec. 2[48], as added Pub. L. 106-102, title
VII, Sec. 711, Nov. 12, 1999, 113 Stat. 1465.)
References in Text
The Community Reinvestment Act of 1977, referred to in subsecs. (a)
and (e)(1)(A), (B)(iii), is title VIII of Pub. L. 95-128, Oct. 12, 1977,
91 Stat. 1147, as amended, which is classified generally to chapter 30
(Sec. 2901 et seq.) of this title. For complete classification of this
Act to the Code, see Short Title note set out under section 2901 of this
title and Tables.
