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FEDERAL RESERVE BANK
OF M E W YORK
No.
November 10, 1987 J
[ Circular
1 0 2 0 2 "1
AMENDMENT TO REGULATION H
Comment Invited on Agricultural Loan Loss Amortization
To All State Member Banks in the Second
Federal Reserve District, and Others Concerned:
Following is the text of a statement issued by the Board of Governors of the Federal Reserve
System:
The Federal Reserve Board has announced approval o f a program allowing eligible State member
banks to amortize losses on agricultural loans over several years. The eligible State member banks in
clude banks with less than $100 million in assets, but with at least 25 percent of those assets in qualified
agricultural loans.
Although the program is effective beginning November 9, 1987, amortized loans w ill first appear
on Reports o f Condition as of December 31, 1987. Consequently, interested State member banks may
contact their Reserve Banks to determine whether they are eligible. Additionally, the Board is re
questing comment on the regulation. Comments should be received by the Board on this matter by D e
cember 3, 1987.
The program was created by Title V I I I o f the Competitive Equality Banking Act o f 1987. Similar
programs have been adopted by the Federal Deposit Insurance Corporation and the Office of the Comp
troller o f the Currency.
To reflect this action, the Board of Governors has amended its Regulation H, “Membership of
State Banking Institutions in the Federal Reserve System,” effective November 9, 1987, and has
invited public comment on the amendment. Comments should be submitted by December 3, 1987,
and may be sent to the Board, as indicated in the notice, or to our Compliance Examinations Depart
ment.
Enclosed — for depository institutions in this District and others who maintain sets of the
Board’s regulations — is the text of the amendment to Regulation H, which has been reprinted from
the Federal Register of November 3; copies will be furnished to others upon request directed to the
Circulars Division of this Bank (Tel. No. 212-720-5215 or 5216). Questions regarding Regulation H
may be directed to our Compliance Examinations Department (Tel. No. 212-720-8136).
E . G erald C orrigan ,
President.
Board of Governors of the Federal Reserve System
MEMBERSHIP OF STATE BANKING INSTITUTIONS IN THE FEDERAL RESERVE SYSTEM
3
A M E N D M E N T T O R E G U L A T IO N H
(effective N ovem ber 9, 1987)
FEDERAL RESERVE SYSTEM
12CFR Part 208
[Regulation H; Docket No. R-0615]
Agricultural Loan Loss Amortisation
ag en cy:
B o a rd of G o v e rn o rs of the
F e d e ra l R e s e rv e S y stem .
a c t io n :
F in al rule w ith re q u e st for
co m m e n ts. *
*
SUMMARY: T h is re g u latio n im p lem en ts
T itle VIII o f the C o m p etitiv e E q u ality
B an k in g A c t o f 1 9 8 7 ( " C E B A " ) w hich
p erm its s ta te m e m b e r ag ricu ltu ral b an k s
to a m o rtiz e lo s se s on q ualified
a g ricu ltu ra l lo a n s. T h e reg u latio n
d e scrib e s the p ro ce d u re s a n d s ta n d a rd s
a p p lica b le to s ta te m em b er b an k s
desirin g to a m o rtiz e lo s s e s u n d er that
sta tu te . It a lso d e s c rib e s the m a n n e r in
w h ich su ch a m o rtiz a tio n s a re to be
d on e. T itle VIII o f C E B A req u ires
re g u la tio n s im p lem entin g T itle VIII to be
issu ed n ot le ss th an 9 0 d a y s a fte r
e n a ctm e n t, th a t is, by N o v e m b e r 9 ,1 9 8 7 .
T h e re fo re , the B o a rd is publishing the
rule a s a final rule e ffe ctiv e N o v e m b e r 9,
1987, for the C all R e p o rt for D e ce m b e r
3 1 ,1 9 8 7 , b ut is allo w in g in te re ste d
p a rtie s to co m m e n t through D e ce m b e r 3,
1987. Should ch a n g e s be in d ica te d by
the co m m e n ts, the B o a rd w ill e n d e a v o r
to ad o p t them sh o rtly a fte r the clo se of
the co m m e n t p eriod but b efo re the Call
R ep o rt for D e ce m b e r 3 1 ,1 9 8 7 , is filed.
B an k s w ishing to a m o rtiz e lo s s e s m ay
file an a p p lica tio n a n y tim e a fte r
p u b lica tio n o f the rule.
B o ard of G o v ern o rs o f the F e d e ra l
R e se rv e S y stem , W ash in g to n , DC 20551,
or d eliv ered to R oom B -2 2 2 3 , 20th S treet
an d C o n stitu tio n A v en u e N W „
W ash in g to n , DC, b etw een 8:45 a.m . and
5:15 p.m. w e e k d a y s. C o m m en ts m ay be
in sp ected in R oom B -1 1 2 2 b e tw e e n 8:45
a.m . an d 5:15 p.m. w e e k d a y s.
FOR FURTHER INFORMATION CONTACT:
R hoger H. Pugh, M a n a g e r (202) 7 2 8 -5 8 8 3 ,
S tan ley B. R ediger, S en io r F in a n cia l
A n a ly st (202) 4 5 2 -2 6 2 9 , D ivision of
Banking S u p erv isio n and R egu lation
(202) 7 2 8 -5 8 8 3 ; H elen L ew is (202) 4 5 2 3490, E co n o m ist, F in a n cia l R ep o rts
S ectio n , D ivision of R e s e a rc h an d
S ta tis tics; o r John H a rry Jo rg en so n ,
S en io r A tto rn e y (202) 4 5 2 -3 7 7 8 , Legal
D ivision; B o a rd of C o v e rn o rs o f the
F e d e ra l R e se rv e S y stem , W ash in g to n ,
DC 20551. F o r the h earin g im p aired
O N L Y , T e le co m m u n ica tio n s D ev ice for
the D eaf, E a rn e stin e Hill or D o ro th ea
T h o m p so n , (202) 4 5 2 -3 5 4 4 .
OATES: T h e rule will be e ffectiv e
N o v e m b e r 9 ,1 9 8 7 , an d the first C all
R ep o rt a ffe cte d will be the C all R ep o rt
for D e ce m b e r 3 1 ,1 9 8 7 . C o m m en ts m ust
b e re c e iv e d on o r b e fo re D e ce m b e r 3,
1 987.
ad d resses:
A ll c o m m e n ts should re fe r
to D o ck et No. R--0615 an d should be
m ailed to W illia m W . W ile s, S e c r e ta ry .
SUPPLEMENTARY INFORMATION: Title VIII
o f the C o m p etitiv e E q u ality Banking A ct
of 1987 (“C E B A ") p erm its ag ricu ltu ral
b an k s to a m o rtize: (1) L o sse s on
qualified a g ricu ltu ral lo an s sh o w n on its
an n u al fin an cial sta te m e n t for an y y e a r
b e tw e e n D e ce m b e r 31, 1983 an d Jan u ary
1 .1 9 9 2 ; an d (2) lo s se s su ffered a s the
result of an a p p ra isa l o f o th er a s s e ts
(re la te d to a q ualified ag ricu ltu ral loan )
th at it o w n ed on Jan u ary 1 .1 9 8 3 . or
acq u ire s p rior to Jan u ary 1, 1992. T itle
VIII of C E B A also req u ires that the
fed eral b ank in g a g e n cie s issue
im p lem entin g reg u latio n s no la te r than
90 d a y s a fte r the e ffectiv e d ate o f the
A ct (th at is, no la te r than N o v em b er 9,
1987). T h is reg u latio n is in ten d ed to
co m p ly with this req u irem en t. T h e o th e r
fed eral b ank in g a g e n cie s (the O ffice of
the C o m p tro ller o f the C u rren cy and the
F e d e ra l D ep osit In su ran ce C o rp o ratio n
("F D IC ")) a re p roposin g su b stan tially
id en tical reg u latio n s co n tain in g only
te ch n ic a l v a ria tio n s n e c e s s a ry to
a c c o m m o d a te th eir o w n reg u lato ry an d
o rg a n iz a tio n a l sy ste m s. T h e s ta n d a rd s
to be ap plied a re u n ch an g ed .
S ta tu to ry R eq u irem en ts fo r L o an L o ss
A m o rtizatio n
T itle VIII o f C E B A in clu d es the
follow ing e lem en ts: (1) T o be eligible to
am o rtiz e lo s se s, a b an k m u st m ee t the
follow ing req u irem en ts;
(a) Its d e p o sits m u st be insu red by the
FD IC;
(b) It m u st be lo c a te d in an a re a the
e co n o m y o f w h ich is d ep en d en t upon
ag ricu ltu re;
(c) It m ust h a v e a s s e ts o f $ 1 0 0 million
o r less;
(d) It m u st h a v e 25 p er ce n t o r m o re of
its total lo a n s in “q ualified ag ricu ltu ra l
lo a n s ” (or, if su ch lo a n s a re less th an 25
p er cen t, it m ust be re c o m m e n d e d by its
fed eral or s ta te re g u la to r to the FD IC a s
eligible):
(e) It m u st be in n eed of ca p ita l
re s to ra tio n , an d it m u st h a v e a p lan to
re s to re c a p ita l no la te r th an the clo se of
the a m o rtiz a tio n p eriod ;
(f) T h e re m ust be no e v id e n c e that
fraud o r crim in al a b u se on the p a rt of
the b ank led to the ag ricu ltu ral loan
lo s se s: an d
(g) T o rem ain eligible, the b an k m ust
a g re e to m ain tain in its lo an portfolio a
p e rce n ta g e o f ag ricu ltu ral lo a n s no
lo w e r th an the p e rce n ta g e in its portfolio
on Ja n u a ry 1, 1986;
(h) T h e co n d itio n o f the b an k m u st not
d e te rio ra te to the p oint w h e re it is no
lo n g er v iab le an d fu n d am en tally sound.
(2)
A b an k th at is a c c e p te d a s eligible
m a y a m o rtize, o v e r a p erio d o f up to
se v e n y e a rs , an y lo ss on a q ualified
a g ricu ltu ral lo an th a t w ou ld o th e rw ise
be re fle cte d on the b a n k 's an n u al
fin an cial s ta te m e n ts fo r an y y e a r
b e tw e e n an d including 19 8 4 an d 1991.
A m o rtiz a tio n o v e r a m n o d o f up to
se v e n y e a rs is a lso p f itted fo r losses.
PRINTED IN NEW YORK, FROM FEDERAL REGISTER, VOL. 52, NO. 212, p. 42087
For this Regulation to be complete, retain:
1) Regulation H Pamphlet, amended effective April 28, 1982.
2) Amendments effective May 15, 1985 and January 27, 1987 ( included in slip
sheet dated February 1987).
3) Guidelines for Maintaining Compliance with the Bank Secrecy Act (available
on request).
4) This slip sheet.
[Enc. Cir. No. 10202]
on re a p p ra is a l o r sa le oi re a l or p erso n al
p ro p e rty th a t w a s a cq u ired in
c o n n e c tio n w ith a q ualified ag ricu ltu ral
lo a n a n d th at the b ank o w n ed on
Ja n u a ry 1 ,1 9 8 3 , o r su b seq u en tly
a cq u ire s p rio r to Ja n u a ry 1 ,1 9 9 2 .
(3)
A m o rtiz a tio n u n d er the p rog ram
w ill te rm in a te on D e ce m b e r 3 1 ,1 9 9 8 ,
w h en all lo a n s a c c e p te d for
a m o rtiz a tio n through the Ja n u a ry 1 ,1 9 9 2
clo sin g d a te e sta b lish e d by the s ta tu te
will be fully am o rtized .
D efinitions
T h e reg u latio n will ad o p t a defin ition
of ‘‘a g ricu ltu ra l b a n k ” w h ich is
e s se n tia lly the sa m e as the lan g u ag e of
■ Title VIII of C E B A . T h e d efin itio n will
be u sed to d eterm in e w h e th e r a b an k
m aking a g ricu ltu ra l lo a n s sho uld be
re g a rd e d as eligible to a m o rtize lo sse s
on th o se lo a n s. In clud ed in the defin ition
of an a g ricu ltu ra l b an k in T itle VIII of
C E B A is a b an k w h ich d o es not m eet the
a g ricu ltu ra l lo a n volum e te st (th at
a g ricu ltu ra l lo a n s m u st be 25 p er c e n t or
m o re o f to ta l lo a n s) but w h ich the
b a n k ’s fe d e ra l o r s ta te re g u la to r
re co m m e n d s to the FD IC for eligibility.
L o s se s to be d e fe rred m ay be in clu d ed
in d eterm in in g w h eth er a b an k m eets
the a g ricu ltu ra l lo an volum e test.
B e c a u s e of the re g u la tio n ’s flexib ility in
defining a g ricu ltu ral lo a n s (see
d iscu ssio n b e lo w ), it is a n ticip a te d th at
su ch re c o m m e n d a tio n s ra re ly will be
n ecessary.
T h e d efin ition of “q ualified
a g ricu ltu ra l lo a n " in c o rp o ra te s the
d efin itio n s of " lo a n s to fin a n ce
a g ricu ltu ra l p ro d u ctio n an d o th er lo an s
to fa rm e rs ” a n d “lo a n s s e c u re d by farm
la n d ” co n ta in e d in the S ch ed u le R C -C
of the F e d e ra l F in a n cia l In stitu tio n s
E x a m in a tio n C o u n cil’s co n so lid a te d
R e p o rts of C o n d ition an d In co m e (“ C all
R e p o rt” ). T h e C all R ep o rt d efin itio n s a re
v irtu a lly id e n tica l to th o se c o n ta in e d in
T itle VIII o f C E B A b ut a re m o re
co m p re h e n siv e an d p erm it the a g e n cie s
to u se the C all R e p o rts a s the
p re d o m in a n t m o nito rin g d e v ic e for the
a m o rtiz a tio n p ro g ram . A d d itio n ally , a s
su g g e ste d b y T itle VIII of C E B A , the
B o a rd h a s re ta in e d d iscre tio n to d eem
o th e r ty p e s o f lo a n s an d le a s e s to be
“q u a lifie d ” a n d to re co m m e n d them to
the FD IC a s eligible if the req u estin g
b an k d e m o n s tra te s th o se a s s e ts to be
su fficien tly re la te d to ag ricu ltu re.
W h ile T itle VIII o f C E B A u se s the
p h ra se “a r e a the e co n o m y of w h ich is
d e p e n d e n t on a g ricu ltu re ,” the a g e n c ie s
h a v e n o t a tte m p te d to d e sc rib e su ch an
a g ricu ltu ra l a re a b e c a u s e the n o rm al
m e a n s of id entifying su ch a r e a s —in co m e le v e ls, re v e n u e flow s, a c r e a g e in
p ro d u ctio n — a re a b n o rm a lly d e p re sse d
due to the cu rre n t s ta te o f the
ag ricu ltu ral e co n o m y . A d o p tin g a list of
a c c e p ta b le co u n tie s o r g eo g rap h ic
reg ion s m ight le a v e the e rro n e o u s
im p ressio n th at a b an k lo c a te d o u tsid e
such an a rb itra ry a r e a cou ld n o t qualify
ev en though it m ight o th e rw ise qualify
a s an "a g ric u ltu ra l b a n k .” E a c h
a p p lica tio n should in clu d e a d e scrip tio n
of the b a n k ’s lo c a tio n , d o m in an t lines of
c o m m e rc e in its s e rv ic e a re a , an d a n y
o th er in fo rm atio n the b an k b elie v e s will
sup port th e co n te n tio n th at it is lo c a te d
in an a g ricu ltu ral a re a .
L o ss A m o rtiz a tio n
T h e p u rp o se o f T itle VIII of C E B A is
b est a c co m p lis h e d b y perm ittin g eligible
b an k s to a m o rtiz e lo s s e s on qualifying
ag ricu ltu ral lo a n s an d o th e r re la te d
a s s e ts th a t th ey w ou ld o th e rw ise be
req u ired to c h a rg e off b y rep ortin g the
am o un t of su ch d eferred lo s s e s in n ew
item s in the a s s e t an d eq uity c a p ita l
s e ctio n s of th e b a la n c e s h e e t of th eir
C all R ep o rt. T h is a p p ro a c h w ill p ro v id e
for the d isclo su re o f the d eferred lo sse s,
will n ot d isto rt re p o rte d in co m e, an d
will fa c ilita te the m o nito rin g of the
b an k ’s co m p lia n ce w ith the lo ss d e ferral
p ro g ram through reg u lar, q u arterly C all
R ep o rts. M o re o v e r, the full u n am o rtized
b a la n c e o f the d e fe rre d lo s s e s w ill be
in clu d ed in p rim ary c a p ita l for all
fed eral re g u la to ry an d su p e rv iso ry
p u rp o se s by the th ree F e d e r a l b an k in g
a g e n cie s.
T h e p ro v isio n s on loss am o rtiz a tio n
and re a p p ra is a l a d d re ss tw o issu es: (1)
W h ich lo s s e s a re su b ject to
a m o rtiz a tio n , an d (2) h o w th ey m ay be
am o rtized . On the first issu e, the
reg u latio n re fle cts C o n g re ss’ c le a r in tent
th at lo s s e s resu ltin g from frau d or
crim in al a b u s e on the p art of the bank,
its o fficers, d ire c to rs , o r p rin cip al
sh a re h o ld e rs n ot be eligible for
a m o rtiz a tio n . A cco rd in g ly , w h ere a
b ank h as b een found eligible to
p a rticip a te in the lo ss am o rtiz a tio n
p rog ram , frau d u len t lo s s e s w ill n ot be
eligible for a m o rtiz a tio n . A d d itio n ally , it
should be n o te d th at T itle VIII o f C E B A
req u ires th ere be "n o e v id e n ce o f ’ fraud
or crim in al a b u se. A cco rd in g ly , u nd er
the reg u latio n , it is n ot n e c e s s a r y th at
su ch frau d o r crim in al ab u se be
co n clu siv e ly e sta b lish e d to d isq ualify a
lo a n or, a s d isc u s s e d b elo w , a b an k .
T o be eligib le for a m o rtiz a tio n u nd er
the reg u latio n , a lo ss on a q ualified
a g ricu ltu ral lo an m u st o th erw ise h av e
b een req u ired to be re fle cte d in the
b a n k ’s fin an cial sta te m e n ts for the y e a rs
198 4 through 1991. Sim ilarly , ch arg e-o ffs
th at resu lt from a re a p p ra is a l or sale of
re a l or p e rso n a l p ro p e rty m a y be
2
a m o rtiz e d if the p ro p erty is o w n e d by
the b an k on o r a fte r N o v e m b e r 9 ,1 9 8 7 ;
w a s a cq u ire d in co n n e c tio n w ith a
q ualified ag ricu ltu ral loan ; an d w a s
o w n ed on o r a fte r Ja n u a ry 1 ,1 9 8 3 , or
su b seq u en tly a cq u ired b efo re Ja n u a ry 1,
1992.
W ith re s p e c t to the s e co n d issu e, i.e.,
the m a n n e r of a m o rtiz a tio n , T itle VIII of
C E B A p ro v id es th a t the lo ss shall be
am o rtiz e d o v e r a p erio d n ot to e x c e e d
se v e n y e a r s a s p ro v id ed in re g u la tio n s
issu ed by the fe d e ra l b ank ing a g e n c ie s.
T h e reg u latio n p ro v id e s th at
a m o rtiz a tio n sh all o c c u r on a q u a rte rly
straig h t-lin e b a s is .
T h e reg u latio n p erm its q ualified
lo sse s to be a m o rtized o v e r a p eriod n ot
to e x c e e d se v e n y e a r s so a s to be fully
a m o rtiz e d by D e ce m b e r 3 1 ,1 9 9 8 . L o sse s
su sta in e d in y e a r s p rior to the e ffe ctiv e
d a te o f the reg u latio n w ou ld be tre a te d
a s if a m o rtized o v e r s e v e n y e a r s
beginning on the d a te of the lo ss. T h us, a
b ank co u ld tak e on ly the a m o rtiz a tio n s
w h ich rem ain for su ch a lo ss a fte r it
en te rs the p rog ram . F o r e x a m p le , if a
b an k b eg an to p a rtic ip a te in the p ro g ra m
in the la s t q u a rte r of 1987 an d h ad a loss
su stain ed in the fourth q u a rte r of 1985.
th at lo ss w ou ld be a m o rtized o v e r a
sev e n y e a r p eriod beginning in 1985.
T h erefo re, 5 /7 th s o f the 1985 lo ss w ou ld
rem ain to be a m o rtiz e d as of D e ce m b e r
31, 1987.
A cco u n tin g for A m o rtizatio n
T h e reg u latio n d ire c ts th at in
a cco u n tin g for lo ss a m o rtiz a tio n , a b ank
should re s ta te its ca p ita l an d o th e r
re le v a n t a c c o u n ts in a c c o r d a n c e w ith
the F FIE C in stru ctio n s for the
C o n so lid a te d R e p o rts o f C o n d ition an d
In co m e. T h o se in stru ctio n s w ill co n tin u e
to req u ire the rep o rtin g of a c tu a l lo a n
lo sse s an d re c o v e rie s through the
A llo w a n ce for L o an an d L e a s e L o s se s
but will then p erm it lo s s e s eligib le for
d e fe rra l to be re in s ta te d in n e w item s in
the a s s e t an d equity s e ctio n s of the
b a la n c e s h e e t on the R ep o rt of
C o n d ition . A d d itio n ally , the re g u la tio n
p ro v id es th at a n y resu ltin g in c r e a s e in
the c a p ita l a c c o u n t sh all be tre a te d e s
p rim ary c a p ita l fo r p u rp o ses of
d eterm in in g the b a n k ’s co m p lia n ce w ith
the v a rio u s fe d eral re g u la to ry
req u irem en ts, gu id elin es, and. s ta n d a rd s
affectin g or re la te d to c a p ita l.
Eligibility
U n d er the reg u latio n , a n y b an k
d esirin g to p a rticip a te in the p ro g ra m
w ill be req u ired to sub m it to th e
a p p ro p ria te fe d e ra l b ank ing a g e n c y a
p ro p o sa l estab lish in g b oth its elig ib ility
an d the eligibility of the losses, it
p ro p o se s to a m o rtiz e . I a o rd e r to be
eligible, the p rop osin g b an k m u st b e an
“a g ricu ltu ra l b a n k ” a s d efin ed in the
reg u latio n .
F u rth er, the p rop osin g b a n k ’s cu rren t
c a p ita l m u st be in n eed o f re s to ra tio n ,
but the b an k a lso m u st be an
e co n o m ic a lly v ia b le , fu n d am en tally
sou nd institu tion . T h erefo re, a b an k w ith
c a p ita l b e lo w le v e ls e s ta b lis h e d b y the
B o a rd 's R eg u latio n Y (12 C F R P a rt 225),
o r w h ich is s u b je ct to an e n fo rce m e n t
a c tio n re la te d to ca p ita l le v els c a n be
eligible. A c c e p ta n c e o f a b an k for Loss
a m o rtiz a tio n w ith a n a d e q u a te c a p ita l
p lan w ill n o rm a lly re lie v e the b a n k of
a n y in co n siste n t p ro v isio n s d ealin g w ith
c a p ita l in a n y e x ta n t B o a rd o rd er,
a g re e m e n t, or d ire ctiv e .
T h e le g is la tiv e h is to ry o f T itle V IE . o f
C E B A in d ic a te s th a t th e C o n g re s s
in te n d e d th a t o n ly b a n k s w ith c a p ita l in
n e e d o f r e s to r a tio n b e p e rm itte d to
a m o rtiz e Losses. B a n k s w h ic h h a v e
e x p e r ie n c e d c a p ita l d e c lin e s b u t w h ic h
r e ta in a n a c c e p t a b le a m o u n t o f c a p ita l
h a v e no n e e d to a m o r tiz e o r d e fe r th e ir
r e c o g n itio n o f lo s s e s . C o n g re s s c le a r ly
w a s a w a re o f th is f a c t in th a t it re q u ire d
a s a n e s s e n tia l c o n d itio n o f e lig ib ility
th e s u b m is s io n o f a p la n to re s to r e
c a p ita l to a le v e l a c c e p ta b le to the
b a n k in g a g e n cy .
In 'o rd e r to b e a p p ro v ed , th e c a p ita l
p la n m o s t be. b a s e d u p o n r e a l is t i c
p r o je c tio n s a s to e a rn in g s, a n d o th e r
m a te r ia l fa c to r s -w h ic h a c c u r a te ly r e fle c t
c o n d itio n s in th e b a n k ’s m a r k e t a r e a .
F u rth e r, it s h o u ld a d d r e s s d iv id e n d
le v e ls, c o m p e n s a tio n to d ir e c to rs ,
e x e c u tiv e o ffic e r s a n d in d iv id u a ls w h o
h a v e a co n tro llin g in te r e s t a n d th eir
r e la te d in te re s ts ; a n d p a y m e n ts fo r
s e r v ic e s or p ro d u cts fu rn ish e d b y
a ffilia te d c o m p a n ie s.
V iab ility is n o t d efin ed in the
re g u latio n . It is a ju d g m en t b a s e d on
m a n y v a ria b le s . O n e m e a s u re o f
v ia b ility w ou ld be w h e th e r a b a n k ’s
tra d itio n a l funding s o u rc e s an d d em an d
for lo a n s o f a c c e p ta b le q u ality w ithin its
m a rk e t a re a a re su fficie n t to p erm it the
b ank to e a rn a re a s o n a b le p rofit in a
n o rm a l e n v iro n m e n t w h ile ach ie v in g
an d m ain ta in in g a c a p ita l lev el th a t
e n a b le s the b an k to o p e ra te th rou gh ou t
the n o rm a l d o w n tu rn s in e co n o m ic
c y c le s w ith o u t suffering s e v e re fin an cial
p ro b lem s. U su ally , a b an k w ill be
c o n sid e re d v ia b le if it h a s a re a s o n a b le
p ro s p e ct of rem ain in g a going c o n ce rn
th rou gh ou t th e p ro g ram an d a t the end
o f the a m o rtiz a tio n p eriod .
C o n g re s s in te n d e d th a t o n ly b an k sw ith r e a s o n a b le p r o s p e c ts fo r s u rv iv a l
sh o u ld b e p e rm itte d to a m o r tiz e lo s s e s ;
th e le g is la tiv e h is to r y in d ic a te s th a t
T itle V III o f C E B A w a s in te n d e d to
p erm it “fu n d a m e n ta lly sou n d b an k s to'
w e a th e r this s to rm .” C ong. K ec. (D a ily
ed .) S 3 9 4 1 (M a rc h 2 6 ,1 9 8 7 ). T o p e rm it
n o n -v ia b le in stitu tio n s to. a m o rtiz e
lo s s e s w o u ld m e re ly in c r e a s e the lo ss
e x p o s u re of the FD IC w ith n o
co u n te rv a ilin g p u b lic b en efit.
T h e re g u latio n d o e s n o t p re s crib e a n y
a b so lu te lev el o f c a p ita l to b e a c h i e v e d
T h e B o a rd ’s c a p ita l a d e q u a c y g u id elin es
(re fe re n ce d a t 12 C F R 2 08.13 a s
A p p e n d ix A to the B o a rd ’s R eg u latio n Y ,
12 C FR P a rt 225; F ed . R e s. R eg. S erv .,
H 3 -1 5 0 6 ) alread y, e s ta b lis h m in im u m
ca p ita l s ta n d a rd s fo r w ell ru n b an k s' i®
s a tis f a c to r y fin a n cia l co n d itio n . E a c h
b a n k ’s in d iv id u al c irc u m s ta n c e s w ill be
e v a lu a te d during th e r e v ie w o f the
req u isite c a p ita l plan.. This, ap p ro ach :
p a ra lle ls the c u r r e n t p r a c t ic e u n d e r th e
B o a rd ’s ex istin g c a p ita l f o r b e a r a n c e
p ro g ram s.
A n a d d itio n a l crite rio n for eligibility
is th a t th ere be no e v id e n c e th a t fra u d os
crim in al a b u s e b y th e b an k o r its.
o fficers, d ire c to rs o r p rin cip al
sh a re h o ld e rs led t o sig n ifican t lo s s e s on
q ualified ag ricu ltu ral lo a n s; L iterally
re a d , T itle V III o f C E B A w o u ld s e e m to
d isq u alify a n y b an k in w h ich th e re w a s
e v id e n ce th at lo sses, re su lte d fro m frau d
o r crim in al a b u se n o m atter. ho.w s m a ll
in am o u n t the lo s s e s w e re . C e rta in ly ,
w h e re in sid er frau d r e s u lts in sig n ifican t
a g ricu ltu ral lo a n lo s s e s , thus h an k sh o u ld
be d isq ualified. C o n g ress, in tern ied Title.
VIII to; " p r o v id e a s s i s t a n c e fara g ricu ltu ral b an k s, w h o th rou gh no fau lt
of th eir ow n , a re b ein g sq u eezed by the
ongoing a g ricu ltu ra l c ris is * * * ” Id.
H o w e v e r, a r e a s o n a b le in te rp re ta tio n of
T itle VIII, a d o p te d in the reg u latio n ,
w ou ld d isq u alify on ly b an k s w h ere
sig n ifican t frau d lo s s e s o ccu rre d .
C o n d itio n s on A c c e p ta n c e
T h e reg u latio n sp ecifies th at a n y
a c c e p ta n c e o f a b a n k ’s p ro p o sal will be
su b je ct to c e rta in co n d itio n s. T h e se
co n d itio n s a re d esig n ed to en su re th at a
b an k co n tin u e s to m eet the eligibility
req u irem en ts an d is p ro p erly am o rtizin g
lo s s e s u n d er the p ro g ram . F irst, the b ank
will be req u ired to fully a d h e re to the
a p p ro v ed ca p ita l p lan or to o b tain the
p rio r a p p ro v a l o f a n y m o d ificatio n s to
the p lan. S e co n d , the b an k will be
req u ired to m a in ta in a cco u n tin g re c o rd s
a d e q u a te to d o cu m en t the am o u n t a n d
tim ing of d efe rra ls, re p a y m e n ts, an d
a m o rtiz a tio n s for e a c h loss, su b ject to
d e fe rra l u n d er the p ro g ram . T hird, the
b an k m u st re m a in a v iab le,
fu n d am en tally s o u n d in stitu tion . Fourth,
the b an k m u st ag re e to m ak e a
r e a s o n a b le effo rt, c o n sis te n t w ith safe
an d sou n d b an k in g p ra c tic e s , to
3
m ain tain in its p o rtfo lio a p e rc e n ta g e of
ag ricu ltu ra l lo a n s w h ich is n ot lo w e r
th an the p e rc e n ta g e of su ch lo a n s in its
lo a n p ortfolio on Ja n u a ry 1 ,1 9 8 6 . Fifth,
p a rticip a tin g b an k s will be req u ired to
p ro v id e the B o a rd o r the R e s e rv e Bank
in w h o se D istrict the b an k is lo ca te d ,
upon req u est, a n y in fo rm atio n n e c e s s a r y
to m o n ito r the b a n k ’s am o rtiz a tio n or its
c o m p lia n ce w ith co n d itio n s, or its
co n tin u ed eligibility u n d er the p rogram .
T h e failu re o f a b an k to co m p ly w ith an y
co n d itio n is grou n d s for re v o c a tio n of an
a c c e p ta n c e an d term in atio n o f eligibility
to p a rtic ip a te in the lo ss d eferra l
p ro g ram . F in ally , a v io latio n of a
co n d itio n m a y re su lt in an
a d m in istra tiv e a c tio n a g a in st the b an k
u n d er 12 U .S .C . 1 8 18(b ) b e c a u s e such
co n d itio n s a re im p o sed in c o n n e c tio n
w ith the gran tin g o f a req u est.
S u b r n s s io B o f P ro p o s a ls
F in a lly , th e re g u la tio n lists, the c o n te n t
o f p r o p o s a ls to b e s u b m itte d b y b a n k s
d e s irin g to p a r tic ip a te in lo s s
a m o r tiz a tio n . In a d d itio n to th e item s,
p re v io u s ly d is c u ss e d , th e p ro p o s a l s h a ll
in c lu d e a co p y o f a r e s o lu tio n b y the
b a n k ’s B o a r d o f D ire c to rs a u th o riz in g
s u b m is s io n o f t h e p ro p o s a l. T h is is to
e n s u r e th a t th e B o a r d o f D ire c to rs h a s
b e e n fu lly in fo rm ed . P ro p o s a ls m a y b e
su b m itte d , to- th e F e d e r a l R e s e r v e B a n k
fo r th e F e d e r a l’ R e se rv e . D is tric t in w h ich
th e b a n k is lo c a t e d o n o r afterN o v e m b e r 9, 1987.
N o tic e a n d P u b lic C o m m e n t
T h e B o a rd finds go od c a u s e for askin g
for p ub lic co m m e n t co n cu rre n tly w ith
the ad o p tio n of the rule, for not seeking
p ublic co m m e n t p rio r to the ad o p tio n of
the rule, an d for h avin g the rule effe ctiv e
less th an th irty d a y s a fte r p u b licatio n .
First, T itle VIII o f C E B A req u ires th at
reg u latio n s im p lem en tin g the T itle be
im p lem en ted no la te r th an 90 d a y s a fte r
the e ffe ctiv e d a te of th a t T itle (th a t is,
b y N o v e m b e r 9 ,1 9 8 7 ) . T h e re fo re , this
reg u latio n m u st be effe ctiv e on
N o v e m b e r 9 ,1 9 8 7 , w h ich is le ss th an
th irty d a y s o f the p u b licatio n d a te .
S e co n d , the C all R ep o rt for D e ce m b e r
3 1 ,1 9 8 7 , is the first acco u n tin g re p o rt
th at co u ld be a ffe cte d b y this reg u latio n ,
an d it w ill n ot be due until a fte r the
c lo s e of the co m m en t p eriod . T h us, a n y
eligib le b an k re ceiv in g a p p ro v a l to
a m o rtiz e lo a n s on the b a sis o f the
reg u latio n in its cu rre n t form will h a v e
am p le tim e p rio r to filing its C all R ep o rt
for D e ce m b e r 3 1 ,1 9 8 7 , to m ak e a n y
a d ju stm e n ts n e c e s s a r y b e c a u s e of
am e n d m e n ts to this rule resu ltin g from
a n y c o m m e n ts re c e iv e d . A cco rd in g ly ,
the B o a rd b e lie v e s th at n o tice an d
public p a rticip a tio n b e y o n d th at
p ro v id ed for is im p ra c tica b le ,
u n n e c e s s a ry a n d c o n tra ry to the public
in te re st.
PART 208—MEMBERSHIP OP STATE
BANKING INSTITUTIONS IN THE
FEDERAL RESERVE SYSTEM
In fo rm atio n C o lle ctio n
1. T h e au th o rity c ita tio n fo r 12 C F R
P a rt 208 is re v ise d to r e a d a s fo llo w s:
T h e in fo rm atio n to be in clu d ed in an
a p p lica tio n a n d all in fo rm atio n n eed s
u nd er the lo a n lo ss d e fe rra l p ro g ram a re
c o n ta in e d in a n e w in form ation
co lle ctio n , the “R e p o rt by B an ks
P rop osin g to A m o rtiz e L o s s e s on
Q u alified A g ricu ltu ra l L o a n s " (form FR
4020; O M B N o. 7 1 0 0 -0 2 2 6 ). This rep o rt
w a s a p p ro v e d b y the B o a rd under
d e le g a te d a u th o rity from the O ffice of
M a n a g e m e n t an d B u d g et ( “O M B ") a t the
sa m e tim e the B o a rd a p p ro v e d this final
rule. N o tice of the im p lem en tatio n of
this in fo rm atio n c o lle ctio n is p ro v id ed in
a s e p a r a te F e d e ra l R e g iste r n o tice
p ublished c o n te m p o ra n e o u s ly w ith this
final rule.
In a d d itio n to the in fo rm atio n req u ired
to e s ta b lis h eligibility u n d er the
p ro g ram , c e rta in con tin u in g in form ation
w ill be req u ired for m on ito rin g. F o r this
p u rp o se, the B o a rd a n d the o th er
a g e n c ie s in tend to rely m ain ly on the
R e p o rts of C o n d itio n an d In co m e (F F IE C
0 3 1 -0 3 4 ; O M B No. 7 1 0 0 -0 0 3 6 ). A
p ro p o sa l req u estin g a p p ro v a l to m ak e
the n e c e s s a r y ch a n g e s to th e se rep o rts
for the D e ce m b e r 3 1 ,1 9 8 7 , rep o rt d a te is
being su b m itted sh o rtly to O M B. A
s e p a r a te F e d e ra l R e g iste r n o tice
re g a rd in g th o se ch a n g e s w ill be
p ub lish ed a t the tim e the p ro p o sal is
su b m itte d to O M B.
R e g u la to ry F le x ib ility A c t A n a ly sis
P u rsu an t to se ctio n 6 05(b ) o f the
R eg u lato ry F le x ib ility A c t (Pub. L. 9 6 354, 5 U .S .C . 601 et seq.}, the B o ard
ce rtifie s th a t the a m e n d m en ts w ill not
h av e a sign ifican t e c o n o m ic im p act on a
su b sta n tia l n u m b er o f sm all en tities. T he
a m e n d m e n ts w ou ld n o t h a v e a n y effect
on m an y d e p o sito ry in stitu tio n s, and
a n y a d v e rs e im p a ct on sm all
d e p o sito rie s a ffe cte d (w h ich on ly o c c u rs
if an in stitu tion c h o o s e s to tak e
a d v a n ta g e of this reg u latio n ) w ould
likely be o u tw eig h ed b y the b en efits
b e sto w e d b y the reg u latio n on th ese
sm all d e p o sito ry in stitu tio n s.
L ist o f S u b je cts in 12 C F R P a rt 208
B a n k s , B a n k in g , S t a t e m e m b e r b a n k s ,
A p p lic a tio n s, R e c o rd k e e p in g , F lo o d
in s u ra n c e , C a p ita l.
P u rsu a n t to the B o a rd ’s a u th o rity
u n d er T itle V III of the C o m p etitiv e
E q u a lity B an k in g A c t o f 19 8 7 (Pub. L.
No. 1 0 0 -8 6 ), an d s e ctio n 9 o f the F e d e ra l
R e se rv e A ct, 12 U .S .C . 321 et seq., the
B o a rd is a m en d in g 12 C F R P a rt 208 as
fo llow s:
Authority: Sections 9,11, and 21 of the
Federal Reserve Act (12 U.S.C. 321-338, 248,
and 486); sections 4 and 13(j) of the Federal
Deposit Insurance Act (12 U.S.C. 1814 and
1823(j)); and sections 907 and 908 of the
International Lending Supervision Act of 1983
(12 U.S.C. 3906 and 3907).
2. A n e w § 2 0 8 .1 5 is a d d e d a s fo llo w s:
§ 20®. 15 Agricultural loan lo ss
am ortization.
(a ) Definitions. F o r p u rp o ses o f this
se ctio n :
(1) “A g ricu ltu ral B a n k " m e a n s a b an k :
(1) T h e d e p o sits o f w h ich a re in su red
b y the F e d e r a l D ep o sit In su ra n ce
C o rp o ra tio n :
(ii) W h ich is lo c a te d in an a r e a o f the
co u n try the e c o n o m y of w h ich is
d e p e n d e n t on agricu ltu re:
(iii) W h ich h a s to ta l a s s e ts of
$ 1 0 0 ,0 0 0 ,0 0 0 o r le ss a s of the m o st r e c e n t
R ep o rt o f C o n d ition ; an d
(iv) W h ich h a s:
(A ) A t le a s t 25 p e rc e n t of its to tal
lo a n s in q ualified ag ricu ltu ral lo a n s: or
(B) L e ss th an 25 p e rc e n t of its to tal
lo an s in q ualified ag ricu ltu ral lo a n s, b ut
w h ich b an k the B o a rd or the R e s e rv e
B an k in w h o se D istrict the b an k is
lo c a te d or its p rim ary s ta te re g u la to r h a s
re co m m e n d e d to the F e d e ra l D ep o sit
In su ran ce C o rp o ra tio n for eligibility
u n d er this p art.
(2) “Q u alified A g ricu ltu ral L o a n "
m ean s:
(i) L o an s qualifying a s “lo an s to
fin an ce ag ricu ltu ral p ro d u ctio n an d
o th er lo a n s to fa r m e rs " o r a s “lo an s
s e cu re d by farm la n d " for p u rp o ses of
S ch ed u le R C -C of the F F IE C
C o n so lid a te d R ep o rt of C o n d ition ;
(ii) O th er lo a n s or le a s e s th at a b ank
p ro v es to be su fficien tly re la te d to
ag ricu ltu re for c la ss ific a tio n a s an
a g ricu ltu ral lo an b y the B o a rd or the
R e s e rv e B an k in w h o se D istrict the b ank
is lo c a te d ; an d
(iii) the rem ain in g unpaid b a la n c e of
a n y lo an s, a s d e sc rib e d in p a ra g ra p h
(a)(2 )(i) a n d (ii) of this se ctio n , th at h a v e
b een c h a rg e d off sin ce Ja n u a ry 1 ,1 9 8 4 ,
an d th at qualify for d e ferral u n d er this
reg u latio n .
(3) "A c c e p tin g O fficia l" m ean s:
(i) T h e R e s e rv e B an k in w h o se D istrict
the b an k is lo c a te d ; or
(ii) T h e D ire cto r of the D ivision of
B anking S u p erv isio n an d R eg u latio n in
c a s e s in w h ich the R e s e rv e B an k ca n n o t
d eterm in e th at the b an k q ualifies u nd er
the reg u latio n .
(b) Loss amortization and reappraisal.
4
(1) P ro v id ed th at th ere is no e v id e n ce
th at the lo ss re su lte d from fraud or
crim in al a b u se on the p a rt of the bank,
its o fficers, d ire c to rs , or p rin cip al
s h a re h o ld e rs, a b an k th at h as b een
a c c e p te d u n d er this s e ctio n m ay , in the
m a n n e r d e sc rib e d b elo w , am o rtiz e in its
R e p o rts o f C o n d itio n an d In com e:
(1) A n y lo ss on a n y qualified
a g ricu ltu ra l lo a n th at the b ank re fle cte d
in its an n u al fin an cial sta te m e n ts for
a n y y e a r b e tw e e n an d including 1984
■ and 1991; an d
(ii) A n y lo ss re fle cte d in its fin an cial
sta te m e n ts resu ltin g from a re a p p ra is a l
or s a le o f cu rren tly o w n ed p ro p erty , re a l
o r p e rso n a l, th at it acq u ire d in
c o n n e c tio n w ith a q ualified ag ricu ltu ra l
lo an an d th at it o w n ed on Ja n u a ry 1,
1983, a n d a n y such ad d itio n al p ro p e rty
th at it a cq u ire s on or b efo re D e ce m b e r
3 1 ,1 9 9 1 .
(2) A m o rtiz a tio n u n d er this se ctio n
shall be co m p u ted o v e r a p eriod n ot to
e x c e e d se v e n y e a r s on a q u arterly
straig h t-lin e b a sis co m m en cin g in the
first q u a rte r a fte r the loan w a s or is
c h a rg e d off so a s to be fully am o rtized
n ot la te r th an D e ce m b e r 3 1 ,1 9 9 8 .
(c) Accounting for amortization. A ny
b an k w h ich is p erm itted to a m o rtiz e
lo s s e s in a c c o r d a n c e w ith p a ra g ra p h (b),
o f this se ctio n , m a y r e s ta te its c a p ita l
an d o th e r re le v a n t a c c o u n ts an d a c co u n t
for future a u th o rized d e fe rra ls an d
a m o rtiz a tio n s in a c c o r d a n c e w ith the
in stru ctio n s to the F F IE C C o n so lid a te d
R e p o rts of C o n d itio n an d In co m e. A ny
resu ltin g in c r e a s e in the c a p ita l a c co u n t
shall be in clu d ed in p rim ary ca p ita l a s
p er s e ctio n 2G8.13 of this P art.
(d) Eligibility. A p ro p o sa l su b m itted
in a c c o r d w ith p ara g ra p h (f) sh all be
a c c e p te d , su b ject to the co n d itio n s
d e scrib e d in p a ra g ra p h (e), if the
A cce p tin g O fficial finds:
(1) T he p roposin g b ank is an
a g ricu ltu ral b ank;
(2) T he p rop osin g b a n k 's cu rren t
ca p ita l is in n eed of re s to ra tio n , but the
b ank rem ain s an e co n o m ic a lly v iab le,
fu n d am en tally sou nd institu tion;
(3) T h e re is no e v id e n c e th at fraud or
crim in al a b u se by the b an k o r its.
o fficers, d ire cto rs or p rin cip al
sh a re h o ld e rs led to sig n ifican t lo s se s on
q ualified ag ricu ltu ral lo an s an d re lated
a s s e ts : an d
(4) T h e p ro p o sin g b an k h as su bm itted
a ca p ita l plan ap p ro v ed by the
A ccep tin g O fficial th at will re s to re its
ca p ita l to an a c c e p ta b le level.
(e) Conditions on acceptance. All
a c c e p ta n c e s of p ro p o sa ls shall be
su b ject to the follow in g co n d itio n s:
(1) T h e b an k sh all fully a d h ere to the
a p p ro v e d ca p ita l plan an d sh all obtain
the p rior ap p ro v a l o f the A cce p tin g
O fficial for an y m o d ificatio n s to the
plan;
(2) W ith r e s p e c t to e a ch a s s e t su b ject
to lo ss d e fe rra l under th e p rog ram , the
b ank sh a ll m a in ta in a cco u n tin g re co rd s
a d e q u a te to d o cu m e n t the am o u n t an d
tim ing of the d e fe rra ls, rep ay m en ts, and
a m o rtiz a tio n s;
(3) T h e fin an cial co n d itio n of the b ank
shall n ot d e te rio ra te to the p oin t w h ere
it is no lon ger a v aib le, fu n d am en tally
sound institution;
(4) T he b ank a g rees, to m ak e a
re a s o n a b le effort, c o n sis te n t w ith s a fe
an d sou n d b a n k in g ;p ra ctice s, to
m ain tain in its lo a n p ortfolio a
p e rce n ta g e o i a g ricu ltu ral lo a n s n ot
lo w er th a n the p e rce n ta g e o f s u ch lo an s
in its loan portfolio, o n Ja n u a ry 1 ,1 9 8 6 ;
and
(5) T he b a n k sh a ll a g re e to p rov id e the
A cc e p tin g O fficial, upon req u est, with'
such in fo rm atio n a s the A ccep tin g ,
O fficial d e e m s n e c e s s a r y to m o n ito r the
bank's, a m o rtiz a tio n , its co m p lia n ce w ith
co n d itio n s, a n d its. co n tin u ed eligibility.
(f)
Submission of proposals. (1) A
bank w ishing, to a m o rtiz e lo sse s o n
qualified a g ricu ltu ra l Loans, or o th er
re la te d a s s e ts sh all sub m it a p ro p o sa l to.
the a p p ro p ria te A cc e p tin g O fficial,
(2) T he p ro p o sa l sh all co n ta in the
follow ing in form ation ;
(;j N am e a n d a d d re ss of the b ank ;
fiij In fo rm atio n estab lish in g th at the
b ank is lo c a te d in an a r e a the e co n o m y
o f w h ich is d e p e n d e n t o n ag ricu ltu re; the
in form ation cou ld co n sist of a
d e scrip tio n a£ the h a n k ’s lo catio n ,
d om in an t lines of co m m e rce in its
se rv ice a re a , and a n y o th er in form ation
the bank b e lie v e s w ill su p p o rt theco n ten tio n t h a t it is lo c a ted in s u c h a n
a re a :
(ill) A co p y of the b a n k 's m ost re c e n t
R ep o rt of C o nd ition an d In com e;
(iv) If the R e p o rt o f C o nd ition am f
In com e fails to sh o w th at a t le a s t 25
p ercen t of the b a n k ’s to ta lT o a n s a re
qualified ag ricu ltu ral lo an s, the b asis
upon w h ich the b an k b e liev es th at it
should be d e c la r e d eligible to am o rtize
lo sses;
(v) A ca p ita l p lan d em on stratin g : th at
the bank w ill a c h ie v e an. a c c e p ta b le
cap ita l level n o t la te r th an the end of the
b an k 's a m o rtiz a tio n p eriod . T h e plan
should p rov id e for a re a lis tic
im p ro v em en t in the b a n k 's ca p ita l, o v e r
the co u rse of the a m o rtiz a tio n period,
from earn in g s reten tio n , c a p ita l1
in jectio n s, o r o th e r s o u rce s; a n d in clude
sp ecific in fo rm a tio n reg ard in g -d iv id en d
levels, c o m p e n sa tio n to. d ire cto rs,
e x e c u tiv e officers an d in divid u als w ho
h av e a co n tro llin g in te re s t a n d in turn to.
their re la te d in te re sts, and. p a y m e n ts for
s e rv ic e s or p ro d u cts furn ished by
affiliated co m p a n ie s,
(vi) A list of the lo a n s an d re a p p ra ise d
p ro p erty upon w h ich the b an k p ro p o ses
to d efer lo ss in cluding fo r e a c h suchloan o r p rop erty ,, the follo wing,
in form ation :
(A) T h e n a m e of the b o rro w er, th e
5
a m o u n t of the lo an th a t resu lted in the
loss, a n d the am o u n t of th e lo s s ;
(B.) T h e -d a te -o n w h ich the lo ss w a s
d e cla re d ;
(C)
T h e b a sis upon- w h ich the loss
re s u lte d 'fro m a q ualified a g ricu ltu ra l
loan ;
(vii) A c e rtific a tio n b y the b a n k ’s ch ie f
e x e c u tiv e o ffice r th a t th ere is no
evidence- that* the losses- re s u lte d from
fraud or crim in a l a b u s e by th e bank,, its
o fficers, d ire cto rs, or principal,
sh a re h o ld e rs;
(viii) A co p y of a resolu tion , by the
b an k 's B o ard o f D irecto rs-au th o rizin g
su b m issio n of the p ro p o sal; a n d
(ix) S u ch o th er inform ation; as. the
A c c e p tin g O fficial m a y req u ire.
(g)
Revocation of eligibility. T h e
failu re to-com p ly with, an y co n d itio n na
an a c c e p t a n c e or with-, th e ca p ita l
re s to ra tio n p lan is g ro a n da for
re v o c a tio n of a c c e p ta n c e for loss
a m o rtiz a tio n a n d for a n ad m in istrativ e ;
a c tio n a g a in s t the bank, u nd er 1 2 U IS.C.
1818(b ). A d d itio n ally , a c ce p ta n c e - of a
bank, for lo ss a m o rtiz a tio n w ill n o t
fo re c lo s e a n y a d m in is tra tiv e actiona g a in st the- b an k th at the B o a rd m a y
d eem ap p rop riate,.
By order oi the Board of Governors of the
Federal Reserve System, October 28,1987.
William W„ Wiles,,
Secretary o f the Board:
[FR Doc. 87-25359-Filed 11-2-37; 8:45
BULLING CODE 6210-0 t-M
am|
@FedFRASER