§1831b — Title 12 Banks and Banking | U.S. Code

Summary

Banks must not make a federally related mortgage loan to someone who is acting as an agent, trustee, nominee, or other fiduciary unless the bank always knows who actually gets the economic benefit of the loan. If the Corporation asks, the bank must tell the Corporation who that beneficiary is and explain the nature and amount of the loan, discount, or other extension of credit. Mutual savings and cooperative banks that are not insured depository institutions can be made to follow this rule under section 1818. For enforcement, those banks are treated like State nonmember insured banks and the Federal Deposit Insurance Corporation (FDIC) is the proper federal agency.

Title 12, §1831b

Banks and Banking — Source: USLM XML via OLRC

(a)No insured depository institution, insured branch of a foreign bank, or mutual savings or cooperative bank which is not an insured depository institution, shall make any federally related mortgage loan to any agent, trustee, nominee, or other person acting in a fiduciary capacity without the prior condition that the identity of the person receiving the beneficial interest of such loan shall at all times be revealed to the insured depository institution, insured branch, or bank. At the request of the Corporation, the insured depository institution, insured branch, or bank shall report to the Corporation on the identity of such person and the nature and amount of the loan, discount, or other extension of credit.

(b)In addition to other available remedies, this section may be enforced with respect to mutual savings and cooperative banks which are not insured depository institutions in accordance with section 1818 of this title, and for such purpose such mutual savings and cooperative banks shall be held and considered to be State nonmember insured banks and the appropriate Federal agency with respect to such mutual savings and cooperative banks shall be the Federal Deposit Insurance Corporation.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1994—Subsec. (a). Pub. L. 103–325 substituted “the insured depository institution, insured branch, or bank” for “the bank” in two places. 1989—Pub. L. 101–73 substituted references to insured depository institutions for references to insured banks wherever appearing in this section. 1978—Subsec. (a). Pub. L. 95–369 inserted “insured branch of a foreign bank” after “No insured bank”.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective 180 days after Dec. 22, 1974, see section 20 of Pub. L. 93–533, set out as a note under section 2601 of this title. Exemptions;

Regulations

Pub. L. 93–533, § 11(c), Dec. 22, 1974, 88 Stat. 1729, provided that: “The Federal Deposit Insurance Corporation or the Federal Home Loan Bank Board as appropriate may by regulation exempt classes or types of transactions from the provisions added by this section [enacting this section and section 1730f of this title] if the Corporation or the Board determines that the purposes of such provisions would not be advanced materially by their application to such transactions.”

§1831b Disclosures with respect to certain federally related mortgage loans