§2279bb–4 Enforcement levels

Summary

The Director must place the Corporation into one of four enforcement levels based on how its capital compares to three thresholds: the risk-based capital level (capital tied to the bank’s risk), the minimum capital level (a lower required amount), and the critical capital level (the lowest threshold). Level I means the Corporation meets or beats both the risk-based and minimum levels. Level II means capital is below the risk-based level but still meets the minimum, or the Director has moved it down under the special rules. Level III means capital is below the minimum but at or above the critical level, or the Director has moved it down. Level IV means capital is below the critical level, or the Director has moved it down. If the Director writes that the Corporation is taking unapproved actions that could quickly drain core capital or that the value of mortgaged or guaranteed property has fallen a lot, the Director can step the Corporation down one level and must notify the Corporation and the Farm Credit Administration in writing. The Director must check and set the level at least every quarter, with the first check for the quarter ending March 31, 1992. If the Corporation is put in level II or III, the Director must tell Congress and the Corporation in writing, say it is subject to sections 2279bb–5 or 2279bb–6, and give the reasons.