12 U.S.C. § 1831g: Contracts between…

Summary

Banks that are insured by the federal government must not make written or verbal deals with people or companies to get goods or services if doing the deal would hurt the bank’s financial health or stability. Federal regulators must write rules and definitions to run this rule and stop people from getting around it. When regulators enforce the rule, they can make the bank record the transaction correctly in its books. People may not bring private lawsuits based on this rule. The Attorney General and the Comptroller General must study how often banks make deals where vendors buy stock or assets, invest capital, or place deposits, and whether those deals hurt competition. They must send a report of their findings to Congress by the end of the 1-year period that began on August 9, 1989.

Title 12, §1831g

Banks and Banking, Source: USLM XML via OLRC

(a)In general

An insured depository institution may not enter into a written or oral contract with any person to provide goods, products, or services to or for the benefit of such depository institution if the performance of such contract would adversely affect the safety or soundness of the institution.

(b)Rulemaking

The Corporation shall prescribe such regulations and issue such orders, including definitions consistent with this section, as may be necessary to administer and carry out the purposes of, and prevent evasions of, this section.

(c)Enforcement

Any action taken by any appropriate Federal banking agency under section 1818 of this title to enforce compliance on the part of any insured depository institution with the requirements of this section may include a requirement that such institution properly reflect the transaction on its books and records.

(d)No private right of action

This section may not be construed as creating any private right of action.

(e)Study

(1)In general

The Attorney General and the Comptroller General of the United States shall jointly conduct a study on the extent to which—

(A)insured depository institutions are entering into contracts with vendors under which the vendors agree to purchase stock or assets from insured depository institutions or to invest capital in or make deposits in such institutions; and

(B)if such practices occur, the extent to which such practices are having an anticompetitive effect and should be prohibited.

(2)Report to Congress

Before the end of the 1-year period beginning on August 9, 1989, the Attorney General and the Comptroller General shall submit a report to the Congress on the results of the study conducted pursuant to paragraph (1).

Editorial Notes

Amendments

1994—Subsec. (e)(1)(A). Pub. L. 103–325 substituted “the vendors” for “venders”.

§1831g Contracts Between Depository Institutions and Persons Providing Goods, Products, or Services

Summary

Title 12, §1831g

Notes & Related Subsidiaries

Editorial Notes

Amendments

Citations & Metadata