12 U.S.C. § 5327: Treatment of certain…

Summary

Companies that had $50,000,000,000 or more in total assets on January 1, 2010 and that got help under the Capital Purchase Program of TARP, and any successor to those companies, must be treated as nonbank financial companies if they stop being bank holding companies after January 1, 2010. That means the Board of Governors will supervise them the same way as if the Financial Stability Oversight Council had officially designated them. A company can ask the Council in writing for a hearing to challenge that treatment. The Council must set a time and place within 30 days for written submissions or, if the Council allows, oral testimony. A decision to grant an appeal needs at least two-thirds of the voting members, including the Chair. Within 60 days after a hearing the Council must report its proposed decision and reasons to the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services. The Council must give the company its final decision and reasons within 60 days after that report, unless either committee holds hearings within one year; then the 60 days run from the last such hearing. The Council must consider the statutory tests and the legal definition of a nonbank financial company, and if it denies the appeal it must review that decision at least once a year.

Title 12, §5327

Banks and Banking, Source: USLM XML via OLRC

(a)Applicability

This section shall apply to—

(1)any entity that—

(A)was a bank holding company having total consolidated assets equal to or greater than $50,000,000,000 as of January 1, 2010; and

(B)received financial assistance under or participated in the Capital Purchase Program established under the Troubled Asset Relief Program authorized by the Emergency Economic Stabilization Act of 2008 [12 U.S.C. 5201 et seq.]; and

(2)any successor entity (as defined by the Board of Governors, in consultation with the Council) to an entity described in paragraph (1).

(b)Treatment

If an entity described in subsection (a) ceases to be a bank holding company at any time after January 1, 2010, then such entity shall be treated as a nonbank financial company supervised by the Board of Governors, as if the Council had made a determination under section 5323 of this title with respect to that entity.

(c)Appeal

(1)Request for hearing

An entity may request, in writing, an opportunity for a written or oral hearing before the Council to appeal its treatment as a nonbank financial company supervised by the Board of Governors in accordance with this section. Upon receipt of the request, the Council shall fix a time (not later than 30 days after the date of receipt of the request) and place at which such entity may appear, personally or through counsel, to submit written materials (or, at the sole discretion of the Council, oral testimony and oral argument).

(2)Decision

(A)Proposed decision

A Council decision to grant an appeal under this subsection shall be made by a vote of not fewer than ⅔ of the voting members then serving, including an affirmative vote by the Chairperson. Not later than 60 days after the date of a hearing under paragraph (1), the Council shall submit a report to, and may testify before, the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the proposed decision of the Council regarding an appeal under paragraph (1), which report shall include a statement of the basis for the proposed decision of the Council.

(B)Notice of final decision

The Council shall notify the subject entity of the final decision of the Council regarding an appeal under paragraph (1), which notice shall contain a statement of the basis for the final decision of the Council, not later than 60 days after the later of— (i)

(ii)if, not later than 1 year after the date of submission of the report under subparagraph (A), the Committee on Banking, Housing, and Urban Affairs of the Senate or the Committee on Financial Services of the House of Representatives holds one or more hearings regarding such report, the date of the last such hearing.

(C)Considerations

In making a decision regarding an appeal under paragraph (1), the Council shall consider whether the company meets the standards under section 5323(a) or 5323(b) of this title, as applicable, and the definition of the term “nonbank financial company” under section 5311 of this title. The decision of the Council shall be final, subject to the review under paragraph (3).

(3)Review

If the Council denies an appeal under this subsection, the Council shall, not less frequently than annually, review and reevaluate the decision.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The Emergency Economic Stabilization Act of 2008, referred to in subsec. (a)(1)(B), is div. A of Pub. L. 110–343, Oct. 3, 2008, 122 Stat. 3765, which is classified principally to chapter 52 (§ 5201 et seq.) of this title. For complete classification of this Act to the Code, see

Short Title

note set out under section 5201 of this title and Tables.

§5327 Treatment of Certain Companies That Cease to Be Bank Holding Companies