12 U.S.C. § 5331: Mitigation of risks to…

Summary

The Board of Governors must act if it finds a bank holding company with $250,000,000,000 or more in consolidated assets, or a nonbank financial company it supervises, is a serious threat to U.S. financial stability and at least two‑thirds of the Council’s voting members agree. The Board can limit mergers or ties with other firms, bar or limit certain financial products, force the company to stop activities, set conditions on how activities are done, or, if needed, require sales or transfers of assets or off‑balance‑sheet items to unaffiliated parties. Before acting, the Board, after talking with the Council, must give the company written notice explaining the problem and the proposed step. The company has 30 days to ask for a written or oral hearing. If requested, the Board must set the hearing within 30 days. The Board must decide and tell the company the result (including the Council vote) within 60 days after the hearing or, if there is no hearing, within 60 days after the notice. The Board and Council must consider the factors listed in section 5323. The Board may make rules for how this applies to foreign firms, respecting national treatment and comparable home‑country standards.

Title 12, §5331

Banks and Banking, Source: USLM XML via OLRC

(a)Mitigatory actions

If the Board of Governors determines that a bank holding company with total consolidated assets of $250,000,000,000 or more, or a nonbank financial company supervised by the Board of Governors, poses a grave threat to the financial stability of the United States, the Board of Governors, upon an affirmative vote of not fewer than ⅔ of the voting members of the Council then serving, shall—

(1)limit the ability of the company to merge with, acquire, consolidate with, or otherwise become affiliated with another company;

(2)restrict the ability of the company to offer a financial product or products;

(3)require the company to terminate one or more activities;

(4)impose conditions on the manner in which the company conducts 1 or more activities; or

(5)if the Board of Governors determines that the actions described in paragraphs (1) through (4) are inadequate to mitigate a threat to the financial stability of the United States in its recommendation, require the company to sell or otherwise transfer assets or off-balance-sheet items to unaffiliated entities.

(b)Notice and hearing

(1)In general

The Board of Governors, in consultation with the Council, shall provide to a company described in subsection (a) written notice that such company is being considered for mitigatory action pursuant to this section, including an explanation of the basis for, and description of, the proposed mitigatory action.

(2)Hearing

Not later than 30 days after the date of receipt of notice under paragraph (1), the company may request, in writing, an opportunity for a written or oral hearing before the Board of Governors to contest the proposed mitigatory action. Upon receipt of a timely request, the Board of Governors shall fix a time (not later than 30 days after the date of receipt of the request) and place at which such company may appear, personally or through counsel, to submit written materials (or, at the discretion of the Board of Governors, in consultation with the Council, oral testimony and oral argument).

(3)Decision

Not later than 60 days after the date of a hearing under paragraph (2), or not later than 60 days after the provision of a notice under paragraph (1) if no hearing was held, the Board of Governors shall notify the company of the final decision of the Board of Governors, including the results of the vote of the Council, as described in subsection (a).

(c)Factors for consideration

The Board of Governors and the Council shall take into consideration the factors set forth in subsection (a) or (b) of section 5323 of this title, as applicable, in making any determination under subsection (a).

(d)Application to foreign financial companies

The Board of Governors may prescribe regulations regarding the application of this section to foreign nonbank financial companies supervised by the Board of Governors and foreign-based bank holding companies—

(1)giving due regard to the principle of national treatment and equality of competitive opportunity; and

(2)taking into account the extent to which the foreign nonbank financial company or foreign-based bank holding company is subject on a consolidated basis to home country standards that are comparable to those applied to financial companies in the United States.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2018—Subsec. (a). Pub. L. 115–174 substituted “$250,000,000,000” for “$50,000,000,000” in introductory provisions.

Statutory Notes and Related Subsidiaries

Effective Date

of 2018 AmendmentExcept as otherwise provided, amendment by Pub. L. 115–174 effective 18 months after May 24, 2018, see section 401(d) of Pub. L. 115–174, set out as a note under section 5365 of this title.

Construction

of 2018 AmendmentFor

Construction

of amendment by Pub. L. 115–174 as applied to certain foreign banking organizations, see section 401(g) of Pub. L. 115–174, set out as a note under section 5365 of this title.

§5331 Mitigation of Risks to Financial Stability

Summary

Title 12, §5331

Notes & Related Subsidiaries

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Construction

Construction

Citations & Metadata