§ 4614. Capital classifications

Footnotes

1. 1 See References in Text note below.

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1992

   Federal Housing Enterprises Financial Safety and Soundness Act of 1992

   Pub. L. 102–550 title XIII § 1364 · 106 Stat. 3672

   Enacted · 12 U.S.C. § 4614

   Pub. L. 102–550, title XIII, § 1364, Oct. 28, 1992, 106 Stat. 3976

   Source evidence

   Code source credit
   Pub. L. 102–550, title XIII, § 1364, Oct. 28, 1992, 106 Stat. 3976

   Enacted provision · exact public law section
   SEC. 1364. CAPITAL CLASSIFICATIONS. (a) In general.— For purposes of this subtitle, the Director shall classify the enterprises according to the following capital classifications: (1) Adequately capitalized.— An enterprise shall be classified as adequately capitalized if the enterprise— (A) maintains an amount of total capital that is equal to or exceeds the risk-based capital level established for the enterprise under section 1361; and (B) maintains an amount of core capital that is equal to or exceeds the minimum capital level established for the enterprise under section 1362. (2) Undercapitalized.— An enterprise shall be classified as undercapitalized if— (A) the enterprise— (i) does not maintain an amount of total capital that is equal to or exceeds the risk-based capital level established for the enterprise; and (ii) maintains an amount of core capital that is equal to or exceeds the minimum capital level established for the enterprise; or (B) the enterprise is otherwise classified as undercapitalized under subsection (b)(1) of this section. (3) Significantly undercapitalized.— An enterprise shall be classified as significantly undercapitalized if— (A) the enterprise— (i) does not maintain an amount of total capital that is equal to or exceeds the risk-based capital level established for the enterprise; (ii) does not maintain an amount of core capital that is equal to or exceeds the minimum capital level established for the enterprise; and (iii) maintains an amount of core capital that is equal to or exceeds the critical capital level established for the enterprise under section 1363; or (B) the enterprise is otherwise classified as significantly undercapitalized under subsection (b)(2) of this section or section 1365(b). (4) Critically undercapitalized.— An enterprise shall be classified as critically undercapitalized if— (A) the enterprise— (i) does not maintain an amount of total capital that is equal to or exceeds the risk-based capital level established for the enterprise; and (ii) does not maintain an amount of core capital that is equal to or exceeds the critical capital level for the enterprise; or (B) is otherwise classified as critically undercapitalized under subsection (b)(3) of this section or section 1366(b)(5). (b) Discretionary Classification.— If at any time the Director determines in writing that an enterprise is engaging in conduct not approved by the Director that could result in a rapid depletion of core capital or that the value of the property subject to mortgages held or securitized by the enterprise has decreased significantly, the Director may classify the enterprise— (1) as undercapitalized, if the enterprise is otherwise classified as adequately capitalized; (2) as significantly undercapitalized, if the enterprise is otherwise classified as undercapitalized; and (3) as critically undercapitalized, if the enterprise is other-wise classified as significantly undercapitalized. (c) Quarterly Determination.— The Director shall determine the capital classification of the enterprises for purposes of this subtitle on not lees than a quarterly basis (and as appropriate under subsection (b)). The first such determination shall be made during the 3-month period beginning on the appointment of the Director. (d) Implementation.— Notwithstanding any other provision of this section, during the period beginning on the date of the enactment of this Act and ending upon the effective date of section 1365 (as provided in section 1365(c)), an enterprise shall be classified as adequately capitalized if the enterprise maintains an amount of core capital that is equal to or exceeds the minimum capital level for the enterprise under section 1362.

2. 2008

   Federal Housing Finance Regulatory Reform Act of 2008

   Pub. L. 110–289 § 1142(a)(1) · 122 Stat. 2654

   Substituted · 12 U.S.C. § 4614(a)

   Pub. L. 110–289, § 1142(a)(1), substituted “Enterprises” for “In general” in heading

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 110–289, § 1142(a)(1), substituted “Enterprises” for “In general” in heading.

   Enacted provision · exact public law section
   (1) in the heading for subsection (a) by striking “In General” and inserting “Enterprises”;

3. 2008

   Federal Housing Finance Regulatory Reform Act of 2008

   Pub. L. 110–289 § 1142(a)(4) · 122 Stat. 2654

   1. Added · 12 U.S.C. § 4614(b)

      Pub. L. 110–289, § 1142(a)(4), added subsec. (b)

   2. Struck · 12 U.S.C. § 4614(b)

      Pub. L. 110–289, § 1142(a)(4), struck out former subsec. (b) which related to discretionary classification

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 110–289, § 1142(a)(4), added subsec. (b) and struck out former subsec. (b) which related to discretionary classification.

   Enacted provision · exact public law section
   (4) by striking subsection (b) and inserting the following: “(b) Federal Home Loan Banks.— “(1) Establishment and criteria.— For Regulations. purposes of this subtitle, the Director shall, by regulation— “(A) establish the capital classifications specified under paragraph (2) for the Federal Home Loan Banks; “(B) establish criteria for each such capital classification based on the amount and types of capital held by a bank and the risk-based, minimum, and critical capital levels for the banks and taking due consideration of the capital classifications established under subsection (a) for the enterprises, with such modifications as the Director determines to be appropriate to reflect the difference in operations between the banks and the enterprises; and “(C) shall classify the Federal Home Loan Banks according to such capital classifications. “(2) Classifications.— The capital classifications specified under this paragraph are— “(A) adequately capitalized; “(B) undercapitalized; “(C) significantly undercapitalized; and “(D) critically undercapitalized. “(c) Discretionary Classification.— “(1) Grounds for reclassification.— The Director may reclassify a regulated entity under paragraph (2) if— “(A) at any time, the Director determines in writing that the regulated entity is engaging in conduct that could result in a rapid depletion of core or total capital or the value of collateral pledged as security has decreased significantly or that the value of the property subject to mortgages held by the regulated entity (or securitized in the case of an enterprise) has decreased significantly; “(B) after notice and an opportunity for hearing, the Director determines that the regulated entity is in an unsafe or unsound condition; or “(C) pursuant to section 1371(b), the Director deems the regulated entity to be engaging in an unsafe or unsound practice. “(2) Reclassification.— In addition to any other action authorized under this title, including the reclassification of a regulated entity for any reason not specified in this subsection, if the Director takes any action described in paragraph (1), the Director may classify a regulated entity— “(A) as undercapitalized, if the regulated entity is otherwise classified as adequately capitalized; “(B) as significantly undercapitalized, if the regulated entity is otherwise classified as undercapitalized; and “(C) as critically undercapitalized, if the regulated entity is otherwise classified as significantly undercapitalized.” ; and

4. 2008

   Federal Housing Finance Regulatory Reform Act of 2008

   Pub. L. 110–289 § 1161(a)(3) · 122 Stat. 2654

   Struck · 12 U.S.C. § 4614(c)

   Pub. L. 110–289, § 1161(a)(3), which directed amendment of subsec. (c) by striking out the last sentence, was not executed as the probable intent of Congress. The amendment was probably intended to strike out the last sentence of former subsec. (c), now subsec. (d), as it existed prior to being struck out by Pub. L. 110–289, § 1142(a)(2)(C). See below

   Source evidence

   Code amendment note
   Subsec. (c). Pub. L. 110–289, § 1161(a)(3), which directed amendment of subsec. (c) by striking out the last sentence, was not executed as the probable intent of Congress. The amendment was probably intended to strike out the last sentence of former subsec. (c), now subsec. (d), as it existed prior to being struck out by Pub. L. 110–289, § 1142(a)(2)(C). See below.

   Enacted provision · exact public law section
   (3) in section 1364(c) (12 U.S.C. 4614(c)), by striking the last sentence;

5. 2008

   Federal Housing Finance Regulatory Reform Act of 2008

   Pub. L. 110–289 § 1142(a)(3) · 122 Stat. 2654

   1. Added · 12 U.S.C. § 4614(c)

      Pub. L. 110–289, § 1142(a)(3), (4), added subsec. (c)

   2. Redesignated · 12 U.S.C. § 4614(c)

      Pub. L. 110–289, § 1142(a)(3), (4), redesignated former subsec. (c) as (d)

   Target inherited from the preceding amendment note.

   Source evidence

   Code amendment note
   Pub. L. 110–289, § 1142(a)(3), (4), added subsec. (c) and redesignated former subsec. (c) as (d).

   Enacted provision · exact public law section
   (3) by redesignating subsections (c) (as so amended by paragraph (2) of this subsection) and (d) as subsections (d) and (f), respectively;

6. 2008

   Federal Housing Finance Regulatory Reform Act of 2008

   Pub. L. 110–289 § 1142(a)(2)(C) · 122 Stat. 2654

   Struck · 12 U.S.C. § 4614(c)

   Pub. L. 110–289, § 1142(a)(2)(C), struck out last sentence which read as follows: “The first such determination shall be made during the 3-month period beginning on the appointment of the Director.”

   Target inherited from the preceding amendment note.

   Source evidence

   Code amendment note
   Pub. L. 110–289, § 1142(a)(2)(C), struck out last sentence which read as follows: “The first such determination shall be made during the 3-month period beginning on the appointment of the Director.”

   Enacted provision · exact public law section
   (C) by striking the last sentence;

7. 2008

   Federal Housing Finance Regulatory Reform Act of 2008

   Pub. L. 110–289 § 1142(a)(2)(A) · 122 Stat. 2654

   1. Substituted · 12 U.S.C. § 4614(c)

      Pub. L. 110–289, § 1142(a)(2)(A), (B), substituted “regulated entities” for “enterprises”

   2. Substituted · 12 U.S.C. § 4614(c)

      Pub. L. 110–289, § 1142(a)(2)(A), (B), substituted “subsection (c)” for “subsection (b)”

   Target inherited from the preceding amendment note.

   Source evidence

   Code amendment note
   Pub. L. 110–289, § 1142(a)(2)(A), (B), substituted “regulated entities” for “enterprises” and “subsection (c)” for “subsection (b)”.

   Enacted provision · exact public law section
   (A) by striking “subsection (b)” and inserting “subsection (c)”;

8. 2008

   Federal Housing Finance Regulatory Reform Act of 2008

   Pub. L. 110–289 § 1142(a)(3) · 122 Stat. 2654

   Redesignated · 12 U.S.C. § 4614(d)

   Pub. L. 110–289, § 1142(a)(3), redesignated subsec. (c) as (d). Former subsec. (d) redesignated (f)

   Source evidence

   Code amendment note
   Subsec. (d). Pub. L. 110–289, § 1142(a)(3), redesignated subsec. (c) as (d). Former subsec. (d) redesignated (f).

   Enacted provision · exact public law section
   (3) by redesignating subsections (c) (as so amended by paragraph (2) of this subsection) and (d) as subsections (d) and (f), respectively;

9. 2008

   Federal Housing Finance Regulatory Reform Act of 2008

   Pub. L. 110–289 § 1142(a)(5) · 122 Stat. 2654

   Added · 12 U.S.C. § 4614(e)

   Pub. L. 110–289, § 1142(a)(5), added subsec. (e)

   Source evidence

   Code amendment note
   Subsec. (e). Pub. L. 110–289, § 1142(a)(5), added subsec. (e).

   Enacted provision · exact public law section
   (5) by inserting after subsection (d) (as so redesignated by paragraph (3) of this subsection), the following new subsection: “(e) Restriction on Capital Distributions.— “(1) In general.— A regulated entity shall make no capital distribution if, after making the distribution, the regulated entity would be undercapitalized. “(2) Exception.— Notwithstanding paragraph (1), the Director may permit a regulated entity, to the extent appropriate or applicable, to repurchase, redeem, retire, or otherwise acquire shares or ownership interests if the repurchase, redemption, retirement, or other acquisition— “(A) is made in connection with the issuance of additional shares or obligations of the regulated entity in at least an equivalent amount; and “(B) will reduce the financial obligations of the regulated entity or otherwise improve the financial condition of the entity.” .

10. 2008

    Federal Housing Finance Regulatory Reform Act of 2008

    Pub. L. 110–289 § 1142(a)(3) · 122 Stat. 2654

    Redesignated · 12 U.S.C. § 4614(f)

    Pub. L. 110–289, § 1142(a)(3), redesignated subsec. (d) as (f)

    Source evidence

    Code amendment note
    Subsec. (f). Pub. L. 110–289, § 1142(a)(3), redesignated subsec. (d) as (f).

    Enacted provision · exact public law section
    (3) by redesignating subsections (c) (as so amended by paragraph (2) of this subsection) and (d) as subsections (d) and (f), respectively;

13 of 13 references resolved to an enrolled provision