615.5250—Disclosure requirements for borrower stock.
(a)
For sales of borrower stock, which for this subpart means equities purchased as a condition for obtaining a loan, an institution must provide a prospective borrower with the following documents prior to loan closing:
(2)
The institution's most recent quarterly report filed under part 620 of this chapter, if more recent than the annual report;
(4)
A written description of the terms and conditions under which the equity is issued. In addition to specific terms and conditions, the description must disclose:
(ii)
That the equity is retireable only at the discretion of the board of directors and only if minimum permanent capital standards established under subpart H of this part are met;
(iv)
Whether the institution knows of any reason the institution may not meet its permanent capital standard on the next earnings distribution date; and
(b)
Notwithstanding the provisions of paragraph (a) of this section, no materials previously provided to a purchaser (except the disclosures required by paragraph (a)(4) of this section) need be provided again unless the purchaser requests such materials.