§ 1831p-1. Standards for safety and soundness
(a)
Operational and managerial standards
Each appropriate Federal banking agency shall, for all insured depository institutions, prescribe—
(1)
standards relating to—
(A)
internal controls, information systems, and internal audit systems, in accordance with section
1831m of this title;
(b)
Asset quality, earnings, and stock valuation standards
Each appropriate Federal banking agency shall prescribe standards, by regulation or guideline, for all insured depository institutions relating to asset quality, earnings, and stock valuation that the agency determines to be appropriate.
(c)
Compensation standards
Each appropriate Federal banking agency shall, for all insured depository institutions, prescribe—
(1)
standards prohibiting as an unsafe and unsound practice any employment contract, compensation or benefit agreement, fee arrangement, perquisite, stock option plan, postemployment benefit, or other compensatory arrangement that—
(2)
standards specifying when compensation, fees, or benefits referred to in paragraph (1) are excessive, which shall require the agency to determine whether the amounts are unreasonable or disproportionate to the services actually performed by the individual by considering—
(B)
the compensation history of the individual and other individuals with comparable expertise at the institution;
(D)
comparable compensation practices at comparable institutions, based upon such factors as asset size, geographic location, and the complexity of the loan portfolio or other assets;
(d)
Standards to be prescribed
(1)
In general
Standards under subsections (a), (b), and (c) of this section shall be prescribed by regulation or guideline. Such regulations or guidelines may not prescribe standards that set a specific level or range of compensation for directors, officers, or employees of insured depository institutions.
(2)
Applicability of other laws
Paragraph (1) shall not affect the authority of any appropriate Federal banking agency to restrict the level of compensation, including golden parachute payments (as defined in section
1828
(k)(4) of this title), paid to any director, officer, or employee of an insured depository institution under any other provision of law.
(3)
Senior executive officers at undercapitalized institutions
Paragraph (1) shall not affect the authority of any appropriate Federal banking agency to restrict compensation paid to any senior executive officer of an undercapitalized insured depository institution pursuant to section
1831o of this title.
(4)
Safety and soundness or enforcement actions
Paragraph (1) shall not be construed as affecting the authority of any appropriate Federal banking agency under any provision of this chapter other than this section, or under any other provision of law, to prescribe a specific level or range of compensation for any director, officer, or employee of an insured depository institution—
(B)
in connection with any action under section
1818 of this title or any order issued by the agency, any agreement between the agency and the institution, or any condition imposed by the agency in connection with the agency’s approval of an application or other request by the institution, which is enforceable under section
1818 of this title.
(e)
Failure to meet standards
(1)
Plan required
(A)
In general
If the appropriate Federal banking agency determines that an insured depository institution fails to meet any standard prescribed under subsection (a) or (b) of this section—
(B)
Contents of plan
Any plan required under subparagraph (A) shall specify the steps that the institution will take to correct the deficiency. If the institution is undercapitalized, the plan may be part of a capital restoration plan.
(C)
Deadlines for submission and review of plans
The appropriate Federal banking agency shall by regulation establish deadlines that—
(i)
provide institutions and companies with reasonable time to submit plans required under subparagraph (A), and generally require the institution to submit a plan not later than 30 days after the agency determines that the institution fails to meet any standard prescribed under subsection (a), (b), or (c) of this section; and
(2)
Order required if institution fails to submit or implement plan
If an insured depository institution fails to submit an acceptable plan within the time allowed under paragraph (1)(C), or fails in any material respect to implement a plan accepted by the appropriate Federal banking agency, the agency, by order—
(B)
may do 1 or more of the following until the deficiency has been corrected:
(i)
Prohibit the institution from permitting its average total assets during any calendar quarter to exceed its average total assets during the preceding calendar quarter, or restrict the rate at which the average total assets of the institution may increase from one calendar quarter to another.
(iv)
Require the institution to take any other action that the agency determines will better carry out the purpose of section
1831o of this title than any of the actions described in this subparagraph.
(3)
Restrictions mandatory for certain institutions
In complying with paragraph (2), the appropriate Federal banking agency shall take 1 or more of the actions described in clauses (i) through (iii) of paragraph (2)(B) if—
(A)
the agency determines that the insured depository institution fails to meet any standard prescribed under subsection (a)(1) or (b)(1) of this section;
(f)
Definitions
For purposes of this section, the terms “average” and “capital restoration plan” have the same meanings as in section
1831o of this title.
(g)
Other authority not affected
The authority granted by this section is in addition to any other authority of the Federal banking agencies.