§ 1831t. Depository institutions lacking Federal deposit insurance
(a)
Annual independent audit of private deposit insurers
(1)
Audit required
Any private deposit insurer shall obtain an annual audit from an independent auditor using generally accepted auditing standards. The audit shall include a determination of whether the private deposit insurer follows generally accepted accounting principles and has set aside sufficient reserves for losses.
(2)
Providing copies of audit report
(3)
Enforcement by appropriate State supervisor
Any appropriate State supervisor of a private deposit insurer, and any appropriate State supervisor of a depository institution which receives deposits that are insured by a private deposit insurer, may examine and enforce compliance with this subsection under the applicable regulatory authority of such supervisor.
(b)
Disclosure required
Any depository institution lacking Federal deposit insurance shall, within the United States, do the following:
(1)
Periodic statements; account records
Include conspicuously in all periodic statements of account, on each signature card, and on each passbook, certificate of deposit, or share certificate.[1] a notice that the institution is not federally insured, and that if the institution fails, the Federal Government does not guarantee that depositors will get back their money.
(2)
Advertising; premises
(A)
In general
Include clearly and conspicuously in all advertising, except as provided in subparagraph (B); and at each station or window where deposits are normally received, its principal place of business and all its branches where it accepts deposits or opens accounts (excluding automated teller machines or point of sale terminals), and on its main Internet page, a notice that the institution is not federally insured.
(B)
Exceptions
The following need not include a notice that the institution is not federally insured:
(3)
Acknowledgment of disclosure
(A)
New depositors obtained other than through a conversion or merger
With respect to any depositor who was not a depositor at the depository institution before October 13, 2006, and who is not a depositor as described in subparagraph (B), receive any deposit for the account of such depositor only if the depositor has signed a written acknowledgement that—
(B)
New depositors obtained through a conversion or merger
With respect to a depositor at a federally insured depository institution that converts to, or merges into, a depository institution lacking federal insurance after October 13, 2006, receive any deposit for the account of such depositor only if—
(C)
Current depositors
Receive any deposit after October 13, 2006, for the account of any depositor who was a depositor on that date only if—
(D)
Alternative provision of notice to new depositors obtained through a conversion or merger
(i)
[2] In general
Transmit to each depositor who has not signed a written acknowledgement described in subparagraph (A)—
(E)
Alternative provision of notice to current depositors
(i)
In general
Transmit to each depositor who was a depositor before October 13, 2006, and has not signed a written acknowledgement described in subparagraph (A)—
(ii)
Manner and timing of notice
(I)
First notice
Make the transmission described in clause (i) via mail not later than three months after October 13, 2006.
(II)
Second notice
Make a second transmission described in clause (i) via mail not less than 30 days and not more than three months after a transmission to the depositor in accordance with subclause (I), if the institution has not, by the date of such mailing, received from the depositor a card referred to in clause (i) which has been signed by the depositor.
(c)
Manner and content of disclosure
To ensure that current and prospective customers understand the risks involved in foregoing Federal deposit insurance, the Federal Trade Commission, by regulation or order, shall prescribe the manner and content of disclosure required under this section, which shall be presented in such format and in such type size and manner as to be simple and easy to understand.
(d)
Exceptions for institutions not receiving retail deposits
The Federal Trade Commission may, by regulation or order, make exceptions to subsection (b) of this section for any depository institution that, within the United States, does not receive initial deposits of less than an amount equal to the standard maximum deposit insurance amount from individuals who are citizens or residents of the United States, other than money received in connection with any draft or similar instrument issued to transmit money.
(e)
Definitions
For purposes of this section:
(1)
Appropriate supervisor
The “appropriate supervisor” of a depository institution means the agency primarily responsible for supervising the institution.
(f)
Enforcement
(2)
Broad State enforcement authority
(A)
In general
Subject to subparagraph (C), an appropriate State supervisor of a depository institution lacking Federal deposit insurance may examine and enforce compliance with the requirements of this section, and any regulation prescribed under this section.
(B)
State powers
For purposes of bringing any action to enforce compliance with this section, no provision of this section shall be construed as preventing an appropriate State supervisor of a depository institution lacking Federal deposit insurance from exercising any powers conferred on such official by the laws of such State.
(C)
Limitation on State action while Federal action pending
If the Federal Trade Commission has instituted an enforcement action for a violation of this section, no appropriate State supervisor may, during the pendency of such action, bring an action under this section against any defendant named in the complaint of the Commission for any violation of this section that is alleged in that complaint.
[1] So in original. The period probably should not appear.
[2] So in original. No cl. (ii) has been enacted.