12 USC 1831 - Depository institutions lacking Federal deposit insurance

View all text of Chapter 16 [§ 1811 - § 1835a]

§ 1831t. Depository institutions lacking Federal deposit insurance

(a) Annual independent audit of private deposit insurers

(1) Audit required

(2) Providing copies of audit report

(A) Private deposit insurerThe private deposit insurer shall provide a copy of the audit report—

(i) to each depository institution the deposits of which are insured by the private deposit insurer, not later than 14 days after the audit is completed;

(ii) to the appropriate supervisory agency of each State in which such an institution receives deposits, not later than 7 days after the audit is completed; and

(iii) in the case of depository institutions described in subsection (e)(2)(A) the deposits of which are insured by the private insurer which are members of a Federal home loan bank, to the Federal Housing Finance Agency, not later than 7 days after the audit is completed.

(B) Depository institution

(3) Enforcement by appropriate State supervisor

(b) Disclosure requiredAny depository institution lacking Federal deposit insurance shall, within the United States, do the following:

(1) Periodic statements; account records

(2) Advertising; premises

(A) In general

(B) ExceptionsThe following need not include a notice that the institution is not federally insured:

(i) Any sign, document, or other item that contains the name of the depository institution, its logo, or its contact information, but only if the sign, document, or item does not include any information about the institution’s products or services or information otherwise promoting the institution.

(ii) Small utilitarian items that do not mention deposit products or insurance if inclusion of the notice would be impractical.

(3) Acknowledgment of disclosure

(A) New depositors obtained other than through a conversion or mergerWith 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—

(i) the institution is not federally insured; and

(ii) if the institution fails, the Federal Government does not guarantee that the depositor will get back the depositor’s money.

(B) New depositors obtained through a conversion or mergerWith 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—

(i) the depositor has signed a written acknowledgement described in subparagraph (A); or

(ii) the institution makes an attempt, as described in subparagraph (D) and sent by mail no later than 45 days after the effective date of the conversion or merger, to obtain the acknowledgment.

(C) Current depositorsReceive any deposit after October 13, 2006, for the account of any depositor who was a depositor on that date only if—

(i) the depositor has signed a written acknowledgement described in subparagraph (A); or

(ii) the institution has complied with the provisions of subparagraph (E) which are applicable as of the date of the deposit.

(D) Alternative provision of notice to new depositors obtained through a conversion or merger

(i)2

2 So in original. No cl. (ii) has been enacted.

In generalTransmit to each depositor who has not signed a written acknowledgement described in subparagraph (A)—(I) a conspicuous card containing the information described in clauses (i) and (ii) of subparagraph (A), and a line for the signature of the depositor; and(II) accompanying materials requesting the depositor to sign the card, and return the signed card to the institution.

(E) Alternative provision of notice to current depositors

(i) In generalTransmit to each depositor who was a depositor before October 13, 2006, and has not signed a written acknowledgement described in subparagraph (A)—(I) a conspicuous card containing the information described in clauses (i) and (ii) of subparagraph (A), and a line for the signature of the depositor; and(II) accompanying materials requesting the depositor to sign the card, and return the signed card to the institution.

(ii) Manner and timing of notice(I) First notice(II) Second notice

(d) Exceptions for institutions not receiving retail deposits

(e) DefinitionsFor purposes of this section:

(1) Appropriate supervisor

(2) Depository institutionThe term “depository institution” includes—

(A) any entity described in section 461(b)(1)(A)(iv) of this title; and

(B) any entity that, as determined by the Bureau—

(i) is engaged in the business of receiving deposits; and

(ii) could reasonably be mistaken for a depository institution by the entity’s current or prospective customers.

(3) Lacking Federal deposit insuranceA depository institution lacks Federal deposit insurance if the institution is not either—

(A) an insured depository institution; or

(B) an insured credit union, as defined in section 101 of the Federal Credit Union Act [12 U.S.C. 1752].

(4) Private deposit insurer

(5) Bureau

(f) Enforcement

(1) Limited enforcement authority

(2) Broad State enforcement authority

(A) In general

(B) State powers

(Sept. 21, 1950, ch. 967, § 2[43], formerly § 2[40], as added Pub. L. 102–242, title I, § 151(a)(1), Dec. 19, 1991, 105 Stat. 2282; renumbered § 2[43], Pub. L. 102–550, title XVI § 1602(b), Oct. 28, 1992, 106 Stat. 4078; amended Pub. L. 103–325, title III, § 340(a), Sept. 23, 1994, 108 Stat. 2237; Pub. L. 109–173, § 2(c)(3), Feb. 15, 2006, 119 Stat. 3602; Pub. L. 109–351, title V, § 505, Oct. 13, 2006, 120 Stat. 1975; Pub. L. 111–203, title X, § 1090(2), July 21, 2010, 124 Stat. 2094; Pub. L. 114–94, div. G, title LXXXII, § 82001(b), Dec. 4, 2015, 129 Stat. 1796.)