(1) A bank shall not in any manner extend credit, lease or sell property of any kind, or furnish any service, or fix or vary the consideration for any of the foregoing, on the condition or requirement—
(A) that the customer shall obtain some additional credit, property, or service from such bank other than a loan, discount, deposit, or trust service;
(B) that the customer shall obtain some additional credit, property, or service from a bank holding company of such bank, or from any other subsidiary of such bank holding company;
(C) that the customer provide some additional credit, property, or service to such bank, other than those related to and usually provided in connection with a loan, discount, deposit, or trust service;
(D) that the customer provide some additional credit, property, or service to a bank holding company of such bank, or to any other subsidiary of such bank holding company; or
(E) that the customer shall not obtain some other credit, property, or service from a competitor of such bank, a bank holding company of such bank, or any subsidiary of such bank holding company, other than a condition or requirement that such bank shall reasonably impose in a credit transaction to assure the soundness of the credit.
The Board may issue such regulations as are necessary to carry out this section, and, in consultation with the Comptroller of the Currency and the Federal Deposit Insurance Company, may by regulation or order permit such exceptions to the foregoing prohibition and the prohibitions of section 1843(f)(9) and 1843(h)(2) of this title as it considers will not be contrary to the purposes of this chapter.
(2)(A) No bank which maintains a correspondent account in the name of another bank shall make an extension of credit to an executive officer or director of, or to any person who directly or indirectly or acting through or in concert with one or more persons owns, controls, or has the power to vote more than 10 per centum of any class of voting securities of, such other bank or to any related interest of such person unless such extension of credit is made on substantially the same terms, including interest rates and collateral as those prevailing at the time for comparable transactions with other persons and does not involve more than the normal risk of repayment or present other unfavorable features.
(B) No bank shall open a correspondent account at another bank while such bank has outstanding an extension of credit to an executive officer or director of, or other person who directly or indirectly or acting through or in concert with one or more persons owns, controls, or has the power to vote more than 10 per centum of any class of voting securities of, the bank desiring to open the account or to any related interest of such person, unless such extension of credit was made on substantially the same terms, including interest rates and collateral as those prevailing at the time for comparable transactions with other persons and does not involve more than the normal risk of repayment or present other unfavorable features.
(C) No bank which maintains a correspondent account at another bank shall make an extension of credit to an executive officer or director of, or to any person who directly or indirectly acting through or in concert with one or more persons owns, controls, or has the power to vote more than 10 per centum of any class of voting securities of, such other bank or to any related interest of such person, unless such extension of credit is made on substantially the same terms, including interest rates and collateral as those prevailing at the time for comparable transactions with other persons and does not involve more than the normal risk of repayment or present other unfavorable features.
(D) No bank which has outstanding an extension of credit to an executive officer or director of, or to any person who directly or indirectly or acting through or in concert with one or more persons owns, controls, or has the power to vote more than 10 per centum of any class of voting securities of, another bank or to any related interest of such person shall open a correspondent account at such other bank, unless such extension of credit was made on substantially the same terms, including interest rates and collateral as those prevailing at the time for comparable transactions with other persons and does not involve more than the normal risk of repayment or present other unfavorable features.
(E) For purposes of this paragraph, the term "extension of credit" shall have the meaning prescribed by the Board pursuant to section 375b of this title, and the term "executive officer" shall have the same meaning given it under section 375a of this title.
(F)
(i)
(ii)
(I)(aa) commits any violation described in clause (i);
(bb) recklessly engages in an unsafe or unsound practice in conducting the affairs of such bank; or
(cc) breaches any fiduciary duty;
(II) which violation, practice, or breach—
(aa) is part of a pattern of misconduct;
(bb) causes or is likely to cause more than a minimal loss to such bank; or
(cc) results in pecuniary gain or other benefit to such party,
shall forfeit and pay a civil penalty of not more than $25,000 for each day during which such violation, practice, or breach continues.
(iii)
(I) knowingly—
(aa) commits any violation described in clause (i);
(bb) engages in any unsafe or unsound practice in conducting the affairs of such bank; or
(cc) breaches any fiduciary duty; and
(II) knowingly or recklessly causes a substantial loss to such bank or a substantial pecuniary gain or other benefit to such party by reason of such violation, practice, or breach,
shall forfeit and pay a civil penalty in an amount not to exceed the applicable maximum amount determined under clause (iv) for each day during which such violation, practice, or breach continues.
(iv)
(I) in the case of any person other than a bank, an amount to not exceed $1,000,000; and
(II) in the case of a bank, an amount not to exceed the lesser of—
(aa) $1,000,000; or
(bb) 1 percent of the total assets of such bank.
(v)
(I) in the case of a national bank, by the Comptroller of the Currency;
(II) in the case of a State member bank, by the Board; and
(III) in the case of an insured nonmember State bank, by the Federal Deposit Insurance Corporation,
in the manner provided in subparagraphs (E), (F), (G), and (I) of section 1818(i)(2) of this title for penalties imposed (under such section) and any such assessment shall be subject to the provisions of such section.
(vi)
(vii)
(viii)
(ix)
(G) For the purpose of this paragraph—
(i) the term "bank" includes a mutual savings bank, a savings bank, and a savings association (as those terms are defined in section 1813 of this title);
(ii) the term "related interests of such persons" includes any company controlled by such executive officer, director, or person, or any political or campaign committee the funds or services of which will benefit such executive officer, director, or person or which is controlled by such executive officer, director, or person; and
(iii) the terms "control of a company" and "company" have the same meaning as under section 375b of this title.
(H)
(Pub. L. 91–607, title I, §106(b), Dec. 31, 1970, 84 Stat. 1766; Pub. L. 95–630, title VIII, §801, Nov. 10, 1978, 92 Stat. 3690; Pub. L. 97–320, title IV, §§410(f), 424(c), (d)(11), (e), 428, Oct. 15, 1982, 96 Stat. 1520, 1523, 1526; Pub. L. 101–73, title IX, §§905(h), 907(i), Aug. 9, 1989, 103 Stat. 461, 473; Pub. L. 102–242, title III, §306(j), Dec. 19, 1991, 105 Stat. 2359; Pub. L. 104–208, div. A, title II, §2216(a), Sept. 30, 1996, 110 Stat. 3009–413; Pub. L. 109–351, title VI, §601(b), Oct. 13, 2006, 120 Stat. 1978; Pub. L. 111–203, title III, §355, July 21, 2010, 124 Stat. 1547.)
Sections: Previous 1954 1955 1956 1957 1958 1959 1971 1972 1973 1974 1975 1976 1977 1978 2001 Next
Last modified: October 26, 2015