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United States Code (Last Updated: May 24, 2014) |
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Title 12. BANKS AND BANKING |
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Chapter 16. FEDERAL DEPOSIT INSURANCE CORPORATION |
§ 1831t. Depository institutions lacking Federal deposit insurance
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(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 (A) Private deposit insurer The 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; and (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. (B) Depository institution Any depository institution the deposits of which are insured by the private deposit insurer shall provide a copy of the audit report, upon request, to any current or prospective customer of the institution.
(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. In general
Transmit 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 general Transmit 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 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 Bureau, 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 Bureau 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.
(2) Depository institution The 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 insurance A 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 The term “private deposit insurer” means any entity insuring the deposits of any depository institution lacking Federal deposit insurance.
(5) Bureau The term “Bureau” means the Bureau of Consumer Financial Protection.
(f) Enforcement (1) Limited enforcement authority Compliance with the requirements of subsections (b), (c), and (e), and any regulation prescribed or order issued under such subsection, shall be enforced under the Consumer Financial Protection Act of 2010, by the Bureau, subject to subtitle B of the Consumer Financial Protection Act of 2010 [12 U.S.C. 5511 et seq.], and under the Federal Trade Commission Act (15 U.S.C. 41 et seq.) by the Federal Trade Commission.
(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 Bureau or Federal Trade Commission has instituted an enforcement action for a violation of this section, no appropriate State supervisory agency may, during the pendency of such action, bring an action under this section against any defendant named in the complaint of the Bureau or Federal Trade Commission for any violation of this section that is alleged in that complaint.
References In Text
The Consumer Financial Protection Act of 2010, referred to in subsec. (f)(1), is title X of Pub. L. 111–203,
The Federal Trade Commission Act, referred to in subsec. (f)(1), is act Sept. 26, 1914, ch. 311, 38 Stat. 717, which is classified generally to subchapter I (§ 41 et seq.) of chapter 2 of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see section 58 of Title 15 and Tables.
Amendments
2010—Subsecs. (c), (d), (e)(2)(B). Pub. L. 111–203, § 1090(2)(A)–(C)(i), substituted “Bureau” for “Federal Trade Commission”.
Subsec. (e)(5). Pub. L. 111–203, § 1090(2)(C)(ii), added par. (5).
Subsec. (f)(1). Pub. L. 111–203, § 1090(2)(D)(i), added par. (1) and struck out former par. (1). Prior to amendment, text read as follows: “Compliance with the requirements of subsections (b), (c) and (e), and any regulation prescribed or order issued under any such subsection, shall be enforced under the Federal Trade Commission Act by the Federal Trade Commission.”
Subsec. (f)(2)(C). Pub. L. 111–203, § 1090(2)(D)(ii), added subpar. (C) and struck out former subpar. (C). Prior to amendment, text read as follows: “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.”
2006—Subsec. (a)(3). Pub. L. 109–351, § 505(a), added par. (3).
Subsec. (b)(1). Pub. L. 109–351, § 505(b), substituted “or share certificate.” for “or similar instrument evidencing a deposit”.
Subsec. (b)(2). Pub. L. 109–351, § 505(c), amended heading and text generally. Prior to amendment, text read as follows: “Include conspicuously in all advertising and at each place where deposits are normally received a notice that the institution is not federally insured.”
Subsec. (b)(3). Pub. L. 109–351, § 505(d), amended par. (3) generally. Prior to amendment, par. (3) related to acknowledgement of disclosure and consisted of subpars. (A) to (C).
Subsec. (c). Pub. L. 109–351, § 505(e), amended heading and text generally. Prior to amendment, text read as follows: “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.”
Subsec. (d). Pub. L. 109–173 substituted “an amount equal to the standard maximum deposit insurance amount” for “$100,000”.
Subsec. (e). Pub. L. 109–351, § 505(f), redesignated subsec. (f) as (e) and struck out former subsec. (e) which related to eligibility for Federal deposit insurance.
Subsec. (f). Pub. L. 109–351, § 505(g), amended heading and text generally. Prior to amendment, text read as follows: “Compliance with the requirements of this section, and any regulation prescribed or order issued under this section, shall be enforced under the Federal Trade Commission Act by the Federal Trade Commission.”
Pub. L. 109–351, § 505(f)(2), redesignated subsec. (g) as (f). Former subsec. (f) redesignated (e).
Subsec. (g). Pub. L. 109–351, § 505(f)(2), redesignated subsec. (g) as (f).
1994—Subsec. (b)(3). Pub. L. 103–325 amended heading and text of subsec. (b)(3) generally. Prior to amendment, text read as follows: “Receive deposits only for the account of persons who have signed a written acknowledgment that the institution is not federally insured, and that if the institution fails, the Federal Government does not guarantee that they will get back their money.”
Effective Date Of Amendment
Amendment by Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees.
Amendment by Pub. L. 109–173 effective
Pub. L. 103–325, title III, § 340(b),
Effective Date
Pub. L. 102–242, title I, § 151(a)(2),
Miscellaneous
Pub. L. 102–242, title I, § 151(b),