12 CFR 1225.4 - Standards and factors.

§ 1225.4 Standards and factors.
(a) Standard for imposing a temporary increase. In making a determination to increase temporarily a minimum capital requirement for a regulated entity or entities, the Director will consider the necessity and consistency of such an increase with the prudential regulation and the safe and sound operations of a regulated entity. The Director may impose a temporary minimum-capital increase if consideration of one or more of the following factors leads the Director to the judgment that the current minimum capital requirement for a regulated entity is insufficient to address the entity's risks:
(1) Current or anticipated declines in the value of assets held by a regulated entity; the amounts of mortgage-backed securities issued or guaranteed by the regulated entity; and, its ability to access liquidity and funding;
(2) Credit (including counterparty), market, operational and other risks facing a regulated entity, especially where an increase in risks is foreseeable and consequential;
(3) Current or projected declines in the capital held by a regulated entity;
(4) A regulated entity's material non-compliance with regulations, written orders, or agreements;
(5) Housing finance market conditions;
(6) Level of reserves or retained earnings;
(7) Initiatives, operations, products, or practices that entail heightened risk;
(8) With respect to a Bank, the ratio of the market value of its equity to par value of its capital stock where the market value of equity is the value calculated and reported by the Bank as “market value of total capital” under 12 CFR 932.5(a)(1)(ii)(A); or
(9) Other conditions as detailed by the Director in the notice provided under § 1225.3.
(b) Standard for rescission of a temporary increase. In making a determination to rescind a temporary increase in the minimum capital level for a regulated entity or entities, whether in full or in part, the Director will consider the consistency of such a rescission with the prudential regulation and safe and sound operations of a regulated entity. The Director will rescind, in full or in part, a temporary minimum capital increase if consideration of one or more of the following factors leads the Director to the judgment that rescission of a temporary minimum-capital increase for a regulated entity is appropriate considering the entity's risks:
(1) Changes to the circumstances or facts that led to the imposition of a temporary increase in the minimum capital levels;
(2) The meeting of targets set for a regulated entity in advance of any capital or capital-related plan agreed to by the Director;
(3) Changed circumstances or facts based on new developments occurring since the imposition of the temporary increase in the minimum capital level, particularly where the original problems or concerns have been successfully addressed or alleviated in whole or in part; or
(4) Such other standard as the Director may consider as detailed by the Director in the notice provided under § 1225.3.

Title 12 published on 2014-01-01

no entries appear in the Federal Register after this date.

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