§ 143.3“De novo” applications for a Federal savings association charter.
(a)Definitions. For purposes of this section, the term “de novo association” means any Federal savings association chartered by the OTS prior to July 21, 2011 or by the OCC, the business of which has not been conducted previously under any charter or conducted in the previous three years in substantially the same form as is proposed by the de novo association. A “de novo applicant” means any person or persons who apply to establish a de novo association.
(b)Minimum initial capitalization.
(1) A de novo association must have at least two million dollars in initial capital stock (stock institutions) or initial pledged savings or cash (mutual institutions), except as provided in paragraph (b)(2) of this section. The minimum initial capitalization is the amount of proceeds net of all incurred and anticipated securities issuance expenses, organization expenses, pre-opening expenses, or any expenses paid (or funds advanced) by organizers that are to be reimbursed from the proceeds of a securities offering. In securities offerings for a de novo association, all securities of a particular class in the initial offering shall be sold at the same price.
(2) On a case by case basis, the OCC may, for good cause, approve a de novo association that has less than two million dollars in initial capital or may require a de novo association to have more than two million dollars in initial capital.
(c)Business and investment plans of de novo associations.
(1) To assist the OCC in making the determinations required under section 5(e) of the Home Owners' Loan Act, a de novo applicant shall submit a business plan describing, for the first three years of operation of the de novo association, the major areas of operation, including:
(i) Lending, leasing and investment activity, including plans for meeting Qualified Thrift Lender requirements;
(ii) Deposit, savings and borrowing activity;
(iii) Interest-rate risk management;
(iv) Internal controls and procedures;
(v) Plans for meeting the credit needs of the proposed de novo association's community (including low- and moderate-income neighborhoods);
(vi) Projected statements of condition;
(vii) Projected statements of operations; and
(viii) Any other information requested by the OCC.
(2) The business plan shall:
(i) Provide for the continuation or succession of competent management subject to the approval of the OCC;
(ii) Provide that any material change in, or deviation from, the business plan must receive the prior approval of the OCC;
(iii) Demonstrate the de novo association's ability to maintain required minimum regulatory capital under 12 CFR parts 165 and 167 for the duration of the plan.
(d)Composition of the board of directors.
(1) A majority of a de novo association's board of directors must be representative of the state in which the savings association is located. The OCC generally will consider a director to be representative of the state if the director resides, works or maintains a place of business in the state in which the savings association is located. If the association is located in a Metropolitan Statistical Area (MSA), Primary Metropolitan Statistical Area (PMSA) or Consolidated Metropolitan Statistical Area (CMSA) that incorporates portions of more than one state, a director will be considered representative of the association's state if he or she resides, works or maintains a place of business in the MSA, PMSA or CMSA in which the association is located.
(2) The de novo association's board of directors must be diversified and composed of individuals with varied business and professional experience. In addition, except in the case of a de novo association that is wholly-owned by a holding company, no more than one-third of a board of directors may be in closely related businesses. The background of each director must reflect a history of responsibility and personal integrity, and must show a level of competence and experience sufficient to demonstrate that such individual has the ability to direct the policies of the association in a safe and sound manner. Where a de novo association is owned by a holding company that does not have substantial independent economic substance, the board of directors of the holding company must satisfy the foregoing standards.
(e)Management Officials. Proposed stockholders of ten percent or more of the stock of a de novo association will be considered management officials of the association for the purpose of the OCC's evaluation of the character and qualifications of the management of the association. In connection with the OCC's consideration of an application for permission to organize and subsequent to issuance of a Federal savings association charter to the association by the OCC, any individual or group of individuals acting in concert under 12 CFR part 174, who owns or proposes to acquire, directly or indirectly, ten percent or more of the stock of an association subject to this section, shall submit a Biographical and Financial Report, on forms prescribed by the OCC, to the appropriate OCC licensing office.
(f)Supervisory transactions. This section does not apply to any application for a Federal savings association charter submitted in connection with a transfer or an acquisition of the business or accounts of a savings association if the OCC determines that such transfer or acquisition is instituted for supervisory purposes, or in connection with applications for Federal charters for interim de novo associations chartered for the purpose of facilitating mergers, holding company reorganizations, or similar transactions.
Title 12 published on 2014-01-01
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