12 U.S. Code § 4513b - Prudential management and operations standards
The Director shall establish standards, by regulation or guideline, for each regulated entity relating to—
(1) adequacy of internal controls and information systems taking into account the nature and scale of business operations;
(4) management of market risk, including standards that provide for systems that accurately measure, monitor, and control market risks and, as warranted, that establish limitations on market risk;
(7) investments and acquisitions of assets by a regulated entity, to ensure that they are consistent with the purposes of this chapter and the authorizing statutes;
(8) overall risk management processes, including adequacy of oversight by senior management and the board of directors and of processes and policies to identify, measure, monitor, and control material risks, including reputational risks, and for adequate, well-tested business resumption plans for all major systems with remote site facilities to protect against disruptive events;
(9) management of credit and counterparty risk, including systems to identify concentrations of credit risk and prudential limits to restrict exposure of the regulated entity to a single counterparty or groups of related counterparties;
(10) maintenance of adequate records, in accordance with consistent accounting policies and practices that enable the Director to evaluate the financial condition of the regulated entity; and
(b) Failure to meet standards
(1) Plan requirement
(A) In general
If the Director determines that a regulated entity fails to meet any standard established under subsection (a)—
(i) if such standard is established by regulation, the Director shall require the regulated entity to submit an acceptable plan to the Director within the time allowed under subparagraph (C); and
Any plan required under subparagraph (A) shall specify the actions that the regulated entity will take to correct the deficiency. If the regulated entity is undercapitalized, the plan may be a part of the capital restoration plan for the regulated entity under section 4622 of this title.
(C) Deadlines for submission and review
The Director shall by regulation establish deadlines that—
(i) provide the regulated entities with reasonable time to submit plans required under subparagraph (A), and generally require a regulated entity to submit a plan not later than 30 days after the Director determines that the entity fails to meet any standard established under subsection (a); and
(2) Required order upon failure to submit or implement plan
If a regulated entity fails to submit an acceptable plan within the time allowed under paragraph (1)(C), or fails in any material respect to implement a plan accepted by the Director, the following shall apply:
(A) Required correction of deficiency
The Director shall, by order, require the regulated entity to correct the deficiency.
(B) Other authority
The Director may, by order, take one or more of the following actions until the deficiency is corrected:
(i) Prohibit the regulated entity from permitting its average total assets (as such term is defined in section 4516 (b) of this title) during any calendar quarter to exceed its average total assets during the preceding calendar quarter, or restrict the rate at which the average total assets of the entity may increase from one calendar quarter to another.
(ii) Require the regulated entity—
(3) Mandatory restrictions
In complying with paragraph (2), the Director shall take one or more of the actions described in clauses (i) through (iii) of paragraph (2)(B) if—
(A) the Director determines that the regulated entity fails to meet any standard prescribed under subsection (a);
Source(Pub. L. 102–550, title XIII, § 1313B, as added Pub. L. 110–289, div. A, title I, § 1108,July 30, 2008, 122 Stat. 2672.)
References in Text
This chapter, referred to in subsec. (a)(7), was in the original “this title”, meaning title XIII of Pub. L. 102–550, Oct. 28, 1992, 106 Stat. 3941, which is classified principally to this chapter. For complete classification of title XIII to the Code, see Short Title note set out under section 4501 of this title and Tables.
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