FDIC Law, Regulations, Related Acts
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1000 - Federal Deposit Insurance Act
SEC. 43. DEPOSITORY INSTITUTIONS LACKING FEDERAL DEPOSIT
INSURANCE.
(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;
(ii) to the appropriate supervisory agency of each State in which
such an institution; and receives deposits, not later than 7 days after
the audit is; and
(iii) in the case of depository institutions described in
subsection (e)(2)(A) the deposits of which are insured by the private
insurer which are members of a Federal home loan bank, to the Federal
Housing FInance Agency, 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.
[Codified to 12 U.S.C. 1831t(a)]
[Source: Section 2[40(a)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 151(a)(1) of title I of the Act of December 19, 1991 (Pub. L.
No. 102--242; 105 Stat. 2282), effective December 19, 1991;
redesignated as section 43(a) by section 1602(b) of title XVI of the
Act of October 28, 1992 (Pub. L. No. 102--550; 106 Stat. 4078),
effective December 19, 1991; section 505(a) of title V of the Act of
October 13, 2006 (Pub. L. No. 109--351; 120 Stat. 1975), effective
October 13, 2006; section 83001(b) of title LXXXIII of the Act of
December 4, 2015 (Pub. L. No. 114-94; 129 Stat. 17a(6), effective
December 4, 2015]
(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 a notice that the institution is not federally insured, and
that if the institution fails, the Federal Government does not
guarantee that depositors will get back their money.
(2) ADVERTISING; PREMISES.--
(A) IN GENERAL.--Include clearly and conspicuously in
all advertising, except as provided in subparagraph (B); and at each
station or window where deposits are normally received, its principal
place of business and all its branches where it accepts deposits or
opens accounts (excluding automated teller machines or point of sale
terminals), and on its main Internet page, a notice that the
institution is not federally insured.
(B) EXCEPTIONS.--The following need not include a notice
that the institution is not federally insured:
(i) Any sign, document, or other item that contains the name of
the depository institution, its logo, or its contact information, but
only if the sign, document, or item does not include any information
about the institution's products or services or information otherwise
promoting the institution.
(ii) Small utilitarian items that do not mention deposit products
or insurance if inclusion of the notice would be impractical.
(3) ACKNOWLEDGMENT OF DISCLOSURE.--
(A) NEW DEPOSITORS OBTAINED OTHER THAN THROUGH A CONVERSION
OR MERGER.--With respect to any depositor who was not a depositor
at the depository institution before October 13, 2006, and who is not a
depositor as described in subparagraph (B), receive any deposit for the
account of such depositor only if the depositor has signed a written
acknowledgement that--
(i) the institution is not federally insured; and
(ii) if the institution fails, the Federal Government does not
guarantee that the depositor will get back the depositor's money.
(B) NEW DEPOSITORS OBTAINED THROUGH A CONVERSION OR
MERGER.--With respect to a depositor at a federally insured
depository institution that converts to, or merges into, a depository
institution lacking federal insurance after October 13, 2006, receive
any deposit for the account of such depositor only if--
(i) the depositor has signed a written acknowledgement described
in subparagraph (A); or
(ii) the institution makes an attempt, as described in
subparagraph (D) and sent by mail no later than 45 days after the
effective date of the conversion or merger, to obtain the
acknowledgment.
(C) CURRENT DEPOSITORS.--Receive any deposit after
October 13, 2006, for the account of any depositor who was a depositor
on that date only if--
(i) the depositor has signed a written acknowledgement described
in subparagraph (A); or
(ii) the institution has complied with the provisions of
subparagraph (E) which are applicable as of the date of the deposit
(D) ALTERNATIVE PROVISION OF NOTICE TO NEW DEPOSITORS
OBTAINED THROUGH A CONVERSION OR MERGER.--
(i) 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.
[Codified to 12 U.S.C. 1831t(b)]
[Source: Section 2[40(b)] of the Act of September 21,
1950 (Pub. L. No. 797; 64 Stat. 882), effective September 21, 1950, as
added by section 151(a)(1) of title I of the Act of December 19, 1991
(Pub. L. No. 102--242; 105 Stat. 2282), section b(1) and b(2) effective
December 19, 1992, and section b(3) effective June 19, 1994;
redesignated as section 43(b)
by section 1602(b) of title XVI of the Act of
October 28, 1992 (Pub. L. No. 102--550; 106 Stat. 4078), effective
December 19, 1991; as amended by section 340 of title III of the Act of
September 23, 1994 (Pub. L. No. 103--325; 108 Stat. 2237), effective
June 19, 1994; section 505(b), (c), and (d) of title V of the Act of
October 13, 2006 (Pub. L. No. 109--351; 120 Stat. 1975), effective
October 13, 2006]
(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.
[Codified to 12 U.S.C. 1831t(c)]
[Source: Section 2[40(c)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 151(a)(1) of title I of the Act of December 19, 1991 (Pub. L.
No. 102--242; 105 Stat. 2282), effective December 19, 1991;
redesignated as section 43(c) by section 1602(b) of title XVI of the
Act of October 28, 1992 (Pub. L. No. 102--550; 106 Stat. 4078),
effective December 19, 1991; section 505(e) of title V of the Act of
October 13, 2006 (Pub. L. No. 109--351; 120 Stat. 1977), effective
October 13, 2006]
(d) Exceptions for Institutions Not Receiving Retail
Deposits.--The Bureau may, by regulation or order, make exceptions
to subsection (b) 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.
[Codified to 12 U.S.C. 1831t(d)]
[Source: Section 2[40(d)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 151(a)(1) of title I of the Act of December 19, 1991 (Pub. L.
No. 102--242; 105 Stat. 2282), effective December 19, 1991;
redesignated as section 43(d) by section 1602(d) of title XVI of the
Act of October 28, 1992 (Pub. L. No. 102--550; 106 Stat. 4078),
effective December 19, 1991; section 2(c)(3) of the Act of February 15,
2006 (Pub. L. No. 109--173; 119 Stat. 3602), effective date shall take
effect on the date on which the final regulations required under
section 2109(a)(2) of the Federal Deposit Insurance Reform Act of 2002
take effect]
(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 19(b)(1)(A)(iv) of the
Federal Reserve Act; 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.
(4) PRIVATE DEPOSIT INSURER.--The term "private
deposit insurer" means any entity insuring the deposits of any
depository institution lacking Federal deposit insurance.
(5) The term "Bureau" means the Bureau of Consumer
Financial Protection.
[Codified to 12 U.S.C. 1831t(e)]
[Source: Section 2[40(f)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 151(a)(1) of title I of the Act of December 19, 1991 (Pub. L.
No. 102--242; 105 Stat. 2282), effective December 19, 1991;
redesignated as section 43(f) by section 1602(b) of title XVI of the
Act of October 28, 1992 (Pub. L. No. 102--550; 106 Stat. 4078),
effective December 19, 1991; redesignated as section 43(e) by section
505(f) of title V of the Act of October 13, 2006 (Pub. L. No. 109--351;
120 Stat. 1977; section 1090(2)(C) of title X of the Act of July 21,
2010 (Pub. L. No. 111--203; 124 Stat. 2094), effective July 21,
2010]
(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,
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.
[Codified to 12 U.S.C. 1831t(f)]
[Source: Section 2[40(g)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 151(a)(1) of title I of the Act of December 19, 1991 (Pub. L.
No. 102--242; 105 Stat. 2282), effective December 19, 1991;
redesignated as section 43(g) by section 1602(b) of title XVI of the
Act of October 28, 1992 (Pub. L. No. 102--550; 106 Stat. 4078),
effective December 19, 1991; redesignated as section 43(f) of title V
of the Act of October 13, 2006 (Pub. L. No. 109--351; 120 Stat. 1977;
section 505(g) of title V of the Act of October 13, 2006 (Pub. L. No.
109--351; 120 Stat. 1978), effective October 13, 2006; section
1094(2)(D) of title X of the Act of July 21, 2010 (Pub. L. No.
111--203; 124 Stat. 2094), effective July 21, 2010]
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