Consequences of failing to comply with capital standards

(A) [Reserved].

(B) On or after January 1, 1991 On or after January 1, 1991 , the appropriate Federal banking agency— (i) shall prohibit any asset growth by any savings association not in compliance with capital standards, except as provided in subparagraph (C); and (ii) shall require any savings association not in compliance with capital standards to comply with a capital directive issued by the appropriate Federal banking agency (which may include such restrictions, including restrictions on the payment of dividends and on compensation, as the appropriate Federal banking agency determines to be appropriate).

(C) Limited growth exception The appropriate Federal banking agency may permit any savings association that is subject to subparagraph (B) to increase its assets in an amount not exceeding the amount of net interest credited to the savings association’s deposit liabilities if— (i) the savings association obtains the prior approval of the appropriate Federal banking agency; (ii) any increase in assets is accompanied by an increase in tangible capital in an amount not less than 6 percent of the increase in assets (or, in the discretion of the appropriate Federal banking agency if the leverage limit then applicable is less than 6 percent, in an amount equal to the increase in assets multiplied by the percentage amount of the leverage limit); (iii) any increase in assets is accompanied by an increase in capital not less in percentage amount than required under the risk-based capital standard then applicable; (iv) any increase in assets is invested in low-risk assets, such as first mortgage loans secured by 1- to 4-family residences and fully secured consumer loans; and (v) the savings association’s ratio of core capital to total assets is not less than the ratio existing on January 1, 1991 .

(D) Additional restrictions in case of excessive risks or rates The appropriate Federal banking agency may restrict the asset growth of any savings association that the appropriate Federal banking agency determines is taking excessive risks or paying excessive rates for deposits.

(E) Failure to comply with plan, regulation, or order The appropriate Federal banking agency may treat as an unsafe and unsound practice any material failure by a savings association to comply with any plan, regulation, or order under this paragraph.

(F) Effect on other regulatory authority This paragraph does not limit any authority of the appropriate Federal banking agency under this chapter or any other provision of law.