Exemption from certain sanctions

(A) Application for exemption Any savings association not in compliance with the capital standards prescribed under paragraph (1) may apply to the appropriate Federal banking agency for an exemption from any applicable sanction or penalty for noncompliance which the appropriate Federal banking agency may impose under this chapter.

(B) Effect of grant of exemption If the appropriate Federal banking agency approves any savings association’s application under subparagraph (A), the only sanction or penalty to be imposed by the appropriate Federal banking agency under this chapter for the savings association’s failure to comply with the capital standards prescribed under paragraph (1) is the growth limitation contained in paragraph (6)(B) or paragraph (6)(C), whichever is applicable.

(C) Standards for approval or disapproval (i) Approval The appropriate Federal banking agency may approve an application for an exemption if the appropriate Federal banking agency determines that— (I) such exemption would pose no significant risk to the Deposit Insurance Fund; (II) the savings association’s management is competent; (III) the savings association is in substantial compliance with all applicable statutes, regulations, orders, and supervisory agreements and directives; and (IV) the savings association’s management has not engaged in insider dealing, speculative practices, or any other activities that have jeopardized the association’s safety and soundness or contributed to impairing the association’s capital. (ii) Denial or revocation of approval The appropriate Federal banking agency shall deny any application submitted under clause (i) and revoke any prior approval granted with respect to any such application if the appropriate Federal banking agency determines that the association’s failure to meet any capital standards prescribed under paragraph (1) is accompanied by— (I) a pattern of consistent losses; (II) substantial dissipation of assets; (III) evidence of imprudent management or business behavior; (IV) a material violation of any Federal law, any law of any State to which such association is subject, or any applicable regulation; or (V) any other unsafe or unsound condition or activity, other than the failure to meet such capital standards.

(D) Submission of plan required Any application submitted under subparagraph (A) shall be accompanied by a plan which— (i) meets the requirements of paragraph (6)(A)(ii); and (ii) is acceptable to the appropriate Federal banking agency.

(E) Failure to comply with plan The appropriate Federal banking agency shall treat as an unsafe and unsound practice any material failure by any savings association which has been granted an exemption under this paragraph to comply with the provisions of any plan submitted by such association under subparagraph (D).

(F) Exemption not available with respect to unsafe or unsound practices This paragraph does not limit any authority of the appropriate Federal banking agency under any other provision of law, including section 8 of the Federal Deposit Insurance Act [ 12 U.S.C. 1818 ], to take any appropriate action with respect to any unsafe or unsound practice or condition of any savings association, other than the failure of such savings association to comply with the capital standards prescribed under paragraph (1).