Page:United States Statutes at Large Volume 101 Part 1.djvu/640

 101 STAT. 610

Minorities.

Reports.

PUBLIC LAW 100-86—AUG. 10, 1987

"(b) CAPITAL RECOVERY.—The regulations required to be prescribed under subsection (a) shall provide that an association with net worth of 0.5 percent or more, as determined in accordance with regulatory accounting principles, may be allowed to continue to operate and be eligible for capital forbearance if— "(1) the Board determines that the association's weak capital condition is— . "(A) primarily the result of losses recognized on, the nonperforming status of, or the failure of borrowers to otherwise remain in compliance with the repayment terms of, loans, or participations in loans, the value of the collateral for which has been adversely affected by economic conditions in a designated economically depressed region; or "(B) primarily the result of losses recognized on, the nonperforming status of, or the failure of borrowers to otherwise remain in compliance with the repayment terms of, loans, or participation in loans, made by a minority 1; association 50 percent or more of whose loan assets are minority loans and 50 percent or more of whose originated loans are construction or permanent loans for 1 to 4 family residences; "(2) the Board determines that the association's weak capital I condition is not the result of imprudent operating practices, ,y, such as practices that were speculative at the time the practices were undertaken, insider abuses, excessive operating expenses, dividends paid by the association, or actions taken solely for the purpose of qualifying for capital recovery under this subsection; "(3) the Board approves a plan submitted by the association for increasing such association's capital; and "(4) the association— "(A) adheres to the plan approved under paragraph (3); and "(B) submits regular and complete reports on such lii association's progress in meeting the association's goals under such plan. "(c) ASSOCIATIONS WITH NET WORTH OF LESS THAN 0.5 PERCENT MAY PARTICIPATE IN CAPITAL RECOVERY.—In the regulations

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required to be prescribed under subsection (a), the Board may provide that a well-managed association with a net worth of less than 0.5 percent, as determined in accordance with regulatory accounting principles, may, in the discretion of the Board, be allowed to continue to operate and be eligible for capital forbearance if— "(1) the conditions described in each paragraph of subsection (a) have been met with respect to such association; and "(2) the association has reasonable and demonstrable prospects of returning to a satisfactory capital level, as determined by the Board. "(d) DEFINITIONS.—For purposes of this section— "(1) DESIGNATED ECONOMICALLY DEPRESSED REGION DEFINED.—

The term 'designated economically depressed region' means any geographical region which the Board determines, by regulation, to be a region within which real estate values have suffered serious declines due to severe economic conditions, such as a decline in energy or agricultural values or prices.

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