Page:United States Statutes at Large Volume 122.djvu/2754

 12 2 STA T . 2 73 1 PUBLIC LA W 11 0– 2 89—J UL Y 30, 2008 ‘ ‘ (1)ESTABLI S HMEN TAN DCR ITERIA .—Forpu rpo se so fthi s su b tit l e , the D ire c tor sh a ll, b y re g ulatio n — ‘‘( A ) establish the capital classifications specifie d under paragraph ( 2 ) for the Federal H o m e L oan B an k s ‘‘(B) establish criteria for each such capital classifica - tion based on the amount and types of capital held by a bank and the risk-based, minimum, and critical capital le v els for the banks and taking due consideration of the capital classifications established under subsection (a) for the enterprises, w ith such modifications as the Director determines to be appropriate to reflect the difference in operations between the banks and the enterprises; and ‘‘( C ) shall classify the Federal Home Loan Banks according to such capital classifications. ‘‘(2) CLASSI F ICATI O NS.— T he capital classifications specified under this paragraph are— ‘‘(A) ade q uately capitali z ed; ‘‘(B) undercapitalized; ‘‘(C) significantly undercapitalized; and ‘‘(D) critically undercapitalized. ‘‘(c) DISCRETIONAR Y CLASSIFICATION.— ‘‘(1) G RO U NDS FOR RECLASSIFICATION.—The Director may reclassify a regulated entity under paragraph (2) if— ‘‘(A) at any time, the Director determines in writing that the regulated entity is engaging in conduct that could result in a rapid depletion of core or total capital or the value of collateral pledged as security has decreased signifi- cantly or that the value of the property sub j ect to mortgages held by the regulated entity (or securitized in the case of an enterprise) has decreased significantly; ‘‘(B) after notice and an opportunity for hearing, the Director determines that the regulated entity is in an unsafe or unsound condition; or ‘‘(C) pursuant to section 1 37 1(b), the Director deems the regulated entity to be engaging in an unsafe or unsound practice. ‘‘(2) R ECLASSIFICATION.— I n addition to any other action authorized under this title, including the reclassification of a regulated entity for any reason not specified in this sub- section, if the Director takes any action described in paragraph (1), the Director may classify a regulated entity— ‘‘(A) as undercapitalized, if the regulated entity is otherwise classified as adequately capitalized; ‘‘(B) as significantly undercapitalized, if the regulated entity is otherwise classified as undercapitalized; and ‘‘(C) as critically undercapitalized, if the regulated entity is otherwise classified as significantly undercapital- ized. ’ ’; and ( 5 ) by inserting after subsection (d) (as so redesignated by paragraph (3) of this subsection), the following new sub- section

‘‘(e) RESTRICTION ON CA P ITAL DISTRIBUTIONS.— ‘‘(1) IN G ENERAL.—A regulated entity shall make no capital distribution if, after making the distribution, the regulated entity would be undercapitalized. Regulations.

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