---
kind: "section"
citation: "12 C.F.R. § 1777.22"
title: "12"
number: "1777.22"
heading: "Limitation on capital distributions."
url: "https://uscodex.org/cfr/12/1777.22"
---

# §1777.22. Limitation on capital distributions.

- (a) **Capital distributions in general.** An Enterprise shall make no capital distribution that would decrease the total capital of the Enterprise to an amount less than the risk-based capital level or the core capital of the Enterprise to an amount less than the minimum capital level without the prior written approval of OFHEO.
- (b) **Capital distributions by an Enterprise that is not adequately capitalized—**
  - (1) **Prohibited distributions.** An Enterprise that is not classified as adequately capitalized shall make no capital distribution that would result in the Enterprise being classified into a lower capital classification than the one to which it is classified at the time of such distribution.
  - (2) **Restricted distributions.** An Enterprise classified as significantly or critically undercapitalized shall make no capital distribution without the prior written approval of OFHEO. OFHEO may grant a request for such a capital distribution only if OFHEO determines, in its discretion, that the distribution:
    - (i) Will enhance the ability of the Enterprise to meet the risk-based capital level and the minimum capital level promptly;
    - (ii) Will contribute to the long-term financial safety and soundness of the Enterprise; or
    - (iii) **Is otherwise in the public interest.**

## Notes

### Authority

Authority: 12 U.S.C. 1452(b)(2), 1456(c), 1718(c)(2), 1723a(k), 4513(a), 4513(b), 4514, 4517, 4611-4619, 4622, 4623, 4631, 4635.

### Source

Source: 67 FR 3598, Jan. 25, 2002, unless otherwise noted.