12 C.F.R. §§ 192.320–192.485

§192.320. Order of priority to purchase conversion shares.

12 C.F.R. § 192.320

A savings association must offer to sell its shares in the following order:

(a)

Eligible account holders.

(b)

Tax-qualified employee stock ownership plans.

(c)

Supplemental eligible account holders.

(d)

Other voting members who have subscription rights.

(e)

The savings association's community, its community and the general public, or the general public.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.325. Timing of offer to sell conversion shares.

12 C.F.R. § 192.325

(a)

In general. A savings association may offer to sell its conversion shares after the appropriate Federal banking agency approves the conversion, clears the proxy statement, and declares the offering circular effective.

(b)

Timing. The offer may commence at the same time the savings association starts the proxy solicitation of its members.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.330. Pricing of conversion shares.

12 C.F.R. § 192.330

(a)

In general. A savings association must sell its conversion shares at a uniform price per share and at a total price that is equal to the estimated pro forma market value of its shares after the conversion.

(b)

Maximum price. The maximum price must be no more than 15 percent above the midpoint of the estimated price range in the savings association's offering circular.

(c)

Minimum price. The minimum price must be no more than 15 percent below the midpoint of the estimated price range in the savings association's offering circular.

(d)

Increase in price. If the appropriate Federal banking agency permits, the savings association may increase the maximum price of conversion shares sold. The maximum price, as adjusted, must be no more than 15 percent above the maximum price computed under paragraph (b) of this section.

(e)

Price range. The maximum price must be between $5 and $50 per share.

(f)

Inclusion in preliminary offering circular. The savings association must include the estimated price in any preliminary offering circular.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.335. Procedures for the sale of conversion shares.

12 C.F.R. § 192.335

(a)

Distribution of order forms. A savings association must distribute order forms to all eligible account holders, supplemental eligible account holders, and other voting members to enable them to subscribe for the conversion shares they are permitted under the plan of conversion. The savings association may either send the order forms with its offering circular or after the savings association distributes its offering circular.

(b)

Sale of shares. A savings association may sell its conversion shares in a community offering, a public offering, or both. The savings association may begin the community offering, the public offering, or both at any time during the subscription offering or upon conclusion of the subscription offering.

(c)

Underwriting commissions and fees. A savings association may pay underwriting commissions (including underwriting discounts). The appropriate Federal banking agency may object to the payment of unreasonable commissions. The savings association may reimburse an underwriter for accountable expenses in a subscription offering if the public offering is limited. If no public offering occurs, the savings association may pay an underwriter a consulting fee. The appropriate Federal banking agency may object to the payment of unreasonable consulting fees.

(d)

Sequence of order fulfillment. If a savings association conducts the community offering, the public offering, or both at the same time as the subscription offering, the savings association must fill all subscription orders first.

(e)

Preparation of order form. A savings association must prepare its order form in compliance with this part and Form OF.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.340. Prohibited sales practices.

12 C.F.R. § 192.340

(a)

Offers, sales, or purchases of conversion shares. In connection with offers, sales, or purchases of conversion shares under this part, a savings association and its directors, officers, agents, or employees may not:

(1)

Employ any device, scheme, or artifice to defraud;

(2)

Obtain money or property by means of any untrue statement of a material fact or any omission of a material fact necessary to make the statements, in light of the circumstances under which they were made, not misleading; or

(3)

Engage in any act, transaction, practice, or course of business that operates or would operate as a fraud or deceit upon a purchaser or seller.

(b)

Conversion. During the conversion, no person may:

(1)

Transfer, or enter into any agreement or understanding to transfer, the legal or beneficial ownership of subscription rights for the savings association's conversion shares or the underlying securities to the account of another;

(2)

Make any offer, or any announcement of an offer, to purchase any of the savings association's conversion shares from anyone but the savings association; or

(3)

Knowingly acquire more than the maximum purchase allowable under the savings association's plan of conversion.

(c)

Exceptions. The restrictions in paragraphs (b)(1) and (2) of this section do not apply to offers for more than 10 percent of any class of conversion shares by:

(1)

An underwriter or a selling group, acting on the savings association's behalf, that makes the offer with a view toward public resale; or

(2)

One or more of the savings association's tax-qualified employee stock ownership plans so long as the plan or plans do not beneficially own more than 25 percent of any class of the savings association's equity securities in the aggregate.

(d)

Violations. Any person found to have violated the restrictions in paragraph (a) or (b) of this section may become subject to an enforcement action, civil money penalties, criminal prosecution, or other legal action.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.345. Permissible forms of subscriber payment.

12 C.F.R. § 192.345

(a)

In general. A subscriber may purchase conversion shares with cash, by a withdrawal from a savings account, or a withdrawal from a certificate of deposit. If a subscriber purchases shares by a withdrawal from a certificate of deposit, the savings association may not assess a penalty for the withdrawal.

(b)

Prohibition. A savings association may not extend credit to any person to purchase the savings association's conversion shares.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.350. Interest on payments for conversion shares.

12 C.F.R. § 192.350

(a)

In general. A savings association must pay interest from the date the savings association receives a payment for conversion shares until the date the savings association completes or terminates the conversion. The savings association must pay interest at no less than its passbook rate for amounts paid in cash, check, or money order.

(b)

Interest on withdrawals from savings accounts. If a subscriber withdraws money from a savings account to purchase conversion shares, the savings association must pay interest on the payment until the savings association completes or terminates the conversion as if the withdrawn amount remained in the account.

(c)

Interest on withdrawals from certificates of deposit. If a depositor fails to maintain the applicable minimum balance requirement because he or she withdraws money from a certificate of deposit to purchase conversion shares, the savings association may cancel the certificate and pay interest at no less than its passbook rate on any remaining balance.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.355. Subscription rights for eligible account holders and supplemental eligible account holders.

12 C.F.R. § 192.355

(a)

Eligible account holders. A savings association must give each eligible account holder subscription rights to purchase conversion shares in an amount equal to the greater of:

(1)

The maximum purchase limitation established for the community offering or the public offering under § 192.395;

(2)

One-tenth of one percent of the total stock offering; or

(3)

Fifteen times the following number— The total number of conversion shares that the savings association will issue, multiplied by the following fraction. The numerator is the total qualifying deposit of the eligible account holder. The denominator is the total qualifying deposits of all eligible account holders. The savings association must round down the product of this multiplied fraction to the next whole number.

(b)

Supplemental eligible account holders. The savings association must give subscription rights to purchase shares to each supplemental eligible account holder in the same amount as described in paragraph (a) of this section, except that the savings association must compute the fraction described in paragraph (a)(3) of this section as follows: The numerator is the total qualifying deposit of the supplemental eligible account holder. The denominator is the total qualifying deposits of all supplemental eligible account holders.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.360. Officers, directors, and associates as eligible account holders.

12 C.F.R. § 192.360

A savings association's officers, directors, and their associates may be eligible account holders. However, if an officer, director, or his or her associate receives subscription rights based on increased deposits in the year before the eligibility record date, the savings association must subordinate subscription rights for these deposits to subscription rights exercised by other eligible account holders.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.365. Purchase of conversion shares by other voting members.

12 C.F.R. § 192.365

(a)

In general. A savings association must give rights to purchase its conversion shares in the conversion to voting members who are neither eligible account holders nor supplemental eligible account holders. The savings association must allocate rights to each voting member that are equal to the greater of:

(1)

The maximum purchase limitation established for the community offering and the public offering under § 192.395; or

(2)

One-tenth of one percent of the total stock offering.

(b)

Subordination of voting rights. The savings association must subordinate the voting members' rights to the rights of eligible account holders, tax-qualified employee stock ownership plans, and supplemental eligible account holders.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.370. Limits on aggregate purchases by officers, directors, and associates.

12 C.F.R. § 192.370

(a)

In general. When a savings association converts, its officers, directors, and their associates may not purchase, in the aggregate, more than the following percentage of the savings association's total stock offering:

(b)

Exception. The purchase limitations in this section do not apply to shares held in tax-qualified employee stock benefit plans that are attributable to the savings association's officers, directors, and their associates.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.375. Allocation of oversubscribed conversion shares.

12 C.F.R. § 192.375

(a)

Eligible account holders. If a savings association's conversion shares are oversubscribed by its eligible account holders, the savings association must allocate shares among the eligible account holders so that each, to the extent possible, may purchase 100 shares.

(b)

Supplemental eligible account holders. If a savings association's conversion shares are oversubscribed by its supplemental eligible account holders, the savings association must allocate shares among the supplemental eligible account holders so that each, to the extent possible, may purchase 100 shares.

(c)

Eligible and supplemental eligible account holders. If a person is an eligible account holder and a supplemental eligible account holder, the savings association must include the eligible account holder's allocation in determining the number of conversion shares that the savings association may allocate to the person as a supplemental eligible account holder.

(d)

Additional allocations. For conversion shares that the savings association does not allocate under paragraphs (a) and (b) of this section, the savings association must allocate the shares among the eligible or supplemental eligible account holders equitably, based on the amounts of qualifying deposits. The savings association must describe this method of allocation in its plan of conversion.

(e)

Oversubscription. If shares remain after the savings association has allocated shares as provided in paragraphs (a) and (b) of this section, and if the savings association's voting members oversubscribe, the savings association must allocate its conversion shares among those members equitably. The savings association must describe the method of allocation in its plan of conversion.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.380. Purchase of conversion shares by employee stock ownership plan.

12 C.F.R. § 192.380

(a)

In general. A savings association's tax-qualified employee stock ownership plan may purchase up to 10 percent of the total offering of the savings association's conversion shares.

(b)

Revised stock valuation range. If the appropriate Federal banking agency approves a revised stock valuation range as described in § 192.330(e), and the final conversion stock valuation range exceeds the former maximum stock offering range, a savings association may allocate conversion shares to its tax-qualified employee stock ownership plan, up to the 10 percent limit in paragraph (a) of this section.

(c)

Open market purchase. If a savings association's tax-qualified employee stock ownership plan is not able to or chooses not to purchase stock in the offering, it may, with prior appropriate Federal banking agency approval and appropriate disclosure in the savings association's offering circular, purchase stock in the open market, or purchase authorized but unissued conversion shares.

(d)

Charitable organizations. A savings association may include stock contributed to a charitable organization in the conversion in the calculation of the total offering of conversion shares under paragraphs (a) and (b) of this section, unless the appropriate Federal banking agency objects on supervisory grounds.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.385. Purchase limitations.

12 C.F.R. § 192.385

(a)

In general. A savings association may limit the number of shares that any person, group of associated persons, or persons otherwise acting in concert, may subscribe to up to five percent of the total stock sold.

(b)

Modification of purchase limit. If a savings association sets a limit of five percent under paragraph (a) of this section, the savings association may modify that limit with appropriate Federal banking agency approval to provide that any person, group of associated persons, or persons otherwise acting in concert subscribing for five percent, may purchase between five and 10 percent as long as the aggregate amount that the subscribers purchase does not exceed 10 percent of the total stock offering.

(c)

Minimum purchase. A savings association may require persons exercising subscription rights to purchase a minimum number of conversion shares. The minimum number of shares must equal the lesser of the number of shares obtained by a $500 subscription or 25 shares.

(d)

Aggregation. In setting purchase limitations under this section, a savings association may not aggregate conversion shares attributed to a person in the savings association's tax-qualified employee stock ownership plan with shares purchased directly by, or otherwise attributable to, that person.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.390. Community offering of conversion shares.

12 C.F.R. § 192.390

(a)

Purchase preference in subscription offering. In a subscription offering, a savings association may give a purchase preference to eligible account holders, supplemental eligible account holders, and voting members residing in its local community.

(b)

Purchase preference in community offering. In a community offering, a savings association must give a purchase preference to natural persons residing in its local community.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.395. Other conditions for community and public offerings.

12 C.F.R. § 192.395

A savings association must offer and sell its stock to achieve a widespread distribution of the stock. If a savings association offers shares in a community offering, a public offering, or both, it must first fill orders for its stock up to a maximum of two percent of the conversion stock on a basis that will promote a widespread distribution of stock. The savings association must allocate any remaining shares on an equal number of shares per order basis until it fills all orders.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.400. Time period for completion of sale of stock.

12 C.F.R. § 192.400

A savings association must complete all sales of its stock within 45 calendar days after the last day of the subscription period, unless the offering is extended under § 192.405.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.405. Extension of the offering period.

12 C.F.R. § 192.405

(a)

In general. A savings association must submit a request in writing to the appropriate Federal banking agency for an extension of any offering period. The appropriate Federal banking agency will not grant any single extension of more than 90 calendar days.

(b)

Post-effective amendment to offering circular. If the appropriate Federal banking agency grants a savings association's request for an extension of time, the savings association must provide a post-effective amendment to the offering circular under § 192.310 to each person who subscribed for or ordered stock. The amendment must indicate that the appropriate Federal banking agency extended the offering period and that each person who subscribed for or ordered stock may increase, decrease, or rescind their subscription or order within the time remaining in the extension period.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.420. Time period for completion of conversion.

12 C.F.R. § 192.420

In its plan of conversion, a savings association must set a date by which the conversion must be completed. This date must not be more than 24 months from the date that the savings association's members approve the plan of conversion. The date, once set, may not be extended by the savings association or by the appropriate Federal banking agency. The savings association must terminate the conversion if it is not completed by that date. The conversion is complete on the date that the savings association accepts the offers for its stock.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.425. Termination of conversion.

12 C.F.R. § 192.425

A conversion may be terminated by:

(a)

A savings association's members failing to approve the conversion at its members' meeting;

(b)

A savings association before its members' meeting; or

(c)

A savings association after the members' meeting, but only if the appropriate Federal banking agency concurs.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.430. Charter amendments.

12 C.F.R. § 192.430

(a)

Conversion from Federally-chartered mutual savings association or savings bank to Federally-chartered stock savings association or savings bank. If the savings association is a Federally-chartered mutual savings association or savings bank and it converts to a Federally-chartered stock savings association or savings bank, it must apply to the OCC to amend its charter and bylaws consistent with 12 CFR 5.22, as part of the savings association's application for conversion. The savings association may only include OCC pre-approved anti-takeover provisions in its amended charter and bylaws. See 12 CFR 5.22(g)(7).

(b)

Conversion from Federally-chartered mutual savings association or savings bank to State-chartered stock savings association or savings bank. If the savings association is a Federally-chartered mutual savings association or savings bank and is converting to a State-chartered stock savings association under this part, the savings association must surrender its charter to the OCC for cancellation promptly after the State issues its new State stock charter. The savings association must promptly file a copy of its new State stock charter with the FDIC.

(c)

Conversion from State-chartered mutual savings association or savings bank to Federally State-chartered stock savings association or savings bank. If the savings association is a State-chartered mutual savings association or savings bank, and is converting to a Federally chartered stock savings association or savings bank, it must apply to the OCC for a new charter and bylaws consistent with 12 CFR 5.22. The savings association may only include OCC pre-approved anti-takeover provisions in its charter and bylaws. See 12 CFR 5.22(g)(7).

(d)

Priority of accounts. In any conversion described in this section that involves a mutual holding company, the charter of each resulting subsidiary savings association of the holding company must contain the following provision:

(e)

Liquidation account. The savings association's new or amended charter must require the savings association to establish and maintain a liquidation account for eligible and supplemental eligible account holders under § 192.450.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.435. Corporate existence after conversion.

12 C.F.R. § 192.435

A savings association's corporate existence will continue following its conversion, unless it converts to a State-chartered stock savings association and State law prescribes otherwise.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.440. Stockholder voting rights after conversion.

12 C.F.R. § 192.440

A savings association must provide its stockholders with exclusive voting rights, except as provided in § 192.445(c).

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.445. Savings account holder's account after conversion.

12 C.F.R. § 192.445

(a)

In general. The savings association must provide each savings account holder, without payment, a withdrawable savings account or accounts in the same amount and under the same terms and conditions as their accounts before the conversion.

(b)

Liquidation account. The savings association must provide a liquidation account for each eligible and supplemental eligible account holder under § 192.450.

(c)

Voting rights. If the savings association is State-chartered and State law requires the savings association to provide voting rights to savings account holders or borrowers, the charter must:

(1)

Limit these voting rights to the minimum required by State law; and

(2)

Require the savings association to solicit proxies from the savings account holders and borrowers in the same manner that the savings association solicits proxies from its stockholders.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.450. Liquidation accounts.

12 C.F.R. § 192.450

(a)

In general. A liquidation account represents the potential interest of eligible account holders and supplemental eligible account holders in the savings association's net worth at the time of conversion. A savings association must maintain a sub-account to reflect the interest of each account holder.

(b)

Distribution of liquidation. Before a savings association may provide a liquidation distribution to common stockholders, it must give a liquidation distribution to those eligible account holders and supplemental eligible account holders who hold savings accounts from the time of conversion until liquidation.

(c)

Recording of liquidation account in financial statements. A savings association may not record the liquidation account in its financial statements. The savings association must disclose the liquidation account in the footnotes to the savings association's financial statements.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.455. Initial balance of liquidation account.

12 C.F.R. § 192.455

The initial balance of the liquidation account is the savings association's net worth in the statement of financial condition included in the final offering circular.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.460. Initial balance of liquidation sub-account.

12 C.F.R. § 192.460

(a)

General rule.

(1)

A savings association must calculate the initial liquidation sub-account balance of each eligible and supplemental eligible account holder at the time of the conversion.

(2)

The initial liquidation sub-account balance for a savings account held by an eligible account holder, for a savings account not held by the eligible account holder on the supplemental eligibility record date, is calculated by multiplying the initial liquidation account balance by the following fraction: The numerator is the qualifying deposit in the savings account on the eligibility record date and the denominator is the calculation in paragraph (a)(5) of this section.

(3)

The initial liquidation sub-account balance for a savings account held by a supplemental eligible account holder, for a savings account not held by the supplemental eligible account holder on the eligibility record date, is calculated by multiplying the initial liquidation account balance by the following fraction: The numerator is the qualifying deposit in the savings account on the supplemental eligibility record date and the denominator is the calculation in paragraph (a)(5) of this section.

(4)

For a savings account held on both the eligibility record date and the supplemental eligibility record date, the amount of the qualifying deposit for calculating the initial liquidation sub-account is the higher account balance of the savings account on either the eligibility record date or the supplemental eligibility record date. The initial liquidation sub-account balance is calculated by multiplying the liquidation account balance by the following fraction: The numerator is the higher amount of the qualifying deposit in the savings account on either the eligibility record date or the supplemental eligibility record date and the denominator is the calculation in paragraph (a)(5) of this section.

(5)

The denominator for calculating the initial liquidation sub-account balance of each eligible and supplemental eligible account holder is the sum of the numerator calculations in paragraphs (a)(2) through (4) of this section.

(b)

Balance increases and decreases. A savings association must not increase the initial liquidation and sub-account balances. It must decrease the initial liquidation account and the sub-account balances under § 192.470 as depositors reduce or close their savings accounts.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.465. Retention of voting rights based on liquidation sub-accounts.

12 C.F.R. § 192.465

Eligible account holders or supplemental eligible account holders do not retain any voting rights based on their liquidation sub-accounts.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.470. Required adjustments to liquidation sub-accounts.

12 C.F.R. § 192.470

(a)

Reductions.

(1)

A savings association must reduce the balance of an eligible account holder's or supplemental eligible account holder's liquidation sub-account if the deposit balance in the account holder's savings account at the close of business on any annual closing date, which for purposes of this section is the savings association's fiscal year end, falls below the lesser of:

(i)

The deposit balance in the account holder's savings account as of the relevant eligibility record date; or

(ii)

The deposit balance in the account holder's savings account as of its lowest balance as of any subsequent annual closing date.

(2)

The reduction in the account holder's liquidation sub-account from its balance at the time of conversion must be proportionate to the reduction in the account holder's savings account from its balance at the time of conversion.

(b)

Prohibition on increases. If a savings association reduces the balance of a liquidation sub-account, it may not subsequently increase it if the deposit balance increases.

(c)

Liquidation account adjustments. A savings association is not required to adjust the liquidation account and sub-account balances at each annual closing date if the savings association maintains sufficient records to make the computations if a liquidation subsequently occurs.

(d)

Maintenance of liquidation sub-account. A savings association must maintain the liquidation sub-account for each account holder as long as the account holder maintains an account with the same social security number.

(e)

Complete liquidation. If there is a complete liquidation, the savings association must provide the account holder of a liquidation sub-account with a liquidation distribution in the amount of the account holder's remaining liquidation sub-account balance.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.475. Definition of liquidation.

12 C.F.R. § 192.475

(a)

In general. A liquidation is a sale of a savings association's assets and settlement of its liabilities with the intent to cease operations and close. Upon liquidation, a savings association must return its charter to the governmental agency that issued it. The government agency must cancel the savings association's charter.

(b)

Other transactions. A merger, consolidation, or similar combination or transaction with another depository institution, is not a liquidation. If a savings association is involved in such a transaction, the surviving institution must assume the liquidation account.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.480. Effect of liquidation account on net worth.

12 C.F.R. § 192.480

The liquidation account does not affect a savings association's net worth.

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.

§192.485. Required liquidation account provision in new Federal charter.

12 C.F.R. § 192.485

If a savings association converts to Federal stock form, it must include the following provision in its new charter: “Liquidation Account. Under appropriate Federal banking agency regulations, the association must establish and maintain a liquidation account for the benefit of its savings account holders as of ______. If the association undergoes a complete liquidation, it must comply with appropriate Federal banking agency regulations with respect to the amount and priorities on liquidation of each of the savings account holder's interests in the liquidation account. A savings account holder's interest in the liquidation account does not entitle the savings account holder to any voting rights.”

Notes, amendments, and revision history

Authority

Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 2901 et seq., 5412(b)(2)(B); 15 U.S.C. 78c, 78 l , 78m, 78n, 78w.

Source

Source: 85 FR 42643, July 14, 2020, unless otherwise noted.