---
kind: "section"
citation: "12 U.S.C. § 3907"
title: "12"
title_heading: "Banks and Banking"
number: "3907"
heading: "Capital adequacy"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/3907"
units:
  - "Chapter 40 — International Lending Supervision"
---

# §3907. Capital adequacy

- (a)
  - (1) Each [appropriate Federal banking agency](/usc/12/3902.md?p=1) shall cause [banking institutions](/usc/12/3902.md?p=2) to achieve and maintain adequate capital by establishing minimum levels of capital for such [banking institutions](/usc/12/3902.md?p=2) and by using such other methods as the [appropriate Federal banking agency](/usc/12/3902.md?p=1) deems appropriate. Each [appropriate Federal banking agency](/usc/12/3902.md?p=1) shall seek to make the capital standards required under this section or other provisions of Federal law for [insured depository institutions](/usc/12/1861.md?p=b-4) countercyclical so that the amount of capital required to be maintained by an [insured depository institution](/usc/12/1861.md?p=b-4) increases in times of economic expansion and decreases in times of economic contraction, consistent with the safety and soundness of the [insured depository institution](/usc/12/1861.md?p=b-4).
  - (2) Each [appropriate Federal banking agency](/usc/12/3902.md?p=1) shall have the authority to establish such minimum level of capital for a [banking institution](/usc/12/3902.md?p=2) as the [appropriate Federal banking agency](/usc/12/3902.md?p=1), in its discretion, deems to be necessary or appropriate in light of the particular circumstances of the [banking institution](/usc/12/3902.md?p=2).
- (b)
  - (1) Failure of a [banking institution](/usc/12/3902.md?p=2) to maintain capital at or above its minimum level as established pursuant to [subsection (a)](#a) may be deemed by the [appropriate Federal banking agency](/usc/12/3902.md?p=1), in its discretion, to constitute an unsafe and unsound practice within the meaning of [section 1818 of this title](/usc/12/1818.md).
  - (2)
    - (A) In addition to, or in lieu of, any other action authorized by law, including [paragraph (1)](#b-1), the [appropriate Federal banking agency](/usc/12/3902.md?p=1) may issue a directive to a [banking institution](/usc/12/3902.md?p=2) that fails to maintain captial[^1] at or above its required level as established pursuant to [subsection (a)](#a).
    - (B)
      - (i) Such directive may require the [banking institution](/usc/12/3902.md?p=2) to submit and adhere to a plan acceptable to the [appropriate Federal banking agency](/usc/12/3902.md?p=1) describing the means and timing by which the [banking institution](/usc/12/3902.md?p=2) shall achieve its required capital level.
      - (ii) Any such directive issued pursuant to this paragraph, including plans submitted pursuant thereto, shall be enforceable under the provisions of [section 1818(i) of this title](/usc/12/1818.md?p=i) to the same extent as an effective and outstanding order issued pursuant to [section 1818(b) of this title](/usc/12/1818.md?p=b) which has become final.
  - (3)
    - (A) Each [appropriate Federal banking agency](/usc/12/3902.md?p=1) may consider such [banking institution](/usc/12/3902.md?p=2)’s progress in adhering to any plan required under this subsection whenever such [banking institution](/usc/12/3902.md?p=2), or an [affiliate](/usc/12/5481.md?p=1) thereof, or the holding company which controls such [banking institution](/usc/12/3902.md?p=2), seeks the requisite approval of such [appropriate Federal banking agency](/usc/12/3902.md?p=1) for any proposal which would divert earnings, diminish capital, or otherwise impede such [banking institution](/usc/12/3902.md?p=2)’s progress in achieving its minimum capital level.
    - (B) Such [appropriate Federal banking agency](/usc/12/3902.md?p=1) may deny such approval where it determines that such proposal would adversely affect the ability of the [banking institution](/usc/12/3902.md?p=2) to comply with such plan.
    - (C) The Chairman of the [Board](/usc/12/1861.md?p=b-3) of Governors of the Federal Reserve System and the [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury shall encourage governments, central banks, and regulatory authorities of other major banking countries to work toward maintaining and, where appropriate, strengthening the capital bases of [banking institutions](/usc/12/3902.md?p=2) involved in international lending.

## Footnotes

[^1]: So in original. Probably should be “capital”.

## Source credit

(Pub. L. 98–181, title I [title IX, § 908], Nov. 30, 1983, 97 Stat. 1280; Pub. L. 111–203, title VI, § 616(c), July 21, 2010, 124 Stat. 1615.)

## Notes

### Editorial Notes

### Amendments

2010—Subsec. (a)(1). Pub. L. 111–203 inserted at end “Each appropriate Federal banking agency shall seek to make the capital standards required under this section or other provisions of Federal law for insured depository institutions countercyclical so that the amount of capital required to be maintained by an insured depository institution increases in times of economic expansion and decreases in times of economic contraction, consistent with the safety and soundness of the insured depository institution.”

### Statutory Notes and Related Subsidiaries

### Effective Date of 2010 Amendment

Amendment by Pub. L. 111–203 effective on the transfer date, see section 616(e) of Pub. L. 111–203, set out as a note under section 1467a of this title.