---
kind: "section"
citation: "12 U.S.C. § 4615"
title: "12"
title_heading: "Banks and Banking"
number: "4615"
heading: "Supervisory actions applicable to undercapitalized regulated entities"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/4615"
units:
  - "Chapter 46 — Government Sponsored Enterprises"
  - "Subchapter II — Required Capital Levels for Regulated Entities, Special Enforcement Powers, and Reviews of Assets and Liabilities"
---

# §4615. Supervisory actions applicable to undercapitalized regulated entities

- (a) **Mandatory actions—**
  - (1) **Required monitoring—** The [Director](/usc/12/4502.md?p=9) shall—
    - (A) closely monitor the condition of any undercapitalized [regulated entity](/usc/12/4502.md?p=20);
    - (B) closely monitor compliance with the capital restoration plan, restrictions, and requirements imposed on an undercapitalized [regulated entity](/usc/12/4502.md?p=20) under this section; and
    - (C) periodically review the plan, restrictions, and requirements applicable to an undercapitalized [regulated entity](/usc/12/4502.md?p=20) to determine whether the plan, restrictions, and requirements are achieving the purpose of this section.
  - (2) **Capital restoration plan—** A [regulated entity](/usc/12/4502.md?p=20) that is classified as undercapitalized shall, within the time period provided in [section 4622(b)](/usc/12/4622.md?p=b) and (d) of this title, submit to the [Director](/usc/12/4502.md?p=9) a capital restoration plan that complies with [section 4622 of this title](/usc/12/4622.md) and carry out the plan after approval.
  - (3) **Restriction on capital distributions—** A [regulated entity](/usc/12/4502.md?p=20) that is classified as undercapitalized may not make any [capital distribution](/usc/12/4502.md?p=5-A) that would result in the [regulated entity](/usc/12/4502.md?p=20) being reclassified as significantly undercapitalized or critically undercapitalized.
  - (4) **Restriction of asset growth—** An undercapitalized [regulated entity](/usc/12/4502.md?p=20) shall not permit its average total assets during any calendar quarter to exceed its average total assets during the preceding calendar quarter, unless—
    - (A) the [Director](/usc/12/4502.md?p=9) has accepted the capital restoration plan of the [regulated entity](/usc/12/4502.md?p=20);
    - (B) any increase in total assets is consistent with the capital restoration plan; and
    - (C) the ratio of tangible equity to assets of the [regulated entity](/usc/12/4502.md?p=20) increases during the calendar quarter at a rate sufficient to enable the [regulated entity](/usc/12/4502.md?p=20) to become adequately capitalized within a reasonable time.
  - (5) **Prior approval of acquisitions and new activities—** An undercapitalized [regulated entity](/usc/12/4502.md?p=20) shall not, directly or indirectly, acquire any interest in any entity or engage in any new activity, unless—
    - (A) the [Director](/usc/12/4502.md?p=9) has accepted the capital restoration plan of the [regulated entity](/usc/12/4502.md?p=20), the [regulated entity](/usc/12/4502.md?p=20) is implementing the plan, and the [Director](/usc/12/4502.md?p=9) determines that the proposed action is consistent with and will further the achievement of the plan; or
    - (B) the [Director](/usc/12/4502.md?p=9) determines that the proposed action will further the purpose of this subchapter.
- (b) **Reclassification from undercapitalized to significantly undercapitalized—** The [Director](/usc/12/4502.md?p=9) shall reclassify as significantly undercapitalized a [regulated entity](/usc/12/4502.md?p=20) that is classified as undercapitalized (and the [regulated entity](/usc/12/4502.md?p=20) shall be subject to the provisions of [section 4616 of this title](/usc/12/4616.md)) if—
  - (1) the [regulated entity](/usc/12/4502.md?p=20) does not submit a capital restoration plan that is substantially in compliance with [section 4622 of this title](/usc/12/4622.md) within the applicable period or the [Director](/usc/12/4502.md?p=9) does not approve the capital restoration plan submitted by the [regulated entity](/usc/12/4502.md?p=20); or
  - (2) the [Director](/usc/12/4502.md?p=9) determines that the [regulated entity](/usc/12/4502.md?p=20) has failed to comply with the capital restoration plan and fulfill the schedule for the plan approved by the [Director](/usc/12/4502.md?p=9) in any material respect.
- (c) **Other discretionary safeguards—** The [Director](/usc/12/4502.md?p=9) may take, with respect to an undercapitalized [regulated entity](/usc/12/4502.md?p=20), any of the actions authorized to be taken under [section 4616 of this title](/usc/12/4616.md) with respect to a significantly undercapitalized [regulated entity](/usc/12/4502.md?p=20), if the [Director](/usc/12/4502.md?p=9) determines that such actions are necessary to carry out the purpose of this subchapter.

## Source credit

(Pub. L. 102–550, title XIII, § 1365, Oct. 28, 1992, 106 Stat. 3978; Pub. L. 110–289, div. A, title I, § 1143, July 30, 2008, 122 Stat. 2732.)

## Notes

### Editorial Notes

### Amendments

2008—Subsec. (a)(1). Pub. L. 110–289, § 1143(4)(B), added par. (1). Former par. (1) redesignated (2).

Pub. L. 110–289, § 1143(2), substituted “A regulated entity” for “An enterprise”.

Subsec. (a)(2). Pub. L. 110–289, § 1143(4)(A), redesignated par. (1) as (2). Former par. (2) redesignated (3).

Pub. L. 110–289, § 1143(1), (2), substituted “the regulated entity” for “the enterprise” and “A regulated entity” for “An enterprise”.

Subsec. (a)(3). Pub. L. 110–289, § 1143(4)(A), redesignated par. (2) as (3).

Subsec. (a)(4), (5). Pub. L. 110–289, § 1143(4)(C), added pars. (4) and (5).

Subsec. (b). Pub. L. 110–289, § 1143(5)(A), (B), substituted “Reclassification” for “Discretionary reclassification” in heading and “shall” for “may” in introductory provisions.

Pub. L. 110–289, § 1143(1), (3), substituted “a regulated entity” for “an enterprise” and “the regulated entity” for “the enterprise” in introductory provisions.

Subsec. (b)(1). Pub. L. 110–289, § 1143(1), substituted “the regulated entity” for “the enterprise” in two places.

Subsec. (b)(2). Pub. L. 110–289, § 1143(5)(C), struck out “make, in good faith, reasonable efforts necessary to” before “comply with” and inserted “in any material respect” before period at end.

Pub. L. 110–289, § 1143(1), substituted “the regulated entity” for “the enterprise”.

Subsec. (c). Pub. L. 110–289, § 1143(6), added subsec. (c) and struck out former subsec. (c). Prior to amendment, text read as follows: “This section shall take effect upon the expiration of the 1-year period beginning on the date of the effectiveness of the regulations issued under section 4611(e) of this title establishing the risk-based capital test.”