Depository institutions lacking Federal deposit insurance

12 U.S.C. § 1831t
in effect
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(a) Annual independent audit of private deposit insurers(1) Audit requiredAny private deposit insurer shall obtain an annual audit from an independent auditor using generally accepted auditing standards. The audit shall include a determination of whether the private deposit insurer follows generally accepted accounting principles and has set aside sufficient reserves for losses. (2) Providing copies of audit report(A) Private deposit insurerThe private deposit insurer shall provide a copy of the audit report—(i) to each depository institution the deposits of which are insured by the private deposit insurer, not later than 14 days after the audit is completed; (ii) to the appropriate supervisory agency of each State in which such an institution receives deposits, not later than 7 days after the audit is completed; and (iii) in the case of depository institutions described in subsection (e)(2)(A) the deposits of which are insured by the private insurer which are members of a Federal home loan bank, to the Federal Housing Finance Agency, not later than 7 days after the audit is completed. (B) Depository institutionAny depository institution the deposits of which are insured by the private deposit insurer shall provide a copy of the audit report, upon request, to any current or prospective customer of the institution. (3) Enforcement by appropriate State supervisorAny appropriate State supervisor of a private deposit insurer, and any appropriate State supervisor of a depository institution which receives deposits that are insured by a private deposit insurer, may examine and enforce compliance with this subsection under the applicable regulatory authority of such supervisor. (b) Disclosure requiredAny depository institution lacking Federal deposit insurance shall, within the United States, do the following:(1) Periodic statements; account recordsInclude conspicuously in all periodic statements of account, on each signature card, and on each passbook, certificate of deposit, or share certificate.11 So in original. The period probably should not appear. a notice that the institution is not federally insured, and that if the institution fails, the Federal Government does not guarantee that depositors will get back their money. (2) Advertising; premises(A) In generalInclude clearly and conspicuously in all advertising, except as provided in subparagraph (B); and at each station or window where deposits are normally received, its principal place of business and all its branches where it accepts deposits or opens accounts (excluding automated teller machines or point of sale terminals), and on its main Internet page, a notice that the institution is not federally insured. (B) ExceptionsThe following need not include a notice that the institution is not federally insured:(i) Any sign, document, or other item that contains the name of the depository institution, its logo, or its contact information, but only if the sign, document, or item does not include any information about the institution’s products or services or information otherwise promoting the institution. (ii) Small utilitarian items that do not mention deposit products or insurance if inclusion of the notice would be impractical. (3) Acknowledgment of disclosure(A) New depositors obtained other than through a conversion or mergerWith respect to any depositor who was not a depositor at the depository institution before October 13, 2006, and who is not a depositor as described in subparagraph (B), receive any deposit for the account of such depositor only if the depositor has signed a written acknowledgement that—(i) the institution is not federally insured; and (ii) if the institution fails, the Federal Government does not guarantee that the depositor will get back the depositor’s money. (B) New depositors obtained through a conversion or mergerWith respect to a depositor at a federally insured depository institution that converts to, or merges into, a depository institution lacking federal insurance after October 13, 2006, receive any deposit for the account of such depositor only if—(i) the depositor has signed a written acknowledgement described in subparagraph (A); or (ii) the institution makes an attempt, as described in subparagraph (D) and sent by mail no later than 45 days after the effective date of the conversion or merger, to obtain the acknowledgment. (C) Current depositorsReceive any deposit after October 13, 2006, for the account of any depositor who was a depositor on that date only if—(i) the depositor has signed a written acknowledgement described in subparagraph (A); or (ii) the institution has complied with the provisions of subparagraph (E) which are applicable as of the date of the deposit. (D) Alternative provision of notice to new depositors obtained through a conversion or merger(i) 22 So in original. No cl. (ii) has been enacted. In generalTransmit to each depositor who has not signed a written acknowledgement described in subparagraph (A)—(I) a conspicuous card containing the information described in clauses (i) and (ii) of subparagraph (A), and a line for the signature of the depositor; and (II) accompanying materials requesting the depositor to sign the card, and return the signed card to the institution. (E) Alternative provision of notice to current depositors(i) In generalTransmit to each depositor who was a depositor before October 13, 2006, and has not signed a written acknowledgement described in subparagraph (A)—(I) a conspicuous card containing the information described in clauses (i) and (ii) of subparagraph (A), and a line for the signature of the depositor; and (II) accompanying materials requesting the depositor to sign the card, and return the signed card to the institution. (ii) Manner and timing of notice(I) First noticeMake the transmission described in clause (i) via mail not later than three months after October 13, 2006. (II) Second noticeMake a second transmission described in clause (i) via mail not less than 30 days and not more than three months after a transmission to the depositor in accordance with subclause (I), if the institution has not, by the date of such mailing, received from the depositor a card referred to in clause (i) which has been signed by the depositor. (c) Manner and content of disclosureTo ensure that current and prospective customers understand the risks involved in foregoing Federal deposit insurance, the Bureau, by regulation or order, shall prescribe the manner and content of disclosure required under this section, which shall be presented in such format and in such type size and manner as to be simple and easy to understand. (d) Exceptions for institutions not receiving retail depositsThe Bureau may, by regulation or order, make exceptions to subsection (b) for any depository institution that, within the United States, does not receive initial deposits of less than an amount equal to the standard maximum deposit insurance amount from individuals who are citizens or residents of the United States, other than money received in connection with any draft or similar instrument issued to transmit money. (e) DefinitionsFor purposes of this section:(1) Appropriate supervisorThe “appropriate supervisor” of a depository institution means the agency primarily responsible for supervising the institution. (2) Depository institutionThe term “depository institution” includes—(A) any entity described in section 461(b)(1)(A)(iv) of this title; and (B) any entity that, as determined by the Bureau—(i) is engaged in the business of receiving deposits; and (ii) could reasonably be mistaken for a depository institution by the entity’s current or prospective customers. (3) Lacking Federal deposit insuranceA depository institution lacks Federal deposit insurance if the institution is not either—(A) an insured depository institution; or (B) an insured credit union, as defined in section 101 of the Federal Credit Union Act [12 U.S.C. 1752]. (4) Private deposit insurerThe term “private deposit insurer” means any entity insuring the deposits of any depository institution lacking Federal deposit insurance. (5) BureauThe term “Bureau” means the Bureau of Consumer Financial Protection. (f) Enforcement(1) Limited enforcement authorityCompliance with the requirements of subsections (b), (c), and (e), and any regulation prescribed or order issued under such subsection, shall be enforced under the Consumer Financial Protection Act of 2010, by the Bureau, subject to subtitle B of the Consumer Financial Protection Act of 2010 [12 U.S.C. 5511 et seq.], and under the Federal Trade Commission Act (15 U.S.C. 41 et seq.) by the Federal Trade Commission. (2) Broad State enforcement authority(A) In generalSubject to subparagraph (C), an appropriate State supervisor of a depository institution lacking Federal deposit insurance may examine and enforce compliance with the requirements of this section, and any regulation prescribed under this section. (B) State powersFor purposes of bringing any action to enforce compliance with this section, no provision of this section shall be construed as preventing an appropriate State supervisor of a depository institution lacking Federal deposit insurance from exercising any powers conferred on such official by the laws of such State. (C) Limitation on State action while Federal action pendingIf the Bureau or Federal Trade Commission has instituted an enforcement action for a violation of this section, no appropriate State supervisory agency may, during the pendency of such action, bring an action under this section against any defendant named in the complaint of the Bureau or Federal Trade Commission for any violation of this section that is alleged in that complaint.

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