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Data is current as of January 15, 2008

Title 12:
Banks and Banking

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PART 574—ACQUISITION OF CONTROL OF SAVINGS ASSOCIATIONS

Section Contents
§ 574.1   Scope
of part.
§ 574.2   Definitions.
§ 574.3   Acquisition
of control of savings associations.
§ 574.4   Control.
§ 574.5   Certifications
of ownership.
§ 574.6   Procedural
requirements.
§ 574.7   Determination
by the OTS.
§ 574.8   Qualified
stock issuances by undercapitalized savings associations or holding
companies.
§ 574.100   Rebuttal
of control agreement.

Authority:   12 U.S.C. 1467a, 1817,
1831i.

Source:   54 FR 49690, Nov. 30, 1989,
unless otherwise noted.

§ 574.1   Scope of part.

top

The purpose of this part is to implement the provisions of the Change
in Bank Control Act, 12 U.S.C.1817(j) (“Control Act”), and the Savings and
Loan Holding Company Act, 12 U.S.C. 1467a (“Holding Company Act”),
relating to acquisitions and changes in control of savings associations
that are organized in stock form and savings and loan holding companies
thereof.

[61 FR 60184, Nov. 27, 1996]

§ 574.2   Definitions.

top

As used in this part and in the forms under this part, the following
definitions apply, unless the context otherwise requires:

(a) Acquire when used in connection with the acquisition of
stock of a savings association means obtaining ownership, control, power
to vote, or sole power of disposition of stock, directly or indirectly or
through one or more transactions or subsidiaries, through purchase,
assignment, transfer, exchange, succession, or other means, including:

(1) An increase in percentage ownership resulting from a redemption,
repurchase, reverse stock split or a similar transaction involving other
securities of the same class, and

(2) The acquisition of stock by a group of persons and/or companies
acting in concert which shall be deemed to occur upon formation of such
group: Provided, That an investment advisor shall not be deemed to
acquire the voting stock of its advisee if the advisor:

(i) Votes the stock only upon instruction from the beneficial owner,
and

(ii) Does not provide the beneficial owner with advice concerning the
voting of such stock.

(b) Acquiror means a person or company.

(c) Acting in concert means: (1) Knowing participation in a
joint activity or interdependent conscious parallel action towards a
common goal whether or not pursuant to an express agreement, or

(2) A combination or pooling of voting or other interests in the
securities of an issuer for a common purpose pursuant to any contract,
understanding, relationship, agreement or other arrangement, whether
written or otherwise.

(3) A person or company which acts in concert with another person or
company (“other party”) shall also be deemed to be acting in concert with
any person or company who is also acting in concert with that other party,
except that any tax-qualified employee stock benefit plan as defined in
§563b.25 of this chapter will not be deemed to be acting in concert with
its trustee or a person who serves in a similar capacity solely for the
purpose of determining whether stock held by the trustee and stock held by
the plan will be aggregated.

(d) Affiliate means any person or company which controls, is
controlled by or is under common control with a person, savings
association or company.

(e) [Reserved]

(f) Company means any corporation, partnership, trust,
association, joint venture, pool, syndicate, unincorporated organization,
joint-stock company or similar organization, as defined in paragraph (r)
of this section; but a company does not include:

(1) The Federal Deposit Insurance Corporation, the Resolution Trust
Corporation, the Office of Thrift Supervision, or any Federal Home Loan
Bank, or

(2) Any company the majority of shares of which is owned by:

(i) The United States or any State,

(ii) An officer of the United States or any State in his or her
official capacity, or

(iii) An instrumentality of the United States or any State.

(g) Controlling shareholder means any person who directly or
indirectly or acting in concert with one or more persons or companies, or
together with members of his or her immediate family, owns, controls, or
holds with power to vote 10 percent or more of the voting stock of a
company or controls in any manner the election or appointment of a
majority of the company's board of directors.

(h) Director means the Director of the Office of Thrift
Supervision.

(i) [Reserved]

(j) Immediate family means a person's spouse, father, mother,
children, brothers, sisters and grandchildren; the father, mother,
brothers, and sisters of the person's spouse; and the spouse of the
person's child, brother or sister.

(k) Management official means any president, chief executive
officer, chief operating officer, vice president, director, partner, or
trustee, or any other person who performs or has a representative or
nominee performing similar policymaking functions, including executive
officers of principal business units or divisions or subsidiaries who
perform policymaking functions, for a savings association or a company,
whether or not incorporated.

(l) Office means the Office of Thrift Supervision.

(m) Person means an individual or a group of individuals acting
in concert who do not constitute a “company” as defined in paragraph (f)
of this section.

(n) Repealed Control Act means the Change in Savings and Loan
Control Act, 12 U.S.C. 1730(q), as in effect immediately prior to its
repeal by the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989.

(o) [Reserved]

(p) Savings Association means a Federal savings and loan
association or a Federal savings bank chartered under section 5 of the
Home Owners' Loan Act, a building and loan, savings and loan or homestead
association or a cooperative bank (other than a cooperative bank described
in 12 U.S.C. 1813(a)(2)) the deposits of which are insured by the Federal
Deposit Insurance Corporation, and any corporation (other than a bank) the
deposits of which are insured by the Federal Deposit Insurance Corporation
that the Office and the Federal Deposit Insurance Corporation jointly
determine to be operating in substantially the same manner as a savings
association, and shall include any savings bank or any cooperative bank
which is deemed by the Office to be a savings association under 12 U.S.C.
1467a(1), and any savings and loan holding company as defined in paragraph
(q) of this section.

(q) Savings and loan holding company means any company that
directly or indirectly controls a savings association, but does not
include:

(1) Any company by virtue of its ownership or control of voting stock
of a savings association acquired in connection with the underwriting of
securities if such stock is held only for such period of time (not
exceeding 120 days unless extended by the Office) as will permit the sale
thereof on a reasonable basis; and

(2) Any trust (other than a pension, profit-sharing, stockholders',
voting, or business trust) which controls a savings association if such
trust by its terms must terminate within 25 years or not later than 21
years and 10 months after the death of individuals living on the effective
date of the trust, and:

(i) Was in existence and in control of a savings association on June
26, 1967, or

(ii) Is a testamentary trust; and

(3) A bank holding company that is registered under, and subject to,
the Bank Holding Company Act of 1956, or any company directly or
indirectly controlled by such company (other than a savings
association).

(r) Similar organization for purposes of paragraph (f) of this
section means a combination of parties with the potential for or practical
likelihood of continuing rather than temporary existence, where the
parties thereto have knowingly and voluntarily associated for a common
purpose pursuant to identifiable and binding relationships which govern
the parties with respect to either:

(1) The transferability and voting of any stock or other indicia of
participation in another entity, or

(2) Achievement of a common or shared objective, such as to
collectively manage or control another entity.

(s) Stock means common or preferred stock, general or limited
partnership shares or interests, or similar interests.

(t) Uninsured institution means any financial institution the
deposits of which are not insured by the Federal Deposit Insurance
Corporation.

(u)(1) Voting stock means common or preferred stock, general or
limited partnership shares or interests, or similar interests if the
shares or interests, by statute, charter or in any manner, entitle the
holder:

(i) To vote for or to select directors, trustees, or partners (or
persons exercising similar functions of the issuing savings association or
company); or

(ii) To vote or to direct the conduct of the operations or other
significant policies of the issuer:

(2) Notwithstanding anything in paragraph (u)(1) of this section,
preferred stock, limited partnership shares or interests, or similar
interests are not “voting stock” if:

(i) Voting rights associated with the stock, shares or interests are
limited solely to the type customarily provided by statute with regard to
matters that would significantly and adversely affect the rights or
preference of the stock, security or other interest, such as the issuance
of additional amounts or classes of senior securities, the modification of
the terms of the stock, security or interest, the dissolution of the
issuer, or the payment of dividends by the issuer when preferred dividends
are in arrears;

(ii) The stock, shares or interests represent an essentially passive
investment or financing device and do not otherwise provide the holder
with control over the issuer; and

(iii) The stock, shares or interests do not at the time entitle the
holder, by statute, charter, or otherwise, to select or to vote for the
selection of directors, trustees, or partners (or persons exercising
similar functions) of the issuer;

(3) Notwithstanding anything in paragraphs (u)(1) and (u)(2) of this
section, “voting stock” shall be deemed to include stock and other
securities that, upon transfer or otherwise, are convertible into voting
stock or exercisable to acquire voting stock where the holder of the
stock, convertible security or right to acquire voting stock has the
preponderant economic risk in the underlying voting stock. Securities
immediately convertible into voting stock at the option of the holder
without payment of additional consideration shall be deemed to constitute
the voting stock into which they are convertible; other convertible
securities and rights to acquire voting stock shall not be deemed to vest
the holder with the preponderant economic risk in the underlying voting
stock if the holder has paid less than 50 percent of the consideration
required to directly acquire the voting stock and has no other economic
interest in the underlying voting stock. For purposes of calculating the
percentage of voting stock held by a particular acquiror, stock or other
securities convertible into voting stock or exercisable to acquire voting
stock which are deemed voting stock under this paragraph (u)(3) shall be
included in calculating the amount of voting stock held by the acquiror
and the total amount of stock outstanding only to the extent of the voting
stock obtainable by such acquiror by such conversion or exercise of
rights.

[54 FR 49690, Nov. 30, 1989, as amended at 60 FR 66720, Dec. 26, 1995;
61 FR 60184, Nov. 27, 1996; 71 FR 19812, Apr. 18, 2006; 73 FR 19, Jan. 2,
2008]

§ 574.3   Acquisition of control of savings
associations.

top

(a) Acquisition by a company or certain persons. Unless a
transaction is exempt under paragraph (c) of this section, or exempt from
prior approval under paragraph (d) of this section, no company or any
director or officer of a savings and loan holding company, or any
individual who owns, controls, or holds with power to vote (or holds
proxies representing) more than 25 percent of the voting stock of a
savings and loan holding company, shall acquire control, as defined in
§574.4 (a) and (b) of this part, of a savings association except upon
receipt of the written approval of the Office.

(b) Acquisition by a person. Unless a transaction is exempt
under paragraph (c) of this section, or exempt from prior notice under
paragraph (d) of this section, no person (other than certain persons
affiliated with a savings and loan holding company who are subject to
paragraph (a) of this section), shall acquire control, as defined in
§574.4 (a) and (b) of this part, of a savings association until written
notice has been provided to the Office and (1) the Office indicates in
writing its intent not to disapprove the proposed acquisition or (2) 60
days (or such period of time as the Office may specify if the review
period has been extended under §574.6(c)(3) of this part) have passed
since receipt of a notice deemed sufficient under §574.6(c)(2).
Notwithstanding the forgoing, acquisitions by persons by means of a merger
with an interim association are not subject to this part, but shall be
subject to approval under §563.22, and either §552.13 or applicable state
law.

(c) Exempt transactions. (1) The following transactions are
exempt from the application requirements of paragraph (a) of this
section:

(i) Control of a savings association acquired by devise under the terms
of a will creating a trust which is excluded from the definition of
savings and loan holding company under §574.2(q) of this part;

(ii) Control of a savings association acquired in connection with a
reorganization that involves solely the acquisition of control of that
association by a newly formed company that is controlled by the same
acquirors that controlled the savings association for the immediately
preceding three years, and entails no other transactions, such as an
assumption of the acquirors' debt by the newly formed company: Provided,
that the acquirors have filed with the Office an H–(e)4 notification as
provided in section 574.6 of this part and the OTS does not object to the
acquisition within 30 days of the filing date;

(iii) Control of a savings association acquired by a bank holding
company that is registered under and subject to, the Bank Holding Company
Act of 1956, or any company controlled by such bank holding company;

(iv) Control of a savings association acquired solely as a result of
(A) a pledge or hypothecation of stock to secure a loan contracted for in
good faith or (B) the liquidation of a loan contracted for in good faith,
in either case where such loan was made in the ordinary course of the
business of the lender: Provided, further, That acquisition of
control pursuant to such pledge, hypothecation or liquidation is reported
to the Office within 30 days, and Provided, further, That the
acquiror shall not retain such control for more than one year from the
date on which such control was acquired; however, the Office may, upon
application by an acquiror, extend such one-year period from year to year,
for an additional period of time not exceeding three years, if the Office
finds such extension is warranted and would not be detrimental to the
public interest;

(v) Control of a savings association acquired through a percentage
increase in stock ownership following a pro rata stock dividend or
stock split, if the proportional interests of the recipients remain
substantially the same;

(vi) Acquisition of additional stock after approval under §574.7 of
this part, or any predecessor provision, has been received: Provided,
That such acquisition is consistent with any conditions imposed in
connection with such approval and with the representations made by the
acquiror in its application;

(vii) Acquisitions of up to twenty-five percent (25%) of a class of
stock by a tax-qualified employee stock benefit plan as defined in
§563b.25; and

(viii) Acquisitions of up to 15 percent of the voting stock of any
savings association by a savings and loan holding company (other than a
bank holding company) in connection with a qualified stock issuance if
such acquisition is approved by the Office pursuant to §574.8(a).

(2) The following transactions are exempt from the notice requirements
of paragraph (b) of this section:

(i) Transactions which are exempt pursuant to paragraphs (c)(1)(iii),
(c)(1)(iv), (c)(1)(v), and (c)(1)(vi) of this section;

(ii) Transactions for which approval is required under paragraph (a) of
this section;

(iii) Transactions for which approval is required under part 546 or
§552.13 and §563.22 of this chapter;

(iv) Transactions for which a change of control notice must be
submitted to the Board of Governors of the Federal Reserve System pursuant
to the Change in Bank Control Act, 12 U.S.C. 1817(j);

(v) Acquisition of additional stock of a savings association by any
person who:

(A) Has held power to vote 25 percent or more of any class of voting
stock in such association continuously since March 9, 1979; or

(B) Has maintained control of the savings association continuously
since acquiring control in compliance with the Control Act (or the
Repealed Control Act) and the Office's regulations thereunder then in
effect: Provided, That such acquisition is consistent with any
conditions imposed in connection with such acquisition of control and with
the representations made by the acquiror in its notice; and

(vi) Acquisitions of stock of a de novo federal savings
association in connection with the organization of such association:
Provided, That the Office has considered the financial and
managerial resources of the acquiror in granting the association its
federal savings association charter; and additional acquisitions of stock
of such association, and further provided, that the acquisitions
are consistent with any conditions imposed in connection with the approval
of the association's charter and with representations made by the acquiror
in its application for a federal savings association charter, and that the
Regional Director has no supervisory objection to the acquiror's
additional acquisitions.

(3) An acquiror that would be considered to be in control of a savings
association pursuant to §574.4 of this part on December 26, 1985, shall
not be subject to this §574.3 unless the acquiror acquires additional
stock of the savings association or obtains a control factor with respect
to such association after December 26, 1985: Provided, That an
acquiror shall not be deemed to have acquired control of a savings
association on the basis of actions taken prior to December 26, 1985, or
on the basis of actions taken after December 26, 1985, if such actions are
pursuant to and consistent with a materially complete application under
the Holding Company Act or notice under the Repealed Control Act filed
prior to December 26, 1985, if such acquisition is made pursuant to an
application approved under the Holding Company Act or a notice under the
Repealed Control Act that was not disapproved.

(d) Transactions exempt from prior approval or notice. (1)
Subject to the conditions set forth in paragraph (d)(2) of this section,
the following transactions are exempt from prior approval and prior notice
under §574.3: Provided, That the timing of the transaction was not
within the control of the acquiror.

(i) Control of a savings association acquired through bona fide
gift;

(ii) Control of a savings association acquired through liquidation of a
loan contracted in good faith where the loan was not made in the ordinary
course of business of the lender;

(iii) Control of a savings association acquired through a percentage
increase in ownership following a stock split or redemption that was not
pro rata ;

(iv) Control determined pursuant to §574.4 (a) or (b) as a result of
actions by third parties that are not within the control of the
acquiror;

(v) Control of a savings association acquired through testate or
intestate succession: Provided, That the acquiror transmits written
notification of the acquisition to the Office within 60 days of the
acquisition and provides such additional information as the Office may
specifically request.

(2) The exemptions provided by paragraphs (d)(1)(i) through (d)(1)(iv)
of this section are subject to the following conditions:

(i) The acquiror shall file an application, notice or rebuttal, as
appropriate, with the Office within 90 days of acquisition of control;

(ii) The acquiror shall not take any action to direct the management or
policies of the savings association or which are designed to effect a
change in the business plan of the savings association other than voting
on matters that may be presented to stockholders by management of the
savings association until the Office has acted favorably upon the
acquiror's application or notice, and the Office may require that the
acquiror take such steps as the Office deems necessary to insure that
control is not exercised; and

(iii) If the Office disapproves the acquiror's application or notice,
the acquiror shall divest such portion of the stock held by the acquiror
so as to cause the acquiror not to be determined to be in control of the
savings association under §574.4 of this part, within one year or such
shorter period of time and in the manner that the Office may order.

(e) Prohibited acquisitions. No acquisition shall be approved by
the Office pursuant to §574.3(a) which would result in the formation by
any company, through one or more subsidiaries or through one or more
transactions, of a multiple savings and loan holding company controlling
savings associations in more than one state where the acquisition causes a
savings association to become an affiliate of another savings association
with which it was not previously affiliated unless:

(1) Such company, or a savings association subsidiary of such company,
is authorized to acquire control of a savings association subsidiary, or
to operate a home or branch office, in the additional state or states
pursuant to section 13(k) of the Federal Deposit Insurance Act, 12 U.S.C.
1823(k) (or section 408(m) of the National Housing Act as in effect
immediately prior to enactment of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989);

(2) Such company controls a savings association subsidiary which
operated a home or branch office in the additional state or states as of
March 5, 1987; or

(3) The statute laws of the state in which the savings association,
control of which is to be acquired, is located are such that a savings
association chartered by such state could be acquired by a savings
association chartered by the state where the acquiring savings association
or savings and loan holding company is located (or by a holding company
that controls such a state chartered savings association), and such
statute laws specifically authorize such an acquisition by language to
that effect and not merely by implication.

[54 FR 49690, Nov. 30, 1989, as amended at 57 FR 14348, Apr. 20, 1992;
60 FR 66720, Dec. 26, 1995; 61 FR 60184, Nov. 27, 1996; 67 FR 52035, Aug.
9, 2002]

§ 574.4   Control.

top

(a) Conclusive control. (1) An acquiror shall be deemed to have
acquired control of a savings association, other than a savings and loan
holding company, if the acquiror directly or indirectly, through one or
more subsidiaries or transactions or acting in concert with one or more
persons or companies:

(i) Acquires more than 25 percent of any class of voting stock of the
savings association;

(ii) Acquires irrevocable proxies representing more than 25 percent of
any class of voting stock of the savings association;

(iii) Acquires any combination of voting stock and irrevocable proxies
representing more than 25 percent of any class of voting stock of a
savings association; or

(iv) Controls in any manner the election of a majority of the directors
of the savings association.

(2) An acquiror shall be deemed to have acquired control of a company,
including a savings and loan holding company, if the acquiror directly or
indirectly, or through one or more subsidiaries or transactions or acting
in concert with one or more persons or companies:

(i) Acquires more than 25 percent of any class of voting stock of the
company;

(ii) Acquires irrevocable proxies representing more than 25 percent of
any class of voting stock of the company;

(iii) Acquires any combination of voting stock and irrevocable proxies
representing more than 25 percent of any class of voting stock of a
savings association;

(iv) Controls in any manner the election of a majority of the directors
or trustees of a company;

(v) Is a general partner of a company;

(vi) Has contributed more than 25 percent of the capital of the
company; or

(vii) Is a trustee of a trust.

(3) A company shall be deemed to control a savings association if the
Office finds, after notice and opportunity for hearing, that the company
has the power directly or indirectly, to exercise a controlling influence
over the management or policies of the savings association.

(4) A person shall be deemed to control a savings association if the
Office determines that such person has the power to direct the management
or policies of the savings association.

(b) Rebuttable control determinations. (1) Except as provided in
§574.8, an acquiror shall be determined, subject to rebuttal, to have
acquired control of a savings association, if the acquiror directly or
indirectly, or through one or more subsidiaries or transactions or acting
in concert with one or more persons or companies:

(i) Acquires more than 10 percent of any class of voting stock of the
savings association and is subject to any control factor, as defined in
paragraph (c) of this section;

(ii) Acquires more than 25 percent of any class of stock of the savings
association and is subject to any control factor, as defined in paragraph
(c) of this section.

(2) An acquiror shall be determined, subject to rebuttal, to have
acquired control of a savings association, if the acquiror directly or
indirectly, or through one or more subsidiaries or transactions or acting
in concert with one or more persons or companies, holds any combination of
voting stock and revocable and/or irrevocable proxies, representing more
than 25 percent of any class of voting stock of a savings association,
excluding such proxies held in connection with a solicitation by, or in
opposition to, a solicitation on behalf of management of the savings
association, but including a solicitation in connection with an election
of directors, and such proxies would enable the acquiror to:

(i) Elect one-third or more of the savings association's board of
directors, including nominees or representatives of the acquiror currently
serving on such board;

(ii) Cause the savings association's stockholders to approve the
acquisition or corporate reorganization of the savings association; or

(iii) Exert a continuing influence on a material aspect of the business
operations of the savings association.

(c) Control factors. For purposes of paragraph (b)(1) of this
section, the following constitute control factors. References to the
acquiror include actions taken directly or indirectly, or through one or
more subsidiaries or transactions or acting in concert with one or more
persons or companies:

(1) The acquiror would be one of the two largest holders of any class
of voting stock of the savings association.

(2) The acquiror would hold more than 25 percent of the total
stockholders' equity of the savings association.

(3) The acquiror would hold more than 35 percent of the combined debt
securities and stockholders' equity of the savings association.

(4) The acquiror is party to any agreement:

(i) Pursuant to which the acquiror possesses a material economic stake
in the savings association resulting from a profit-sharing arrangement,
use of common names, facilities or personnel, or the provision of
essential services to the savings association; or

(ii) That enables the acquiror to influence a material aspect of the
management or policies of the savings association, other than agreements
to which the savings association is a party where the restrictions are
customary under the circumstances and in the case of an acquisition
agreement, which apply only during the period when the acquiror is seeking
the Office's approval to acquire the savings association, the agreement
prohibits transactions between the acquiror and the savings association
and their respective affiliates without approval by the Regional Director
during the pendency of the application process, and the agreement contains
no material forfeiture provisions applicable to the savings association in
the event the acquisition is not approved or not approved by a specified
date.

(5) The acquiror would have the ability, other than through the holding
of revocable proxies, to direct the votes of more than 25 percent of a
class of the savings association's voting stock or to vote more than 25
percent of a class of the savings association's voting stock in the future
upon the occurrence of a future event.

(6) The acquiror would have the power to direct the disposition of more
than 25 percent of a class of the savings association's voting stock in a
manner other than a widely dispersed or public offering.

(7) The acquiror and/or the acquiror's representatives or nominees
would constitute more than one member of the savings association's board
of directors.

(8) The acquiror or a nominee or management official of the acquiror
would serve as the chairman of the board of directors, chairman of the
executive committee, chief executive officer, chief operating officer,
chief financial officer or in any position with similar policymaking
authority in the savings association.

(d) Rebuttable presumptions of concerted action. An acquiror
will be presumed to be acting in concert with the following persons and
companies:

(1) A company will be presumed to be acting in concert with a
controlling shareholder, partner, trustee or management official of such
company with respect to the acquisition of stock of a savings association,
if

(i) Both the company and the person own stock in the savings
association,

(ii) The company provides credit to the person to purchase the savings
association's stock, or

(iii) The company pledges its assets or otherwise is instrumental in
obtaining financing for the person to acquire stock of the savings
association;

(2) A person will be presumed to be acting in concert with members of
the person's immediate family;

(3) Persons will be presumed to be acting in concert with each other
where

(i) Both own stock in a savings association and both are also
management officials, controlling shareholders, partners, or trustees of
another company, or

(ii) One person provides credit to another person or is instrumental in
obtaining financing for another person to purchase stock of the savings
association;

(4) A company controlling or controlled by another company and
companies under common control will be presumed to be acting in
concert;

(5) Persons or companies will be presumed to be acting in concert where
they constitute a group under the beneficial ownership reporting rules
under section 13 or the proxy rules under section 14 of the Securities
Exchange Act of 1934, promulgated by the Securities and Exchange
Commission.

(6) A person or company will be presumed to be acting in concert with
any trust for which such person or company serves as trustee, except that
a tax-qualified employee stock benefit plan as defined in §563b.2(a)(39)
shall not be presumed to be acting in concert with its trustee or person
acting in a similar fiduciary capacity solely for the purposes of
determining whether to combine the holdings of a plan and its trustee or
fiduciary.

(7) Persons or companies will be presumed to be acting in concert with
each other and with any other person or company with which they also are
presumed to act in concert.

(e) Procedures for rebuttal— (1) Rebuttal of control
determination. An acquiror attempting to rebut a determination of
control that would arise under paragraph (b) of this section shall file a
submission with the Office setting forth the facts and circumstances which
support the acquiror's contention that no control relationship would exist
if the acquiror acquires stock or obtains a control factor with respect to
a savings association. The rebuttal must be filed and accepted in
accordance with this section before the acquiror acquires such stock or
control factor.

(i) An acquiror seeking to rebut the determination of control arising
under paragraph (b)(1) of this section shall submit to the Office an
executed agreement materially conforming to the agreement set forth at
§574.100 of this part. Unless agreed to by the Office in writing, no other
agreement or filing shall be deemed to rebut the determination of control
arising under paragraph (b)(1) of this section. If accepted by the Office,
the acquiror shall furnish a copy of the executed agreement to the
association to which the rebuttal pertains.

(ii) An acquiror seeking to rebut the determination of control with
respect to holding of proxies arising under paragraph (b)(2) of this
section shall be subject to the requirements of paragraph (e)(1) of this
section, except that in the case of a rebuttal of the presumption of
control arising under paragraph (b)(2) of this section, the Office may
require the acquiror to furnish information in response to a specific
request for information and depending upon the particular facts and
circumstances, to provide an executed rebuttal agreement materially
conforming to the agreement set forth at §574.100 of this part, with any
modifications deemed necessary by the Office.

(2) Presumptions of concerted action. An acquiror attempting to
rebut the presumption of concerted action arising under paragraph (d) of
this section shall file a submission with the Office setting forth facts
and circumstances which clearly and convincingly demonstrate the
acquiror's contention that no action in concert exists. Such a statement
must be accompanied by an affidavit, in form and content satisfactory to
the Office, executed by each person or company presumed to be acting in
concert, stating that such person or company does not and shall not,
without having made necessary filings and obtained approval or clearance
thereof under the Holding Company Act or the Control Act, as applicable,
have any agreements or understandings, written or tacit, with respect to
the exercise of control, directly or indirectly, over the management or
policies of the savings association, including agreements relating to
voting, acquisition or disposition of the savings association's stock. The
affidavit shall also recite that the signatory is aware that the filing of
a false affidavit may subject the person or company to criminal sanctions,
would constitute a violation of the Office's regulations at 12 CFR
563.180(b), and would be considered a “presumptive disqualifier” under 12
CFR 574.7(g)(1)(v).

(3) Determination. A rebuttal filed pursuant to paragraph (e) of
this section shall not be deemed sufficient unless it includes all the
information, agreements, and affidavits required by the Office and this
part, as well as any additional relevant information as the Office may
require by written request to the acquiror. Within 20 calendar days after
proper filing of a rebuttal submission, the Office will provide written
notification of its determination to accept or reject the submission;
request additional information in connection with the submission; or
return the submission to the acquiror as materially deficient. Within 15
calendar days after proper filing of any additional information furnished
in response to a specific request by the Office, the Office shall notify
the acquiror in writing as to whether the rebuttal is thereby deemed to be
sufficient. If the Office fails to notify an acquiror within such time,
the rebuttal shall be deemed to be accepted. The Office may reject any
rebuttal which is inconsistent with facts and circumstances known to it or
where the rebuttal does not clearly and convincingly refute the rebuttable
determination of control or presumption of action in concert, and may
determine to reject a submission solely on such bases.

(f) Safe harbor. Notwithstanding any other provision of this
section, where an acquiror has no intention to participate in or to seek
to exercise control over a savings association's management or policies,
the acquiror may seek to qualify for a safe harbor with respect to its
ownership of stock of a savings association.

(1) In order to qualify for the safe harbor, an acquiror must submit a
certification to the OTS that shall be signed by the acquiror or an
authorized representative thereof and shall read as follows:

The undersigned makes this submission pursuant to §574.4(f) of the
regulations of the Office of Thrift Supervision (“Office”) with respect to
[name of savings association] and hereby certifies to the Office the
following:

The undersigned is not in control of [name of savings association]
under §574.4(a);

The undersigned is not subject to any control factor as enumerated in
§574.4(c) with respect to the [name of savings association];

The undersigned will not solicit proxies relating to the voting stock
of [name of savings association];

Before any change in status occurs that would bring the undersigned
within the scope of §574.4 (a) or (b), the undersigned will file and
obtain approval of a rebuttal, notice or application, as appropriate.

The undersigned has not acquired stock of [name of savings association]
for the purpose or effect of changing or influencing the control of [name
of savings association] or in connection with or as a participant in any
transaction having such purpose or effect.

(2) An acquiror claiming safe-harbor status may vote freely and dissent
with respect to its own stock. Certifications provided for in this
paragraph must be filed with OTS in accordance with §§516.30 and 516.40 of
this chapter.

[54 FR 49690, Nov. 30, 1989, as amended at 57 FR 14349, Apr. 20, 1992;
60 FR 66720, Dec. 26, 1995; 66 FR 13009, Mar. 2, 2001]

§ 574.5   Certifications of ownership.

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(a) Acquisition of stock. (1) Upon the acquisition of beneficial
ownership that exceeds, in the aggregate, 10 percent of any class of stock
of a savings association or additional stock above 10 percent of the stock
of a savings association occurring after December 26, 1985, an acquiror
shall file with the OTS a certification as described in this section.

(2) The certification filed pursuant to this section shall be signed by
the acquiror or an authorized representative thereof and shall read as
follows:

The undersigned is the beneficial owner of 10 percent or more of a
class of stock of [name of savings association or holding company]. The
undersigned is not in control of such association or company, as defined
in 12 CFR 574.4(a), and is not subject to a rebuttable determination of
control under §574.4(b), and will take no action that would result in a
determination of control or a rebuttable determination of control without
first filing and obtaining approval of an application under the Savings
and Loan Holding Company Act, 12 U.S.C. 1467a, or notice under the Change
in Bank Control Act, 12 U.S.C. 1817(j), or filing and obtaining acceptance
by the Office of Thrift Supervision of a rebuttal of the rebuttable
determination of control.

(3) Notwithstanding anything contained in this paragraph (a), an
acquiror is not required to file a certification if (i) the Office has
approved the acquisition of the savings association or (ii) the acquiror
has filed a materially complete application or notice pursuant to §574.3
of this part.

(b) Privacy. All certifications filed under this §574.5 shall be
for the information of the Office in connection with its examination
functions and shall be provided confidential treatment by the Office.

[54 FR 49690, Nov. 30, 1989, as amended at 57 FR 14349, Apr. 20, 1992;
59 FR 53571, Oct. 25, 1994]

§ 574.6   Procedural requirements.

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(a) Form of application or notice. An application, notice, or
informational filing required by §574.3 of this part shall be filed on the
Application/Information Filing H–(e) ____ form. (As specified in the
form's instructions, the blank line following the H–(e) should be filled
in by applicants with the appropriate “1”, “1–S”, “2”, “3”, or “4”
depending on the type of application.) The specific application
requirements for each type of filing are indicated on the form. An
acquiror may request confidential treatment of portions of an application
or notice only by complying with the requirements of paragraph (f) of this
section. In the case of an application involving a merger (including a
merger with an interim association) the Application/Information Filing
H–(e) ____ form shall be used in lieu of an application that otherwise
would be required for such merger under §§546.2, 552.13, and 563.22 of
this chapter.

(1) H–(e)1. This application type shall be filed under §574.3(a)
of this part by a company, other than a savings and loan holding company,
for approval to acquire direct or indirect control of one savings
association.

(2) H–(e)1–S. This application type shall be filed under
§574.3(a) of this part by a savings association for approval to reorganize
into a holding company structure, provided that the proposed transaction
satisfies each of the conditions for automatic approval specified in
§574.7 (a)(2) and (a)(3) of this part.

(3) H–(e)2. (i) This application type shall be filed under
§574.3(a) of this part:

(A) By a savings and loan holding company for approval to acquire and
hold separately one or more savings associations;

(B) By any other company for approval to acquire and hold separately
more than one savings association;

(C) By a savings and loan holding company for approval of an
acquisition of shares issued by a savings association in a qualified stock
issuance pursuant to §574.8 of this part; or

(D) By any director, officer, or any individual who owns, controls, or
holds with power to vote (or holds proxies representing) more than 25
percent of the voting shares of a savings and loan holding company for
approval of an acquisition of one or more savings associations.

(ii) The OTS may determine as a general matter or on a case-by-case
basis not to require application information not relevant to transactions
described in paragraphs (a)(3)(i) (C) and (D) of this section.

(4) H-(e)3. This application shall be used for all applications
filed under §574.3(a) of this part:

(i) By a savings and loan holding company for approval of acquisitions
by a merger, consolidation, or purchase of assets of a savings association
or uninsured institution or a savings and loan holding company; or

(ii) By any company for approval of acquisitions by a merger,
consolidation, or purchase of assets of two or more savings
associations.

(5) H-(e)4. This information filing shall be used to claim that
a reorganization is exempt from prior written approval of the OTS under
§574.3(c)(1)(ii) of this part.

(6) Notice Form 1393, parts A and B. This form shall be used for
all notices filed under §574.3(b) of this part regarding the acquisition
of control of a savings association by any person or persons not
constituting a company except as provided in paragraph (a)(3) of this
section.

(b) Filing requirements —(1) Applications, notices, and
rebuttals. (i) Complete copies including exhibits and all other
pertinent documents of applications, notices, and rebuttal submissions
shall be filed with the Region in which the savings association or
associations involved in the transaction have their home office or
offices. Unsigned copies shall be conformed. Each copy shall include a
summary of the proposed transaction.

(ii) Any person or company may amend an application, notice or rebuttal
submission, or file additional information, upon request of the OTS or, in
the case of the party filing an application, notice, or rebuttal, upon
such party's own initiative.

(2) H–(e)4 Information filing. Any information filing required
to be made to claim that a reorganization is exempt from prior written
approval of the OTS under §574.3(c)(1)(ii) of this part shall be clearly
labeled “H–(e)4 Information Filing”.

(c) Sufficiency and waiver. (1) Except as provided in
§574.6(c)(5), an application or notice filed pursuant to §574.3 (a) or (b)
shall not be deemed sufficient unless it includes all of the information
required by the form prescribed by the Office and this part, including a
complete description of the acquiror's proposed plan for acquisition of
control whether pursuant to one or more transactions, and any additional
relevant information as the Office may require by written request to the
applicant. Unless an application or notice specifically indicates
otherwise, the application or notice shall be considered to pertain to
acquisition of 100 percent of a savings association's voting stock. Where
an application or notice pertains to a lesser amount of stock, the Office
may condition its approval or non-disapproval to apply only to such
amount, in which case additional acquisitions may be made only by
amendment to the acquiror's application or notice and the Office's
approval or non-disapproval thereof. Failure by an applicant to respond
completely to a written request by the Office for additional information
within 30 calendar days of the date of such request may be deemed to
constitute withdrawal of the application, notice, or rebuttal filing or
may be treated as grounds for denial of an application, issuance of a
notice of disapproval of a notice, or rejection of a rebuttal.

(2) The period for the Office's review of any proposed acquisition will
commence upon receipt by the Office of a notice or application deemed
sufficient under paragraph (c)(1) of this section. The Office shall notify
an acquiror in writing within 30 calendar days after proper filing of an
application or notice as to whether an application or notice—

(i) Is sufficient;

(ii) Is insufficient, and what additional information is requested in
order to render the application or notice sufficient; or

(iii) Is materially deficient and will not be processed. The Office
shall also notify an acquiror in writing within 15 calendar days after
proper filing of any additional information furnished in response to a
specific request by the Office as to whether the application or notice is
thereby deemed to be sufficient. If the Office fails to so notify an
acquiror within such time, the application or notice shall be deemed to be
sufficient as of the expiration of the applicable period.

(3) After additional information has been requested and supplied, the
Office may request additional information only with respect to matters
derived from or prompted by information already furnished, or information
of a material nature that was not reasonably available from the acquiror,
was concealed, or pertains to developments subsequent to the time of the
Office's initial request for additional information. With regard to
information of a material nature that was not reasonably available from
the acquiror or was concealed at the time an application or notice was
deemed to be sufficient or which pertains to developments subsequent to
the time an application or notice was deemed to be sufficient, the Office,
at its option, may request such additional information as it considers
necessary, or may deem the application or notice not to be sufficient
until such additional information is furnished and cause the review period
to commence again in its entirety upon receipt of such additional
information.

(i) The 60-day period for the Office's review of an application or
notice deemed to be sufficient also may be extended by the Office for up
to an additional 30 days.

(ii) The period for the Office's review of a notice may be further
extended not to exceed two additional times for not more than 45 days each
time if—

(A) The Office determines that any acquiring party has not furnished
all the information required under this part;

(B) In the Office's judgment, any material information submitted is
substantially inaccurate;

(C) The Office has been unable to complete an investigation of each
acquiror because of any delay caused by, or the inadequate cooperation of,
such acquiror; or

(D) The Office determines that additional time is needed to investigate
and determine that no acquiring party has a record of failing to comply
with the requirements of subchapter II of chapter 53 of title 31 of the
United States Code.

(4) With respect to an H–(e)4 information filing, the Chief Counsel or
his or her designee shall have 30 days after receipt of a filing deemed
sufficient to disapprove the assertion that the company qualifies for the
exemption provided in §574.3(c)(1)(ii). After the expiration of such
30-day period without response from the Chief Counsel, the filing shall be
deemed to be approved.

(5) The Office may waive any requirements of this paragraph (c)
determined to be unnecessary by the Office, upon its own initiative, upon
the written request of an acquiring person, or in a supervisory case.

(d) Public notice. (1) The acquiror must publish a public notice
of an application under §574.3(a) or §574.8 of this chapter or a notice
under §574.3(b) of this chapter, in accordance with the procedures in
subpart B of part 516 of this chapter. Promptly after publication, the
acquiror must transmit copies of the public notice and the publisher's
affidavit to OTS.

(2) The acquiror must provide a copy of the public notice to the
savings association whose stock is sought to be acquired, and may provide
a copy of the public notice to any other person who may have an interest
in the application.

(3) OTS will notify the appropriate state supervisor and will notify
persons whose requests for announcements, as described in 12 CFR part
563e, Appendix B, have been received in time for the notification. OTS may
also notify any other persons who may have an interest in the application
or notice.

(e) Submission of comments. Commenters may submit comments on
the application or notice in accordance with the procedures in subpart C
of part 516 of this chapter.

(f) Disclosure. (1) Any application, notice, other filings,
public comment, or portion thereof, made pursuant to this part for which
confidential treatment is not requested in accordance with this paragraph
(f), shall be immediately available to the public and not subject to the
procedures set forth herein. Public disclosure shall be made of other
portions of an application, notice, other filing or public comment in
accordance with paragraph (f)(2) of this section, the provisions of the
Freedom of Information Act (5 U.S.C. 552a) and parts 503 and 505 of this
chapter. Applicants and other submitters should provide confidential and
non-confidential versions of their filings, as described in §574.6(f) (2)
and (3) in order to facilitate this process.

(2) Any person who submits any information or causes or permits any
information to be submitted to the Office pursuant to this part may
request that the Office afford confidential treatment under the Freedom of
Information Act to such information for reasons of personal privacy or
business confidentiality, which shall include such information that would
be deemed to result in the commencement of a tender offer under §240.14d–2
of title 17 of the Code of Federal Regulations, or for any other reason
permitted by Federal law. Such request for confidentiality must be made
and justified in accordance with paragraph (f)(5) of this section at the
time of filing, and must, to the extent practicable, identify with
specificity the information for which confidential treatment may be
available and not merely indicate portions of documents or entire
documents in which such information is contained. Failure to specifically
identify information for which confidential treatment is requested,
failure to specifically justify the bases upon which confidentiality is
claimed in accordance with paragraph (f)(5) of this section, or overbroad
and indiscriminate claims for confidential treatment, may be bases for
denial of the request. In addition, the filing party should take all steps
reasonably necessary to ensure, as nearly as practicable, that at the time
the information is first received by the Office (i) it is supplied
segregated from information for which confidential treatment is not being
requested, (ii) it is appropriately marked as confidential, and (iii) it
is accompanied by a written request for confidential treatment which
identifies with specificity the information as to which confidential
treatment is requested. Any such request must be substantiated in
accordance with paragraph (f)(5) of this section.

(3) All documents which contain information for which a request for
confidential treatment is made or the appropriate segregable portions
thereof shall be marked by the person submitting the records with a
prominent stamp, typed legend, or other suitable form of notice on each
page or segregable portion of each page, stating “Confidential Treatment
Requested by [name].” If such marking is impracticable under the
circumstances, a cover sheet prominently marked “Confidential Treatment
Requested by [name]” should be securely attached to each group of records
submitted for which confidential treatment is requested. Each of the
records transmitted in this manner should be individually marked with an
identifying number and code so that they are separately identifiable.

(4) A determination as to the validity of any request for confidential
treatment may be made when a request for disclosure of the information
under the Freedom of Information Act is received, or at any time prior
thereto. If the Office receives a request for the information under the
Freedom of Information Act, OTS will advise the filing party before it
discloses material for which confidential treatment has been
requested.

(5) Substantiation of a request for confidential treatment shall
consist of a statement setting forth, to the extent appropriate or
necessary for the determination of the request for confidential treatment,
the following information regarding the request:

(i) The reasons, concisely stated and referring to specific exemptive
provisions of the Freedom of Information Act, why the information should
be withheld from access under the Freedom of Information Act;

(ii) The applicability of any specific statutory or regulatory
provisions which govern or may govern the treatment of the
information;

(iii) The existence and applicability of any prior determination by the
Office, other Federal agencies, or a court, concerning confidential
treatment of the information;

(iv) The adverse consequences to a business enterprise, financial or
otherwise, that would result from disclosure of confidential commercial or
financial information, including any adverse effect on the business'
competitive position;

(v) The measures taken by the business to protect the confidentiality
of the commercial or financial information in question and of similar
information, prior to, and after, its submission to the Office;

(vi) The ease or difficulty of a competitor's obtaining or compiling
the commercial or financial information;

(vii) Whether commercial or financial information was voluntarily
submitted to the Office, and, if so, whether and how disclosure of the
information would tend to impede the availability of similar information
to the Office;

(viii) The extent, if any, to which portions of the substantiation of
the request for confidential treatment should be afforded confidential
treatment;

(ix) The amount of time after the consummation of the proposed
acquisition for which the information should remain confidential and a
justification thereof;

(x) Such additional facts and such legal and other authorities as the
requesting person may consider appropriate.

(6) Any person requesting access to an application, notice, other
filing, or public comment made pursuant to this part for purposes of
commenting on a pending submission may prominently label such request:
“Request for Disclosure of Filing(s) Made Under part 574/Priority
Treatment Requested.”

(g) Supervisory cases. The provisions of paragraphs (d), (e) and
(f) of this section may be waived by the Office in connection with a
transaction approved by the Office for supervisory reasons.

(h) Notification of State supervisor. Upon receiving a notice
relating to an acquisition of control of a state-chartered savings
association, the Office shall forward a copy of the notice to the
appropriate state savings and loan association supervisory agency, and
shall allow 30 days within which the views and recommendations of such
state supervisory agency may be submitted. The Office shall give due
consideration to the views and recommendations of such state agency in
determining whether to disapprove any proposed acquisition.
Notwithstanding the provisions of this paragraph (h), if the Office
determines that it must act immediately upon any notice of a proposed
acquisition in order to prevent the default of the association involved in
the proposed acquisition, the Office may dispense with the requirement of
this paragraph (h) or, if a copy of the notice is forwarded to the state
supervisory agency, the Office may request that the views and
recommendations of such state supervisory agency be submitted immediately
in any form or by any means acceptable to the Office.

(i) Additional procedures for acquisitions involving mergers.
Acquisitions of control involving mergers (including mergers with an
interim association) shall also be subject to the procedures set forth in
§563.22 of this chapter to the extent applicable, except as provided in
paragraph (a) of this section.

(j) Additional procedures for acquisitions of recently converted
savings associations. Applications, notices and rebuttals involving
acquisitions of the stock of a recently converted savings association
under §563b.3(i)(3) of this chapter shall also address the criteria for
approval set forth at §563b.3(i)(5) of this chapter.

[54 FR 49690, Nov. 30, 1989, as amended at 55 FR 13517, Apr. 11, 1990;
57 FR 14349, Apr. 20, 1992; 59 FR 28470, June 2, 1994; 60 FR 66720, Dec.
26, 1995; 61 FR 65179, Dec. 11, 1996; 66 FR 13009, Mar. 2, 2001; 69 FR
68250, Nov. 24, 2004]

§ 574.7   Determination by the OTS.

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(a) Acquisition by a company. (1) The Office shall approve an
application by any company other than a savings and loan holding company
to acquire control of one savings association unless it determines that
the criteria set forth in paragraph (c) of this section are not met.
Acquisitions involving mergers with an interim association shall also be
subject to §§546.2, 552.13, and 563.22 of this chapter.

(2) Subject to compliance with the requirements of §§546.2, 552.13 and
563.22, as applicable, an application filed pursuant to §574.6(a)(2) by a
savings association solely for the purpose of obtaining approval for the
creation of a savings and loan holding company by such savings
association, and related applications for permission to organize an
interim federal association, and for merger with such interim association,
shall be deemed to be approved 45 calendar days after such applications
are properly filed in accordance with the procedures set forth herein,
unless, prior to such date:

(i) The Office has requested additional information of the applicant in
writing;

(ii) Notified the applicant that the application is materially
deficient and will not be processed; or

(iii) Denied the application prior to that time; provided that to be
eligible for approval under this paragraph (a)(2):

(A) The holding company shall not be capitalized initially in an amount
exceeding the amount the savings association is permitted to pay in
dividends to its holding company as of the date of the reorganization
pursuant to applicable regulations or, in the absence thereof, pursuant to
the then current policy guidelines issued by the OTS;

(B) The creation of the savings and loan holding company by the
association is the sole transaction contained in the application, and
there are no other transactions requiring Office approval incident to the
creation of the holding company (other than the creation of an interim
association that will disappear upon consummation of the reorganization
and the merger of the savings association with such interim association to
effect the reorganization), and the holding company is not also seeking
any regulatory waivers, regulatory forbearances, or resolution of legal or
supervisory issues;

(C) The board of directors and executive officers of the holding
company are composed of persons who, at the time of acquisition, are
executive officers and directors of the association;

(D) The acquisition raises no significant issues of law or policy under
then current Office policy;

(E) Prior to consummation of the reorganization transaction, the
holding company shall enter into any dividend limitation, regulatory
capital maintenance, or prenuptial agreement required by Office
regulations, or in the absence thereof, required pursuant to policy
guidelines issued by the OTS;

(F) The holding company shall furnish the following information in
accordance with the specified time frames:

( 1 ) On the business day prior to the date of consummation of
the acquisition, the chief financial officers of the holding company and
the savings association shall certify to the OTS in writing that no
material adverse events or material adverse changes have occurred with
respect to the financial condition or operations of the holding company or
the savings association since the date of the financial statements
submitted with the application;

( 2 ) No later than thirty days from the date of consummation of
the acquisition, the holding company shall file with the OTS a
certification by legal counsel stating the effective date of the
acquisition, the exact number of shares of stock of the savings
association acquired by the holding company, and that the acquisition has
been consummated in accordance with the provisions of all applicable laws
and regulations and the application;

( 3 ) No later than thirty days from the date of consummation of
the acquisition, the holding company shall file with the OTS an opinion
from its independent auditors certifying that the transaction was
consummated in accordance with generally accepted accounting principles;
and

( 4 ) No later than thirty days from the date of consummation of
the acquisition, the holding company shall file with the OTS a
certification stating that the holding company will not cause the savings
association to deviate materially from the business plan submitted in
connection with the application, unless prior written approval from the
OTS is obtained;

(G) In the event an interim association is utilized to facilitate the
reorganization transaction, the resulting association shall, no later than
30 days from the date of consummation of the reorganization transaction,
furnish a certification by legal counsel stating:

( 1 ) The effective date of the merger involving the interim
association and that the merger has been consummated in accordance with
the Agreement and Plan of Reorganization or similar document pursuant to
which the transaction was accomplished;

( 2 ) The interim association has not opened for business;

( 3 ) The merger was consummated within 120 calendar days of the
date of approval: and

( 4 ) After completion of the organization of the interim
association, the board of directors of the interim association ratified
the Agreement and Plan of Reorganization or similar document; and

(H) The proposed acquisition shall be consummated within 120 days after
the application is automatically approved under this §574.7(a)(2).

(3) To the extent that an association reorganizing into holding company
form is subject to provisions relating to its mutual to stock conversion
imposed by l2 CFR 563b.3(c)(9), (c)(17), (c)(18), (c)(19), (g)(1) or (i),
such provisions shall be applicable to any holding company approved
automatically pursuant to paragraph (a)(2) of this section.

(b) Acquisition by a savings and loan holding company. The
Office shall not approve an acquisition by a savings and loan holding
company to acquire control of a savings association, by any other company
to acquire control of more than one savings association, by any director
or officer of a savings and loan holding company, or any individual who
owns, controls, or holds with power to vote (or holds proxies
representing) more than 25 percent of the voting stock of a savings and
loan holding company to acquire control of a savings association, or by a
savings and loan holding company to acquire a qualified stock issuance by
a savings association pursuant to §574.8 of this part, except in
accordance with paragraph (c) of this section. Before approving any such
acquisition, except a transaction under section 13(k) of the Federal
Deposit Insurance Act, the Office shall request from the Attorney General
and consider any report rendered within 30 days of such request on the
competitive factors involved. Acquisitions involving mergers (including
mergers with an interim association) shall also be subject to §§546.2,
552.13, and 563.22 of this chapter.

(c) Application criteria. (1) The OTS may deny an application by
a company or certain persons, described in paragraph (b) of this section,
affiliated with a savings and loan holding company, to acquire control of
a savings association, or by a savings and loan holding company to acquire
a qualified stock issuance pursuant to §574.8 of this part:

(i) If the OTS finds that the financial and managerial resources and
future prospects of the acquiror and association involved would be
detrimental to the association or the insurance risk of the Deposit
Insurance Fund; or

(ii) If the acquiror fails or refuses to furnish information requested
by the OTS.

(2) Consideration of the managerial resources of a company or savings
association shall include consideration of the competence, experience, and
integrity of the officers, directors, and controlling shareholders of the
company or association. In connection with the applications filed pursuant
to §§574.6 (a)(3) and 574.8 of this part, the OTS will also consider the
convenience and needs of the community to be served. Moreover, the OTS
shall not approve any proposed acquisition:

(i) Which would result in a monopoly, or which would be in furtherance
of any combination or conspiracy to monopolize or to attempt to monopolize
the savings and loan business in any part of the United States;

(ii) The effect of which on any section of the country may be
substantially to lessen competition, or tend to create a monopoly, or
which in any other manner would be in restraint of trade, unless the OTS
finds that the anticompetitive effects of the proposed acquisition are
clearly outweighed in the public interest by the probable effect of the
acquisition in meeting the convenience and needs of the community to be
served;

(iii) If the company fails to provide adequate assurances to the OTS
that the company will make available to the OTS such information on the
operations or activities of the company, and any affiliate of the company,
as the OTS determines to be appropriate to determine and enforce
compliance with the Home Owners' Loan Act; or

(iv) In the case of an application by a foreign bank, if the foreign
bank is not subject to comprehensive supervision or regulation on a
consolidated basis by the appropriate authorities in the home country of
the foreign bank. For purposes of this paragraph (c)(2)(iv),
“comprehensive supervision or regulation on a consolidated basis by the
appropriate authorities” shall be determined using the standards set forth
at 12 CFR 211.24(c)(1)(ii).

(d) Notice criteria. In making its determination whether to
disapprove a notice, the Office may disapprove any proposed acquisition,
if the Office determines that:

(1) The proposed acquisition of control would result in a monopoly or
would be in furtherance of any combination or conspiracy to monopolize or
to attempt to monopolize the banking business in any part of the United
States;

(2) The effect of the proposed acquisition of control in any section of
the country may be substantially to lessen competition or to tend to
create a monopoly or the proposed acquisition of control would in any
other manner be in restraint of trade, and the anticompetitive effects of
the proposed acquisition of control are not clearly outweighed in the
public interest by the probable effect of the transaction in meeting the
convenience and needs of the community to be served;

(3) The financial condition of the acquiring person is such as might
jeopardize the financial stability of the association or prejudice the
interests of the depositors of the association;

(4) The competence, experience, or integrity of the acquiring person or
any of the proposed management personnel indicates that it would not be in
the interests of the depositors of the association, the Office, or the
public to permit such person to control the association;

(5) The acquiring person fails or refuses to furnish information
requested by the Office; or

(6) The Office determines that the proposed acquisition would have an
adverse effect on the Deposit Insurance Fund.

(e) Failure to disapprove a notice. If, upon expiration of the
60-day review period of any notice deemed to be sufficient filed pursuant
to §574.6(c), or extension thereof, the Office has failed to disapprove
such notice, the proposed acquisition may take place: Provided,
That it is consummated within one year and in accordance with the
terms and representations in the notice and that there is no material
change in circumstances prior to the acquisition.

(f) [Reserved]

(g) Presumptive disqualifiers —(1) Integrity factors. The
following factors shall give rise to a rebuttable presumption that an
acquiror may fail to satisfy the managerial resources and future prospects
tests of paragraph (c) of this section or the integrity test of paragraph
(d)(4) of this section:

(i) During the 10-year period immediately preceding filing of the
application or notice, criminal, civil or administrative judgments,
consents or orders, and any indictments, formal investigations,
examinations, or civil or administrative proceedings (excluding routine or
customary audits, inspections and investigations) that terminated in any
agreements, undertakings, consents or orders, issued against, entered into
by, or involving the acquiror or affiliates of the acquiror by any federal
or state court, any department, agency, or commission of the U.S.
Government, any state or municipality, any Federal Home Loan Bank, any
self-regulatory trade or professional organization, or any foreign
government or governmental entity, which involve:

(A) Fraud, moral turpitude, dishonesty, breach of trust or fiduciary
duties, organized crime or racketeering;

(B) Violation of securities or commodities laws or regulations;

(C) Violation of depository institution laws or regulations;

(D) Violation of housing authority laws or regulations; or

(E) Violation of the rules, regulations, codes of conduct or ethics of
a self-regulatory trade or professional organization;

(ii) Denial, or withdrawal after receipt of formal or informal notice
of an intent to deny, by the acquiror or affiliates of the acquiror,
of

(A) Any application relating to the organization of a financial
institution,

(B) An application to acquire any financial institution or holding
company thereof under the Holding Company Act or the Bank Holding Company
Act or otherwise,

(C) A notice relating to a change in control of any of the foregoing
under the Control Act or the Repealed Control Act; or

(D) An application or notice under a state holding company or change in
control statute;

(iii) The acquiror or affiliates of the acquiror were placed in
receivership or conservatorship during the preceding 10 years, or any
management official of the acquiror was a management official or director
(other than an official or director serving at the request of the Office,
the Federal Deposit Insurance Corporation, the Resolution Trust
Corporation, or the former Federal Savings and Loan Insurance Corporation)
or controlling shareholder of a company or savings association that was
placed into receivership, conservatorship, or a management consignment
program, or was liquidated during his or her tenure or control or within
two years thereafter;

(iv) Felony conviction of the acquiror, an affiliate of the acquiror or
a management official of the acquiror or an affiliate of the acquiror;

(v) Knowingly making any written or oral statement to the Office or any
predecessor agency (or its delegate) in connection with an application,
notice or other filing under this part that is false or misleading with
respect to a material fact or omits to state a material fact with respect
to information furnished or requested in connection with such an
application, notice or other filing;

(vi) Acquisition and retention at the time of submission of an
application or notice, of stock in the savings association by the acquiror
in violation of §574.3 or its predecessor sections.

(2) Financial factors. The following shall give rise to a
rebuttable presumption that an acquiror may fail to satisfy the
financial-resources and future-prospects tests of paragraph (c) of this
section, or the financial condition test of paragraph (d)(3) of this
section:

(i) Liability for amounts of debt which, in the opinion of the Office,
create excessive risks of default and pressure on the savings association
to be acquired; or

(ii) Failure to furnish a business plan or furnishing a business plan
projecting activities which are inconsistent with economical home
financing.

[54 FR 49690, Nov. 30, 1989, as amended at 57 FR 14349, Apr. 20, 1992;
59 FR 28471, June 2, 1994; 59 FR 44627, Aug. 30, 1994; 60 FR 66720, Dec.
26, 1995; 71 FR 19812, Apr. 18, 2006]

§ 574.8   Qualified stock issuances by
undercapitalized savings associations or holding companies.

top

(a) Acquisitions by savings and loan holding companies. No
savings and loan holding company shall be deemed to control a savings
association solely by reason of the purchase by such savings and loan
holding company of shares issued by such savings association, or issued by
any savings and loan holding company (other than a bank holding company)
which controls such savings association, in connection with a qualified
stock issuance if prior approval of such acquisition is granted by the
Office under this §574.8, unless the acquiring savings and loan holding
company, directly or indirectly, or acting in concert with 1 or more other
persons, or through 1 or more subsidiaries, owns, controls, or holds with
power to vote, or holds proxies representing, more than 15 percent of the
voting shares of such savings association or holding company.

(b) Qualification. For purposes of this section, any issuance of
shares of stock shall be treated as a qualified stock issuance if the
following conditions are met:

(1) The shares of stock are issued by—

(i) An undercapitalized savings association, which for purposes of this
paragraph (b)(1)(i) shall mean any savings association—

(A) The assets of which exceed the liabilities of such association;
and

(B) Which does not comply with one or more of the capital standards in
effect under section 5(t) of the Home Owners' Loan Act; or

(ii) A savings and loan holding company which is not a bank holding
company but which controls an undercapitalized savings association if, at
the time of issuance, the savings and loan holding company is legally
obligated to contribute the net proceeds from the issuance of such stock
to the capital of an undercapitalized savings association subsidiary of
such holding company.

(2) All shares of stock issued consist of previously unissued stock or
treasury shares.

(3) All shares of stock issued are purchased by a savings and loan
holding company that is registered, as of the date of purchase, with the
Office in accordance with the provisions of section 10(b) of the Home
Owners' Loan Act and the Office's regulations promulgated thereunder.

(4) Subject to paragraph (c) of this section, the Office approves the
purchase of the shares of stock by the acquiring savings and loan holding
company.

(5) The entire consideration for the stock issued is paid in cash by
the acquiring savings and loan holding company.

(6) At the time of the stock issuance, each savings association
subsidiary of the acquiring savings and loan holding company (other than
an association acquired in a transaction pursuant to section 13(c) or
13(k) of the Federal Deposit Insurance Act, or section 408(m) of the
National Housing Act, as in effect immediately prior to enactment of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989) has
capital (after deducting any subordinated debt, intangible assets, and
deferred, unamortized gains or losses) of not less than
61/2percent of the total assets of such savings association.

(7) Immediately after the stock issuance, the acquiring savings and
loan holding company holds not more than 15 percent of the outstanding
voting stock of the issuing undercapitalized savings association or
savings and loan holding company.

(8) Not more than one of the directors of the issuing association or
company is an officer, director, employee, or other representative of the
acquiring company or any of its affiliates.

(9) Transactions between the savings association or savings and loan
holding company that issues the shares pursuant to this section and the
acquiring company and any of its affiliates shall be subject to the
provisions of section 11 of the Home Owners' Loan Act and the Office's
regulations promulgated thereunder.

(c) Approval of acquisitions— (1) Criteria. The Office,
in deciding whether to approve or deny an application filed on the basis
that it is a qualified stock issuance, shall apply the application
criteria set forth in §574.7(c) of this part, including the presumptive
disqualifiers set forth in §574.7(g) of this part.

(2) Additional capital commitments not required. The Office
shall not disapprove any application for the purchase of stock in
connection with a qualified stock issuance on the grounds that the
acquiring savings and loan holding company has failed to undertake to make
subsequent additional capital contributions to maintain the capital of the
undercapitalized savings association at or above the minimum level
required by the Office or any other Federal agency having
jurisdiction.

(3) Other conditions. The Office shall impose such conditions on
any approval of an application for the purchase of stock in connection
with a qualified stock issuance as the Office determines to be
appropriate, including—

(i) A requirement that any savings association subsidiary of the
acquiring savings and loan holding company limit dividends paid to such
holding company for such period of time as the Office may require; and

(ii) Such other conditions as the Office deems necessary or appropriate
to prevent evasions of this section, including, but not limited to,
requiring a rebuttal of control agreement in a form substantially similar
to that appearing at §574.100.

(4) Application deemed approved if not disapproved within 90 days.
An application for approval of a purchase of stock in connection with
a qualified stock issuance shall be deemed to have been approved by the
Office if such application has not been disapproved by the Office before
the end of the 90-day period beginning on the date such application has
been deemed sufficient under this part.

(d) No limitation on class of stock issued. The shares of stock
issued in connection with a qualified stock issuance may be shares of any
class.

(e) Application form. A savings and loan holding company making
application to acquire a qualified stock issuance pursuant to this §574.8,
shall use Form H-(e)2, as provided in §574.6(a)(3).

§ 574.100   Rebuttal of control
agreement.

top

Agreement

Rebuttal of Rebuttable Determination Of Control Under Part 574

I. WHEREAS

A. [  ] is the owner of [  ] shares (the “Shares”)
of the [  ] stock (the “Stock”) of [name and address of
association], which Shares represent [  ] percent of a class of
“voting stock” of [  ] as defined under the Acquisition of
Control Regulations (“Regulations”) of the Office of Thrift Supervision
(“Office”), 12 CFR part 574 (“Voting Stock”);

B. [  ] is a “savings association” within the meaning of the
Regulations;

C. [  ] seeks to acquire additional shares of stock of
[  ] (“Additional Shares”), such that [  ]'s ownership
thereof will exceed 10 percent of a class of Voting Stock but will not
exceed 25 percent of a class of Voting Stock of [  ]; [and/or]
[  ] seeks to [  ], which would constitute the
acquisition of a “control factor” as defined in the Regulations (“Control
Factor”);

D. [  ] does not seek to acquire the [Additional Shares or
Control Factor] for the purpose or effect of changing the control of
[  ] or in connection with or as a participant in any
transaction having such purpose or effect;

E. The Regulations require a company or a person who intends to hold 10
percent or more but not in excess of 25 percent of any class of Voting
Stock of a savings association or holding company thereof and that also
would possess any of the Control Factors specified in the Regulations, to
file and obtain approval of an application (“Application”) under the
Savings and Loan Holding Company Act (“Holding Company Act”), 12 U.S.C.
1467a, or file and obtain clearance of a notice (“Notice”) under the
Change in Control Act (“Control Act”), 12 U.S.C. 1817(j), prior to
acquiring such amount of stock and a Control Factor unless the rebuttable
determination of control has been rebutted.

F. Under the Regulations, [  ] would be determined to be in
control, subject to rebuttal, of [  ] upon acquisition of the
[Additional Shares or Control Factor];

G. [  ] has no intention to manage or control, directly or
indirectly, [  ];

H. [  ] has filed on [  ], a written statement
seeking to rebut the determination of control, attached hereto and
incorporated by reference herein, (this submission referred to as the
“Rebuttal”);

I. In order to rebut the rebuttable determination of contro1,
[  ] agrees to offer this Agreement as evidence that the
acquisition of the [Additional Shares or Control Factor] as proposed would
not constitute an acquisition of control under the Regulations.

II. The Office has determined, and hereby agrees, to act favorably on
the Rebuttal, and in consideration of such a determination and agreement
by the Office to act favorably on the Rebuttal, [ ] and any other
existing, resulting or successor entities of [ ] agree with the Office
that:

A. Unless [  ] shall have filed a Notice under the Control
Act, or an Application under the Holding Company Act, as appropriate, and
either shall have obtained approval of the Application or clearance of the
Notice in accordance with the Regulations, [ ] will not, except as
expressly permitted otherwise herein or pursuant to an amendment to this
Rebuttal Agreement:

1. Seek or accept representation of more than one member of the board
of directors of [insert name of association and any holding company
thereof];

2. Have or seek to have any representative serve as the chairman of the
board of directors, or chairman of an executive or similar committee of
[insert name of association and any holding company thereof]'s board of
directors or as president or chief executive officer of [insert name of
association and any holding company thereof];

3. Engage in any intercompany transaction with [  ] or
[  ]'s affiliates;

4. Propose a director in opposition to nominees proposed by the
management of [insert name of association and any holding company thereof]
for the board of directors of [insert name of association and any holding
company thereof] other than as permitted in paragraph A–1;

5. Solicit proxies or participate in any solicitation of proxies with
respect to any matter presented to the stockholders [  ] other
than in support of, or in opposition to, a solicitation conducted on
behalf of management of [  ];

6. Do any of the following, except as necessary solely in connection
with [  ]'s performance of duties as a member of
[  ]'s board of directors:

(a) Influence or attempt to influence in any respect the loan and
credit decisions or policies of [  ], the pricing of services,
any personnel decisions, the location of any offices, branching, the hours
of operation or similar activities of [  ];

(b) Influence or attempt to influence the dividend policies and
practices of [  ] or any decisions or policies of [  ]
as to the offering or exchange of any securities;

(c) Seek to amend, or otherwise take action to change, the bylaws,
articles of incorporation, or charter of [  ];

(d) Exercise, or attempt to exercise, directly or indirectly, control
or a controlling influence over the management, policies or business
operations of [  ]; or

(e) Seek or accept access to any non-public information concerning
[  ].

B. [  ] is not a party to any agreement with
[  ].

C. [  ]shallnotassist,aidorabetanyof[  ]'s
affiliates or associates that are not parties to this Agreement to act, or
act in concert with any person or company, in a manner which is
inconsistent with the terms hereof or which constitutes an attempt to
evade the requirements of this Agreement.

D. Any amendment to this Agreement shall only be proposed in connection
with an amended rebuttal filed by [  ] with the Office for its
determination;

E. Prior to acquisition of any shares of “Voting Stock” of
[  ] as defined in the Regulations in excess of the Additional
Shares,anyrequiredfilingwillbemadeby[  ] under the Control Act
or the Holding Company Act and either approval of the acquisition under
the Holding Company Act shall be obtained from the Office or any Notice
filed under the Control Act shall be cleared in accordance with the
Regulations;

F. At any time during which 10 percent or more of any class of Voting
Stock of [  ] is owned or controlled by [  ], no
action which is inconsistent with the provisions of this Agreement shall
be taken by [  ] until [  ] files and either obtains
from the Office a favorable determination with respect to either an
amended rebuttal, approval of an Application under the Holding Company
Act, or clearance of a Notice under the Control Act, in accordance with
the Regulations;

G.Whereanyamendedrebuttalfiledby[  ] is denied or
disapproved, [  ] shall take no action which is inconsistent
with the terms of this Agreement, except after either (1) reducing the
amount of shares of Voting Stock of [  ] owned or controlled by
[  ] to an amount under 10 percent of a class of Voting Stock,
or immediately ceasing any other actions that give rise to a conclusive or
rebuttable determination of control under the Regulations; or (2) filing a
Notice under the Control Act, or an Application under the Holding Company
Act, as appropriate, and either obtaining approval of the Application or
clearance of the Notice, in accordance with the Regulations;

H. Where any Application or Notice filed by [  ] is
disapproved, [  ] shall take no action which is inconsistent
with the terms of this Agreement, except after reducing the amount of
shares of Voting Stock of [  ] owned or controlled by
[  ] to an amount under 10 percent of any class of Voting Stock,
or immediately ceasing any other actions that give rise to a conclusive or
rebuttable determination of control under the Regulations;

I. Should circumstances beyond [  ]'s control result in
[  ] being placed in a position to direct the management or
policies of [  ], then [  ] shall either (1) promptly
file an Application under the Holding Company Act or a Notice under the
Control Act, as appropriate, and take no affirmative steps to enlarge that
control pending either a final determination with respect to the
Application or Notice, or (2) promptly reduce the amount of shares of
[  ] Voting Stock owned or controlled by [  ] to an
amount under 10 percent of any class of Voting Stock or immediately cease
any actions that give rise to a conclusive or rebuttable determination of
control under the Regulations;

J. By entering into this Agreement and by offering it for reliance in
reaching a decision on the request to rebut the presumption of control
under the Regulations, as long as 10 percent or more of any class of
Voting Stock of [  ] is owned or controlled, directly or
indirectly, by [  ], and [  ] possesses any Control
Factor as defined in the Regulations, [  ] will submit to the
jurisdiction of the Regulations, including (1) the filing of an amended
rebuttal or Application or Notice for any proposed action which is
prohibited by this Agreement, and (2) the provisions relating to a penalty
for any person who willfully violates or with reckless disregard for the
safety or soundness of a savings association participates in a violation
of the [Holding Company Act or Control Act] and the Regulations
thereunder, and any regulation or order issued by the Office.

K. Any violation of this Agreement shall be deemed to be a violation of
the [Holding Company Act or Control Act] and the Regulations, and shall be
subject to such remedies and procedures as are provided in the [Holding
Company Act or Control Act] and the Regulations for a violation thereunder
and in addition shall be subject to any such additional remedies and
procedures as are provided under any other applicable statutes or
regulations for a violation, willful or otherwise, of any agreement
entered into with the Office.

III. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which counterparts
collectively shall constitute one instrument representing the Agreement
among the parties thereto. It shall not be necessary that any one
counterpart be signed by all of the parties hereto as long as each of the
parties has signed at least one counterpart.

IV. This Agreement shall be interpreted in a manner consistent with the
provisions of the Rules and Regulations of the Office.

V. This Agreement shall terminate upon (i) the approval by the Office
of [  ]'s Application under the Holding Company Act or clearance
by the Office of [  ]'s Notice under the Control Act to acquire
[  ], and consummation of the transaction as described in such
Application or Notice, (ii) in the disposition by [  ] of a
sufficient number of shares of [  ], or (iii) the taking of such
other action that thereafter [  ] is not in control and would
not be determined to be in control of [  ] under the Control
Act, the Holding Company Act or the Regulations of the Office as in effect
at that time.

VI. IN WITNESS THEREOF, the parties thereto have executed this
Agreement by their duly authorized officer.
____________________

[Acquiror]

Office of Thrift
Supervision.
Date:____________________
By:____________________

[54 FR 49690, Nov. 30, 1989, as amended at 63 FR 71213, Dec. 24,
1998]

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