AGENCY DISAPPROVAL OF DIRECTORS AND SENIOR EXECUTIVE OFFICERS OF CERTAIN DEPOSITORY INSTITUTIONS.

SEC. 914. AGENCY DISAPPROVAL OF DIRECTORS AND SENIOR EXECUTIVE OFFICERS OF CERTAIN DEPOSITORY INSTITUTIONS. (a) Depository Institution Insured By the FDIC.—The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended by adding after the section added by section 226 of this Act the following new section: “SEC. 32. AGENCY DISAPPROVAL OF DIRECTORS AND SENIOR EXECUTIVE OFFICERS OF INSURED DEPOSITORY INSTITUTIONS OR DEPOSITORY INSTITUTION HOLDING COMPANIES. “(a) Prior Notice Required.—An insured depository institution or depository institution holding company shall notify the appropriate Federal banking agency of the proposed addition of any individual to the board of directors or the employment of any individual as a senior executive officer of such institution or holding company at least 30 days before such addition or employment becomes effective, if the insured depository institution or depository institution holding company— “(1) has been chartered less than 2 years in the case of an insured depository institution; “(2) has undergone a change in control within the preceding 2 years; or “(3) is not in compliance with the minimum capital requirement applicable to such institution or is otherwise in a troubled condition, as determined by such agency on the basis of such institution’s or holding company’s most recent report of condition or report of examination or inspection. “(b) Disapproval by Agency.—An insured depository institution or depository institution holding company may not add any individual to the board of directors or employ any individual as a senior executive officer if the appropriate Federal banking agency issues a notice of disapproval of such addition or employment before the end of the 30-day period beginning on the date the agency receives notice of the proposed action pursuant to subsection (a). “(c) Exception in Extraordinary Circumstances.— 103 STAT. 485 “(1) In general.—Each appropriate Federal banking agency may prescribe by regulation conditions under which the prior notice requirement of subsection (a) may be waived in the event of extraordinary circumstances. “(2) No effect on disapproval authority of agency.—Such waivers shall not affect the authority of each agency to issue notices of disapproval of such additions or employment of such individuals within 30 days after each such waiver. “(d) Additional Information.—Any notice submitted to an appropriate Federal banking agency with respect to an individual by any insured depository institution or depository institution holding company pursuant to subsection (a) shall include— “(1) the information described in section 7(j)(6)(A) about the individual; and “(2) such other information as the agency may prescribe by regulation. “(e) Standard for Disapproval.—The appropriate Federal banking agency shall issue a notice of disapproval with respect to a notice submitted pursuant to subsection (a) if the competence, experience, character, or integrity of the individual with respect to whom such notice is submitted indicates that it would not be in the best interests of the depositors of the depository institution or in the best interests of the public to permit the individual to be employed by, or associated with, the depository institution or depository institution holding company. “(f) Definition Regulations.—Each appropriate Federal banking agency shall prescribe by regulation a definition for the terms ‘troubled condition’ and ’senior executive officer’ for purposes of subsection (a).”. (b) Credit Unions Insured by the NCUA.—Title II of the Federal Credit Union Insurance Act (12 U.S.C. 1781 et seq.) is amended by adding at the end thereof the following new section: “SEC. 212. BOARD DISAPPROVAL OF DIRECTORS, COMMITTEE MEMBERS, AND SENIOR EXECUTIVE OFFICERS OF INSURED CREDIT UNIONS. “(a) Prior Notice Required.—An insured credit union shall notify the Board of the proposed addition of any individual to the board of directors or committee or the employment of any individual as a senior executive officer of such credit union at least 30 days before such addition or employment becomes effective, if the insured credit union— “(1) has been chartered less than 2 years; or “(2) is in troubled condition, as determined on the basis of such credit union’s most recent report of condition or report of examination. “(b) Disapproval by the Board.—An insured credit union may not add any individual to the board of directors or employ any individual as a senior executive officer if the Board issues a notice of disapproval of such addition or employment before the end of the 30-day period beginning on the date the agency receives notice of the proposed action pursuant to subsection (a). “(c) Exception in Extraordinary Circumstances.— “(1) In general.—The Board may prescribe by regulation conditions under which the prior notice requirement of subsection (a) may be waived in the event of extraordinary circumstances. 103 STAT. 486 “(2) No effect on disapproval authority of board.—Such waivers shall not affect the authority of the Board to issue notices of disapproval of such additions or employment of such individuals within 30 days after each such waiver. “(d) Additional Information.—Any notice submitted to the Board by any insured credit union pursuant to subsection (a) shall include— “(1) the information described in section 7(j)(6)(A) of the Federal Deposit Insurance Act about the individual; and “(2) such other information as the Board may prescribe by regulation. “(e) Standard for Disapproval.—The Board shall issue a notice of disapproval with respect to a notice submitted pursuant to subsection (a) if the competence, experience, character, or integrity of the individual with respect to whom such notice is submitted indicates that it would not be in the best interests of the depositors of the insured credit union or in the best interests of the public to permit the individual to be employed by, or associated with, such insured credit union. “(f) Definition Regulations.—The Board shall prescribe by regulation a definition for the terms ‘troubled condition’ and ‘senior executive officer’ for purposes of subsection (a).”.