CAPITAL CLASSIFICATIONS.

SEC. 1364. CAPITAL CLASSIFICATIONS. (a) In general.—For purposes of this subtitle, the Director shall classify the enterprises according to the following capital classifications: (1) Adequately capitalized.— An enterprise shall be classified as adequately capitalized if the enterprise— 106 STAT. 3977 (A) maintains an amount of total capital that is equal to or exceeds the risk-based capital level established for the enterprise under section 1361; and (B) maintains an amount of core capital that is equal to or exceeds the minimum capital level established for the enterprise under section 1362. (2) Undercapitalized.— An enterprise shall be classified as undercapitalized if— (A) the enterprise— (i) does not maintain an amount of total capital that is equal to or exceeds the risk-based capital level established for the enterprise; and (ii) maintains an amount of core capital that is equal to or exceeds the minimum capital level established for the enterprise; or (B) the enterprise is otherwise classified as undercapitalized under subsection (b)(1) of this section. (3) Significantly undercapitalized.—An enterprise shall be classified as significantly undercapitalized if— (A) the enterprise— (i) does not maintain an amount of total capital that is equal to or exceeds the risk-based capital level established for the enterprise; (ii) does not maintain an amount of core capital that is equal to or exceeds the minimum capital level established for the enterprise; and (iii) maintains an amount of core capital that is equal to or exceeds the critical capital level established for the enterprise under section 1363; or (B) the enterprise is otherwise classified as significantly undercapitalized under subsection (b)(2) of this section or section 1365(b). (4) Critically undercapitalized.— An enterprise shall be classified as critically undercapitalized if— (A) the enterprise— (i) does not maintain an amount of total capital that is equal to or exceeds the risk-based capital level established for the enterprise; and (ii) does not maintain an amount of core capital that is equal to or exceeds the critical capital level for the enterprise; or (B) is otherwise classified as critically undercapitalized under subsection (b)(3) of this section or section 1366(b)(5). (b) Discretionary Classification.—If at any time the Director determines in writing that an enterprise is engaging in conduct not approved by the Director that could result in a rapid depletion of core capital or that the value of the property subject to mortgages held or securitized by the enterprise has decreased significantly, the Director may classify the enterprise— (1) as undercapitalized, if the enterprise is otherwise classified as adequately capitalized; (2) as significantly undercapitalized, if the enterprise is otherwise classified as undercapitalized; and (3) as critically undercapitalized, if the enterprise is other-wise classified as significantly undercapitalized. (c) Quarterly Determination.—The Director shall determine the capital classification of the enterprises for purposes of this 106 STAT. 3978 subtitle on not lees than a quarterly basis (and as appropriate under subsection (b)). The first such determination shall be made during the 3-month period beginning on the appointment of the Director. (d) Implementation.—Notwithstanding any other provision of this section, during the period beginning on the date of the enactment of this Act and ending upon the effective date of section 1365 (as provided in section 1365(c)), an enterprise shall be classified as adequately capitalized if the enterprise maintains an amount of core capital that is equal to or exceeds the minimum capital level for the enterprise under section 1362.