PUBLIC LAW 103-325—SEPT. 23, 1994 108 STAT. 2201 SEC. 208. INSURED DEPOSITORY INSTITUTION CAPITAL REQUIRE- 12 USC 1835. MENTS FOR TRANSFERS OF SMALL BUSINESS OBLIGA- TIONS. (a) ACCOUNTING PRINCIPLES.— The accounting principles applicable to the transfer of a small business loan or a lease of personal property with recourse contained in reports or statements required to be filed with Federal banking agencies by a qualified insured depository institution shall be consistent with generally accepted accounting principles. (b) CAPITAL AND RESERVE REQUIREMENTS. — With respect to the transfer of a small business loan or lease of personal property with recourse that is a sale under generally accepted accounting principles, each qualified insured depository institution shall— (1) establish and maintain a reserve equal to an amount sufficient to meet the reasonable estimated liability of the institution under the recourse arrangement; and (2) include, for purposes of applicable capital standards and other capital measures, only the amount of the retained recourse in the risk-weighted assets of the institution. (c) QUALIFIED INSTITUTIONS CRITERIA. — An insured depository institution is a qualified insured depository institution for purposes of this section if, without regard to the accounting principles or capital requirements referred to in subsections (a) and (b), the institution is— (1) well capitalized; or (2) with the approval, by regulation or order, of the appropriate Federal banking agency, adequately capitalized. (d) AGGREGATE AMOUNT OF RECOURSE. —The total outstanding amount of recourse retained by a qualified insured depository institution with respect to transfers of small business loans and leases of personal property under subsections (a) and (b) shall not exceed— (1) 15 percent of the risk-based capital of the institution; or (2) such greater amount, as established by the appropriate Federal banking agency by regulation or order. (e) INSTITUTIONS THAT CEASE TO BE QUALIFIED OR EXCEED AGGREGATE LIMITS.—If an insured depository institution ceases to be a qualified insured depository institution or exceeds the limits under subsection (d), this section shall remain applicable to any transfers of small business loans or leases of personal property that occurred during the time that the institution was qualified and did not exceed such limit. (f) PROMPT CORRECTIVE ACTION NOT AFFECTED.— The capital of an insured depository institution shall be computed without regard to this section in determining whether the institution is adequately capitalized, undercapitalized, significantly undercapitalized, or critically undercapitalized under section 38 of the Federal Deposit Insurance Act. (g) REGULATIONS REQUIRED.— Not later than 180 days after the date of enactment of this Act each appropriate Federal banking agency shall promulgate final regulations implementing this section. (h) ALTERNATIVE SYSTEM PERMITTED.— (1) IN GENERAL.—At the discretion of the appropriate Federal banking agency, this section shall not apply if the regulations of the agency provide that the aggregate amount of capital and reserves required with respect to the transfer of small
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