PUBLIC LAW 105-219—AUG. 7, 1998 112 STAT. 925 "(aa) fails to submit an acceptable net worth restoration plan within the time allowed under subsection (f); or "(bb) materially fails to implement a net worth restoration plan accepted by the Board. "(E) CRITICALLY UNDERCAPITALIZED.— An insured credit union is 'critically undercapitalized' if it has a net worth ratio of less than 2 percent (or such higher net worth ratio, not to exceed 3 percent, as the Board may specify by regulation). "(2) ADJUSTING NET WORTH LEVELS. — "(A) IN GENERAL. —I f, for purposes of section 38(c) of the Federal Deposit Insurance Act, the Federal banking agencies increase or decrease the required minimum level for the leverage limit (as those terms are used in section t 38), the Board may, by regulation, and subject to subparagraph (B) of this paragraph, correspondingly increase or decrease 1 or more of the net worth ratios specified in subparagraphs (A) through (D) of paragraph (1) of this subsection in an amount that is equal to not more than the difference between the required minimum level most recently established by the Federal banking agencies and 4 percent of total assets (with respect to institutions regulated by those agencies). "(B) DETERMINATIONS REQUIRED. —The Board may increase or decrease net worth ratios under subparagraph (A) only if the Board— "(i) determines, in consultation with the Federal banking agencies, that the reason for the increase or decrease in the required minimum level for the leverage limit also justifies the adjustment in net worth ratios; and "(ii) determines that the resulting net worth ratios are sufficient to carry out the purpose of this section. "(C) TRANSITION PERIOD REQUIRED. — If the Board increases any net worth ratio under this paragraph, the Board shall give insured credit unions a reasonable period of time to meet the increased ratio. " (d) RISK-BASED NET WORTH REQUIREMENT FOR COMPLEX CREDIT UNIONS. — "(1) IN GENERAL. — The regulations required under subsection (b)(1) shall include a risk-based net worth requirement for insured credit unions that are complex, as defined by the Board based on the portfolios of assets and liabilities of credit unions. "(2) STANDARD.—The Board shall design the risk-based net worth requirement to take account of any material risks against which the net worth ratio required for an insured credit union to be adequately capitalized may not provide adequate protection. " (e) EARNINGS-RETENTION REQUIREMENT APPLICABLE TO CREDIT UNIONS THAT ARE NOT WELL CAPITALIZED.— "(1) IN GENERAL.—An insured credit union that is not well capitalized shall annually set aside as net worth an amount equal to not less than 0.4 percent of its total assets. "(2) BOARD'S AUTHORITY TO DECREASE EARNINGS-RETENTION REQUIREMENT.—
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