Richard Shelby: “Section 702 of the Financial Services Regulatory Relief Act of 2006 clarifies that written conditions in applications…”

“Section 702 of the Financial Services Regulatory Relief Act of 2006 clarifies that written conditions in applications and written agreements with institution-affiliated parties are enforceable in order to protect the safety and soundness of insured depository institutions. Institution affiliated parties can include bank directors, officers and principal shareholders. This provision was included at the request of the regulatory agencies, and we have heard some concerns that the regulatory agencies may use this language to require personal guarantees from bank directors and officers in inappropriate circumstances.”