Hon. Michael G. Oxley: “In adopting this provision, it is our intention that the regulatory agencies utilize section 702 with care and…”

“In adopting this provision, it is our intention that the regulatory agencies utilize section 702 with care and precision. Specifically, it is not intended to be used routinely in corporate applications, notices or requests to impose financial or other conditions on bank directors or officers that contain a personal guarantee against loss by the institution. For example, it is not intended to be used by the regulatory agencies to routinely require directors or officers of insured depository institutions to enter into capital maintenance agreements with the agencies as a condition of granting a charter or providing deposit insurance. It is also not intended to be used by the regulators to routinely require bank directors or officers to maintain the capital of a troubled insured depository institution without the directors or officers agreement. While we believe it is important that banking agencies are able to enforce agreements that protect the deposit insurance fund, we also believe that our national banking policies should encourage the participation of highly qualified people on the boards of those institutions.”