12 U.S.C. § 225

CRITERIA FOR APPROVAL OF PLAN OF ACTION.

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“(a)Plan of Action Involving Termination of Low Income Affordability Restrictions.—The Secretary may approve a plan of action that involves termination of the low income affordability restrictions only upon a written finding that—“(1) implementation of the plan of action will not materially increase economic hardship for current tenants (and will not in any event result in (A) a monthly rental payment by a current tenant that exceeds 30 percent of the monthly adjusted income of the tenant or an increase in the monthly rental payment in any year that exceeds 10 percent (whichever is lower), or (B) in the case of a current tenant who already pays more than such percentage, an increase in the monthly rental payment in any year that exceeds the increase in the Consumer Price Index or 10 percent (whichever is lower)) or involuntarily displace current tenants (except for good cause) where comparable and affordable housing is not readily available, determined without regard to the availability of Federal housing assistance that would address any such hardship or involuntary displacement; and“(2)(A) the supply of vacant, comparable housing is sufficient to ensure that such prepayment will not materially affect—“(i) the availability of decent, safe, and sanitary housing affordable to lower income and very low-income families or persons in the area that the housing could reasonably be expected to serve;“(ii) the ability of lower income and very low-income families or persons to find affordable, decent, safe, and sanitary housing near employment opportunities; or“(iii) the housing opportunities of minorities in the community within which the housing is located; or“(B) the plan has been approved by the appropriate State agency and any appropriate local government agency for the jurisdiction within which the housing is located as being in accordance with a State strategy approved by the Secretary under section 226.“(b)Plan of Action Including Incentives.—The Secretary may approve a plan of action that includes incentives only upon finding that—“(1) the package of incentives is necessary to provide a fair return on the investment of the owner;“(2) due diligence has been given to ensuring that the package of incentives is, for the Federal Government, the least costly alternative that is consistent with the full achievement of the purposes of this title; and“(3) binding commitments have been made to ensure that—“(A) the housing will be retained as housing affordable for very low-income families or persons, lower income families or persons, and moderate income families or persons for the remaining term of the mortgage;“(B) throughout such period, adequate expenditures will be made for maintenance and operation of the housing;“(C) current tenants shall not be involuntarily displaced (except for good cause);“(D) any increase in rent contributions for current tenants shall be to a level that does not exceed 30 percent of the adjusted income of the tenant or the fair market rent for comparable housing under section 8(b) of the United States Housing Act of 1937 [42 U.S.C. 1437f(b)], whichever is lower;“(E)(i) any resulting increase in rents for current tenants (except for increases made necessary by increased operating costs)—“(I) shall be phased in equally over a period of not less than 3 years, if such increase is 30 percent or more; and“(II) shall be limited to not more than 10 percent per year if such increase is more than 10 percent but less than 30 percent; and“(ii) assistance under section 8 of the United States Housing Act of 1937 shall be provided if necessary to mitigate any adverse affect on current income eligible tenants; and“(F)(i) rents for units becoming available to new tenants shall be at levels approved by the Secretary that will ensure, to the extent practicable, that the units will be available and affordable to the same proportions of very low-income families or persons, lower income families or persons, and moderate income families or persons (including families or persons whose incomes are 95 percent or more of area median income) as resided in the housing as of January 1, 1987 (based on the area median income limits established by the Secretary in February, 1987), or the date the plan of action is approved, whichever date results in the highest proportion of very low-income families, except that this limitation shall not prohibit a higher proportion of very low-income families from occupying the housing; and“(ii) in approving rents under this paragraph, the Secretary shall take into account any additional incentives provided under this subtitle and shall make provision for such annual rent adjustments as may be made necessary by future reasonable increases in operating costs.“(c)Section 8 Rental Assistance.—When providing rental assistance under section 8 [of the United States Housing Act of 1937, 42 U.S.C. 1437f], the Secretary may enter into a contract with an owner, contingent upon the future availability of appropriations for the purpose of renewing expiring contracts for rental assistance as provided in appropriations Acts, to extend the term of such rental assistance for such additional period or periods as is necessary to carry out an approved plan of action. The contract and the approved plan of action shall provide that, if the Secretary is unable to extend the term of such rental assistance or is unable to develop a revised package of incentives providing benefits to the owner comparable to those received under the original approved plan of action, the Secretary, upon the request of the owner, shall take the following actions (subject to the limitations under the following paragraphs):—“(1) Modification of the binding commitments made pursuant to subsection (b) that are dependent on such rental assistance.“(2) If action under paragraph (1) is not feasible, release of an owner from the binding commitments made pursuant to subsection (b) that are dependent on such rental assistance.“(3) If action under paragraphs (1) and (2) would, in the determination of the Secretary, result in the default of the insured loan, approval of the revised plan of action, notwithstanding subsection (a), that involves the termination of low-income affordability restrictions.At least 30 days prior to making a request under the preceding sentence, an owner shall notify the Secretary of the owner’s intention to submit the request. The Secretary shall have a period of 90 days following receipt of such notice to take action to extend the rental assistance contract and to continue the binding commitments under subsection (b).“(d)Relocation of Displaced Tenants.—Any plan of action shall specify actions that the Secretary and the owner shall take to ensure that any tenants, displaced as a result of a plan of action approved under subsection (a) or as a result of modifications taken pursuant to subsection (c), are relocated to affordable housing.

Notes of Decisions

Cited in 2 cases (1 in the last 5 years), 2020–2022 · leading case: Consumer Financial Protection Bureau v. All American Check Cashing, Inc.

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Consumer Financial Protection Bureau v. All American Check Cashing, Inc. (2022) mssd “” 12 U.S.C. § 225 (a). The Federal Deposit Insurance Corporation, as its name connotes, insures bank deposits and, relatedly, examines the banks whose deposits it insures.”

United States v. $3.072,266.59 in United States Currency (2020) prd “) (last visited July 9, 2020); see 12 U.S.C. § 225 . The Federal Reserve Wire Transfer Network (“Fedwire”) is a financial service offered by the Federal Reserve Bank, “a nationwide electronic network linking approximately 7,000 depository financial institutions (banks)…”

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