poration pursuant to any of the foregoing provisions of this section shall be furnished to the institution, affiliate, or service corporation, as appropriate within a reasonable time, not to exceed 90 days, following the completion of such appraisals and the filing of a report thereof by the appraiser, or appraisers, with such Chief Examiner.

(2) The Corporation may obtain at any time, at its expense, such appraisals of any of the assets, including the security therefor, of an insured institution, affiliate, or service corporation as the Corporation deems appropriate.

(c) Establishment and maintenance of records. To enable the Corporation to examine insured institutions and affiliates, and audit insured institutions, affiliates, and service corporations, pursuant to the provisions of paragraph (a) of this section, each insured institution, affiliate and service corporation thereof shall establish and maintain such accounting and other records as will provide an accurate and complete record of all business transacted by it, and the documents, files and other material or property comprising said records shall at all times be available for such examination and audit, wherever any of said records, documents, files, material or property may be. Without any limitation on the generality of the foregoing sentence and without modification of any other requirement with respect to the establishment and maintenance of records to which such institution is subject, each insured institution shall establish and maintain the following records:

(1) Records with respect to loans on the security of real estate. The records of an insured institution with respect to each loan which such institution makes on the security of real estate shall include:

(i) An application for the loan, signed by the applicant borrower or his agent, in such form and containing such information as will disclose the purpose for which the loan is sought (construction, purchase, refinancing, other) and the identity of the security property;

(ii) If any such loan is made for the purpose of financing the purchase of the real estate security for the loan, a signed statement by the borrower or his agent, as a part of or as an attachment to the application for the loan, disclosing the price at which such real estate security is being purchased by the borrower;

(iii) One or more written appraisal reports, prepared and signed, prior to the approval of such application, by a person or persons duly appointed and qualified as appraiser or appraisers by the board of directors of such institution, disclosing the market value of the security offered by the applicant and containing sufficient information and data concerning the appraised property to substantiate the market value of the security described in such report; or if such loan is an insured loan or a guaranteed loan, a certification of the valuation assigned to the real estate security by the appraiser accepted by the insuring or guaranteeing agency and furnished to the institution by such agency;

(iv) A financial statement of the arplicant signed by such applicant or a written credit report prepared by such institution, or by others at the special instance and request of such institution, disclosing the financial ability of the applicant;

(v) Documentation showing when and by whom such loan was approved and the terms and conditions of such approval;

(vi) Documentation showing the date, amount, purpose, and recipient of every disbursement of the proceeds of such loan, whether such disbursements are made directly by such institution or through escrows or other persons or concerns;

(vii) An opinion signed by such institution's attorney-at-law, a title insurance policy, or other documentary evidence customarily used in the jurisdiction in which such real estate security is located, affirming the quality and validity of such institution's lien on the real estate security for such loan: Provided, however, That such documentary evidence shall not be required with respect to any loan having Federal Housing Administration mortgage insurance as to which §§ 203.390 and 230.402 of the Federal Housing Administration Regulations (24 CFR 203.390 and 24 CFR 230.402) are applicable, and any such loan may be considered to be secured by a first lien without new title evidence.

(viii) Documentation showing that such institution, upon the closing of the loan, furnished to the borrower a loan settlement statement setting forth in detail the charges or fees such borrower has paid or obligated himself to pay to such institution or to any other concern or person in connection with such loan,

which documentation shall include a copy of such loan settlement statement;

(ix) A record showing the status of taxes, assessments, insurance premiums, and other charges on the security for such loan;

(x) Documentation covering all modifications of the original mortgage contract, showing appropriate approval of each such modification; and

(xi) Documentation covering all releases of any portion of the collateral supporting the loan, showing the part of the premises involved, the consideration, if any, to such institution, and a record of appropriate approval of each such release.

(2) Records with respect to property purchased subject to, or with assumption by a third party of, an institution's loan. When a property on which an insured institution has a lien securing an unpaid loan is sold to a third party and a release of the original borrower from such indebtedness is given by an insured institution, the records of such institution shall contain such documentation and records, with respect to such third party and such transaction, as are required by subdivisions (ii) (iv), (v), (x) and (xi) of subparagraph (1) of this paragraph.

(3) Records with respect to loans sold. The records of an insured institution with respect to each sale of loans by it, whether such loans are sold in whole or in part, shall include a signed opinion by such institution's attorney-at-law stating whether or not such sale is without recourse.

(4) Records with respect to the acquisition of mortgaged security. Each insured institution shall maintain a record which discloses every instance where such institution commences action to acquire the real estate security for a loan, by foreclosure or otherwise, and the ultimate disposition of such action; such record shall include identification of such real estate security and loan, shall itemize all fees and charges incurred in such action, shall name the recipient or recipients to whom any such fees and charges were paid, and shall show who acquired title to such real estate as a result of such action.

(5) Records with respect to insured accounts. The records of an insured institution with respect to each withdrawable or repurchasable share, investment certificate, deposit, or savings account issued by such institution shall include

the signature of the owner of such account or his duly authorized representative, together with a record reflecting the balance in such account.

(6) Other records. Each insured institution and service corporation thereof shall establish and maintain such other records as are required by statute or by any other regulation to which such institution or service corporation is subject.

(d) Change in location of records. An insured institution shall not transfer the location of any of its general accounting or control records from its home office to a branch or service office, or from a branch or service office to its home office or to another branch or service office unless the institution has sent prior written notice of such transfer to the Chief Examiner of the Federal Home Loan Bank district in which the home office of the institution is located.

(e) Use of data processing services for maintenance of records. An insured institution which determines to maintain any of its records by means of data processing services shall so notify the Chief Examiner of the Federal Home Loan Bank district in which the home office of such insured institution is located, in writing, at least 90 days prior to the date on which such maintenance of records will begin. Such notification shall include identification of the records to be maintained by data processing services and a statement as to the location at which such records will be maintained. Any contract, agreement, or arrangement made by an insured institution pursuant to which data processing services are to be performed for such insured institution shall be in writing and shall expressly provide that the records to be maintained by such services shall at all time be available for examination and audit.

[28 F.R. 3473, Apr. 10, 1963, as amended at 33 FR 2707, Feb. 8, 1968; 35 FR 3107, Feb. 18, 1970; 35 FR 18506, Dec. 5, 1970; 38 FR 26110, Sept. 18, 1973]

§ 563.17-2 Re-evaluation of assets; adjustment of book value; adjustment charges.

(a) By insured institutions. An insured institution shall appraise each parcel of real estate owned which is or becomes a scheduled item, except that the foregoing requirement shall not apply to any parcel of real estate that is sold and reacquired less than 12 months subsequent to the most recent appraisal

made pursuant to this sentence. A dated, signed copy of each report of appraisal made pursuant to any provision of this paragraph shall be retained in the institution's records.

(b) By examiners. In connection with each examination of an insured institution or service corporation, the Board's examiner shall make such re-evaluation of such institution's or service corporation's assets (exclusive of insured or guaranteed loans) as he deems advisable or necessary. Any such re-evaluation of real estate shall be based on an appraisal as provided by § 563.17-1, except that reevaluation of parcels of real estate that are similar in all essential respects may be based on an appraisal of one or more of such parcels.

(c) Adjustment of book value. If the re-evaluation of assets, pursuant to paragraph (b) of this section, or otherwise as ordered by the Corporation, discloses that any asset of an insured institution or service corporation is over-valued on its books (exclusive of over-valuation due to fluctuations in value which are caused by changes in market interest rates), such institution or service corporation shall, at the direction of the Supervisory Agent, make an adjustment of the book value of such asset; unless otherwise directed by the Supervisory Agent, such institution shall make such adjustment by establishing and maintaining a specific reserve in an amount equal to the over-valuation.

(d) Adjustment charges. Adjustment of the book value of an asset by an insured institution or service corporation pursuant to any provision of this section may be made by charge against such institution's or service corporation's earnings for the period in which such charge is made, or against surplus, undivided profits, or reserves established for the sole purpose of absorbing losses. Any recovery of any portion of any amount previously charged against reserves established for the sole purpose of absorbing losses shall be credited to such reserves; such credit shall be in addition to all other required credits to such reserves. Any recovery of any portion of any amount previously charged against earnings shall be credited to earnings for the period in which such recovery is effected. For the purposes of this paragraph (d), any charge against a specific reserve established pursuant to any provision of this section shall be deemed to be a recovery on an asset the book

value of which was previously adjusted unless such charge is made for the purpose of concurrently writing down the book value of such asset.

[30 FR 14195, Nov. 11, 1965, as amended at 38 FR 26111, Sept. 18, 1973]

§ 563.18 Reports to the Corporation.

(a) Periodic reports. Each insured institution and service corporation thereof shall make such periodic or other reports of its affairs in such manner and on such forms as the Corporation may prescribe. The Corporation may provide that reports filed by the insured institutions or service corporations to meet the requirements of other regulations also satisfy requirements imposed under this section.

(b) Reports of loss. Whenever an insured institution or service corporation thereof suffers a loss due to dishonesty of a director, officer, attorney, agent, or employee, whether or not repaid or recovered, or whenever a deductible amount specified in a bond is increased above the permissible deductible amount specified in the table in paragraph (b) of § 563.19, such insured institution or service corporation shall report promptly the facts concerning such loss or increase in writing to the Board's Chief Examiner for the Federal Home Loan Bank district in which the home office of such institution is located.

[38 FR 26111, Sept. 18, 1973] § 563.18-1

Reports of change in control; other reports; form and filing of such reports.

(a) Reports of change in control(1) When reports are required. Reports are required under this paragraph (a) whenever any change occurs in the control (as defined in paragraph (b) of this section) of an insured institution and no report is required under such paragraph (b) of this section. Reports shall be made to the Corporation by the president or other chief executive officer of the institution involved within 15 days after he obtains knowledge of such change. If there is any doubt as to whether a change in control has occurred, such doubt shall be resolved in favor of reporting to the Corporation.

(2) Contents of reports. Reports of change in the control of an insured institution, as required under this paragraph (a), shall contain the following information to the extent that such information is known by the person making the report:

(i) The name or names of the person or persons who acquired such control;

(ii) The basis of such control; and (iii) The date and a description of the transaction or transactions by which such control was acquired.

(b) Reports of changes in voting stock or voting rights-(1) When reports are required. Reports are required under this paragraph (b) whenever a change occurs in the outstanding voting stock or voting rights of an insured institution resulting in control or a change in the control of such institution. As used in this section, the term "control" means the power, directly or indirectly, to direct or cause the direction of the management or policies of the institution. Without any limitation on the foregoing, there shall be deemed to be a change resulting in control or a change in the control of an insured institution, so as to require the making of a report:

(1) Whenever any person, partnership, corporation, trust or group of associated persons acquires, receives, or becomes the holder of

(a) Ten percent or more of the outstanding shares of any class of the voting stock of the institution or of the voting rights thereto; or

(b) Ten percent or more of the outstanding voting rights of the institution;

or

(i) whenever there is any appointment, designation or substitution of a holder or holders of 10 percent or more of the outstanding voting rights of the institution.

Reports shall be made to the Corporation by the president or other chief executive officer of the institution involved within 15 days after he obtains knowledge of such change. If there is any doubt as to whether such a change has resulted in control or a change in control, such doubt shall be resolved in favor of reporting to the Corporation.

(2) Contents of reports—(1) General. The reports required under this paragraph (b) shall contain the items of information set forth below to the extent that such information is known by the person making the report. In addition, such reports shall contain such other information as may be available to inform the Corporation of the effect of the transaction upon control of the institution.

(ii) Reports of changes in voting stock or voting rights with respect to such stock. Reports of changes in ownership of voting stock or holdings of voting

rights with respect to such stock, resulting in control or a change in the control of an insured institution, shall contain the following information:

(a) The number of shares of each class of voting stock and the number of voting rights with respect thereto involved in the transaction;

(b) The names of the purchasers (or transferees) of such stock or such voting rights;

(c) The names of the sellers (or transferors) of such stock or voting rights;

(d) The amount of consideration received by the sellers (or transferors) in connection with the transaction;

(e) The names of the beneficial owners if the shares or voting rights are of record in another name or other names;

(f) The total number of shares of each class of voting stock owned by the sellers (or transferors), the purchasers (or transferees), and the beneficial owners both immediately before and after the transaction;

(g) The total number of shares of each class of voting stock outstanding both immediately before and after the transaction;

(h) The total number of voting rights (with respect to voting stock) held by the sellers (or transferors), the purchasers (or transferees), and the beneficial owners both immediately before and after the transaction;

(i) The total number of such voting rights outstanding both immediately before and after the transaction; and

(j) In the case of any appointment, designation, or substitution of a holder or holders of such voting rights, the name or names of the holder or holders both immediately before and after the transaction.

(iii) Reports of changes in voting rights with respect to withdrawable accounts. Reports of changes in holdings of voting rights with respect to withdrawable accounts, resulting in control or a change in the control of an insured institution, shall contain the following information:

(a) In the case of a transfer or transfers of such voting rights from one holder or group of holders to another holder or group of holders;

(1) The date of each such transfer: and

(2) The name or names of the acquiring holder or holders and of the transferor or transferors (unless such transferors are the original owners of the

accounts to which such voting rights attach);

(b) In the case of any appointment, designation, or substitution of a holder or holders of voting rights, with respect to a holder or group of holders already having control:

(1) The date of such appointment, designation or substitution; and

(2) The names of each of the holders both immediately before and after such change; and

(c) In the case of any other acquisition of or change in control (without regard to the number of voting rights involved):

(1) The name or names of the person or persons acquiring such control;

(2) The basis of such control; and (3) The date and a description of such acquisition or change.

(c) Reports of change in chief executive officer or director—(1) When reports are required. Reports are required under this paragraph (c) whenever a change resulting in control or a change in the control of an insured institution has occurred and the chief executive officer or any director of the institution has been changed or replaced concurrently with or within 60 days prior to or within the 12-month period next succeeding such change in control. Reports shall be made to the Corporation by the president or other chief executive officer of the institution within 15 days after the effective date of any such change or replacement of the chief executive officer or of a director, or within 15 days after the officer making the report obtains knowledge of any such change in control, whichever occurs last.

(2) Contents of reports. The reports required under this paragraph (c) shall set forth the name of the new chief executive officer or director and the date on which his appointment or election became effective and shall include a statement of his past and current business and professional affiliations.

(d) Reports of solicitation of voting rights (1) When reports are required. Reports are required under this paragraph (d) whenever any person, partnership, corporation, trust, or group of associated persons

(i) Solicits voting rights with respect to 10 percent or more of the outstanding shares of any class of voting stock of an insured institution;

(ii) Solicits 10 percent or more of the outstanding voting rights in an insured institution; or

(iii) Solicits any voting rights in an insured institution when such solicitor already holds either:

(a) Voting rights with respect to 10 percent or more of the outstanding shares of any class of the voting stock of such institution; or

(b) Ten percent or more of the outstanding voting rights in such institution. Reports shall be made to the Corporation by the president or other chief executive officer of the institution involved within 15 days after he obtains knowledge of such solicitation. If there is any doubt as to whether such a solicitation has occurred, such doubt shall be resolved in favor of reporting to the Corporation.

(2) Contents of reports-(i) General. The reports required under this paragraph (d) shall contain the items of information set forth below to the extent that such information is known by the person making the report. In addition, such reports shall contain such other information as may be available to inform the Corporation of the possible impact of the solicitation upon control of the institution.

(ii) Voting rights with respect to stock. Reports of solicitation of voting rights with respect to any class of voting stock of an insured institution shall contain the following information:

(a) The name or names of the person or persons making the solicitation;

(b) The extent of such solicitation (including relevant dates) and the class or classes of such voting stock with respect to which the solicitation of voting rights is made;

(c) The number of shares of such class or classes of voting stock which the solicitor already owns and the total number of voting rights with respect thereto which he holds at the time of such solicitation; and

(d) The total number of shares of such class or classes of voting stock outstanding at the time of such solicitation.

(iii) Voting rights with respect to withdrawable accounts. Reports of solicitation of voting rights with respect to withdrawable accounts of an insured institution shall contain the following information:

(a) The name or names of the person or persons making the solicitation; (b) The extent of such solicitation (including relevant dates); and

(c) The approximate percentage of the outstanding voting rights which the solicitor already holds at the time of such solicitation.

(e) Reports of loans secured by voting stock-(1) When reports are required. Reports are required under this