12 CFR § 1777.22 - Limitation on capital distributions.

---
identifier: "/us/cfr/t12/s1777.22"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "12 CFR § 1777.22 - Limitation on capital distributions."
title_number: 12
title_name: "Banks and Banking"
section_number: "1777.22"
section_name: "Limitation on capital distributions."
chapter_name: "OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT"
subchapter_number: "C"
subchapter_name: "SAFETY AND SOUNDNESS"
part_number: "1777"
part_name: "PROMPT CORRECTIVE ACTION"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
authority: "12 U.S.C. 1452(b)(2), 1456(c), 1718(c)(2), 1723a(k), 4513(a), 4513(b), 4514, 4517, 4611-4619, 4622, 4623, 4631, 4635."
regulatory_source: "67 FR 3598, Jan. 25, 2002, unless otherwise noted."
cfr_part: "1777"
---


# 1777.22 Limitation on capital distributions.

(a) *Capital distributions in general.* An Enterprise shall make no capital distribution that would decrease the total capital of the Enterprise to an amount less than the risk-based capital level or the core capital of the Enterprise to an amount less than the minimum capital level without the prior written approval of OFHEO.

(b) *Capital distributions by an Enterprise that is not adequately capitalized*—(1) *Prohibited distributions.* An Enterprise that is not classified as adequately capitalized shall make no capital distribution that would result in the Enterprise being classified into a lower capital classification than the one to which it is classified at the time of such distribution.

(2) *Restricted distributions.* An Enterprise classified as significantly or critically undercapitalized shall make no capital distribution without the prior written approval of OFHEO. OFHEO may grant a request for such a capital distribution only if OFHEO determines, in its discretion, that the distribution:

(i) Will enhance the ability of the Enterprise to meet the risk-based capital level and the minimum capital level promptly;

(ii) Will contribute to the long-term financial safety and soundness of the Enterprise; or

(iii) Is otherwise in the public interest.