Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 69

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1
Chunk 69
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 policy not to make predatory loans and
to determine borrowers’ ability to repay, these laws and related rules create the potential for increased liability with respect
to our lending and loan investment activities. They increase our cost of doing business and, ultimately, may prevent us from making certain
loans and cause us to reduce the average percentage rate or the points and fees on loans that we do make.

We
are subject to federal and state fair lending laws, and failure to comply with these laws could lead to material penalties.

Federal and state fair
lending laws and regulations, such as the Equal Credit Opportunity Act and the Fair Housing Act, impose nondiscriminatory lending requirements
on financial institutions. The U.S. Department of Justice, CFPB and other federal and state agencies are responsible for enforcing these
laws and regulations. Private parties may also have the ability to challenge an institution’s performance under fair lending laws
in private class action litigation. A successful challenge to our performance under the fair lending laws and regulations could adversely
impact our rating under the Community Reinvestment Act and result in a wide variety of sanctions, including the required payment of damages
and civil money penalties, injunctive relief, imposition of restrictions on merger and acquisition activity and restrictions on expansion
activity, which could negatively impact our reputation, business, financial condition and results of operations.

The
Federal Reserve may require us to commit capital resources to support the Bank.

The Federal Reserve
requires a bank holding company to act as a source of financial strength to a subsidiary bank and to commit resources to support such
subsidiary bank. Under the “source of strength” doctrine, the Federal Reserve may require a bank holding company to make
capital injections into a troubled subsidiary bank and may charge the bank holding company with engaging in unsafe and unsound practices
for failure to commit resources to such a subsidiary bank. In addition, the Dodd-Frank Act directs the federal bank regulators to require
that all companies that directly or indirectly control an insured depository institution serve as a source of strength for the institution.
Under these requirements, in the future, we could be required to provide financial assistance the Bank if it experiences financial distress.

A capital injection
may be required at times when we do not have the resources to provide it, and therefore we may be required to borrow the funds. In the
event of a bank holding company’s bankruptcy, the bankruptcy trustee will assume any commitment by the holding company to a federal
bank regulatory agency to maintain the capital of a subsidiary bank. Moreover