ject to regulations prescribed by the Comptroller of the 
Currency in accordance with this section. The powers con-
ferred by this section are intended to provide for the cre-
ation and maintenance of mutual national banks as bodies 
corporate existing in perpetuity for the benefit of their de-
positors and the communities in which they operate. 
‘‘(b) REGULATIONS.— 
‘‘(1) REGULATIONS OF THE COMPTROLLER.— 
The Comptroller of the Currency is authorized to 
prescribe appropriate regulations for the organiza-
tion, incorporation, governance, conversion, examina-
tion, operation, supervision, and regulation of mu-
tual national banks. 
‘‘(2) APPLICABILITY
OF
CAPITAL
STOCK
RE-
QUIREMENTS.—The Comptroller of the Currency 
shall prescribe regulations regarding appropriate 
capital substitutes for the requirements of this title 
with respect to capital stock, and limitations im-
posed on national banks under this title based on 
capital stock, as such requirements shall apply to 
mutual national banks. 
‘‘(c) DE NOVO CHARTERS.— 
‘‘(1) The Comptroller of the Currency is au-
thorized to issue a certificate of authority to com-
mence the business of banking to a mutual national 
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bank in accordance with the requirements set forth 
in section 5169, provided that references to ‘capital 
stock’ shall mean ‘pledged accounts, nonwithdraw-
able investment certificates, or similar instruments’ 
by the incorporators. 
‘‘(2) Upon the issuance of the certificate re-
quired by paragraph (1), the mutual national bank 
shall become a body corporate and the incorporators 
shall become the first board of directors, with the 
power and authority to manage the affairs of the 
bank as herein set forth. 
‘‘(d) CONVERSIONS.— 
‘‘(1) CONVERSION OF A MUTUAL DEPOSITORY 
TO A MUTUAL NATIONAL BANK.—Subject to such 
regulations as the Comptroller of the Currency may 
prescribe, any mutual depository may convert to a 
mutual national bank by filing with the Comptroller 
of the Currency a notice of its election to convert on 
a specified date that is not earlier than 30 days 
after the date on which the notice is filed, and the 
mutual depository shall be converted to a mutual na-
tional bank charter on the date specified in the no-
tice. 
‘‘(2) 
CONVERSION
TO
STOCK
NATIONAL 
BANK.—Subject to such regulations as the Comp-
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troller of the Currency may prescribe for the protec-
tion of depositors’ rights and for any other purpose 
the Comptroller of the Currency may consider ap-
propriate, any national bank that is organized in the 
mutual form under subsection (a) may reorganize on 
an equitable basis as a stock national bank. 
‘‘(3) CONVERSION TO STATE BANKS.—Any na-
tional mutual bank may convert to a State bank 
charter in accordance with regulations prescribed by 
the Comptroller of the Currency and applicable 
State law. 
‘‘(e) TERMINATING MUTUALITY.—If a mutual na-
tional bank elects to terminate mutuality, it must do so 
by— 
‘‘(1) liquidating; or 
‘‘(2) converting on an equitable basis to a na-
tional banking association operating in stock form. 
‘‘(f) STATUS AND RIGHTS OF MEMBERS.— 
‘‘(1) IN GENERAL.—In general, the status of a 
member is primarily that of a depositor and second-
arily that of a holder of an inchoate right to partici-
pate in the equity of a mutual national bank upon 
a liquidation or conversion in accordance with regu-
lations prescribed by the Comptroller of the Cur-
rency. 
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‘‘(2) MANDATORY RIGHTS.—Each member of a 
mutual national bank shall have the following rights: 
‘‘(A) Such rights as may be agreed upon, 
by contract, between the member and the mu-
tual national bank. 
‘‘(B) In the event the board of directors, in 
its sole discretion, determines a conversion of a 
mutual national bank to a national banking as-
sociation operating in stock form is in the best 
interests of the community in which the bank 
operates, then the members as of a record date 
set by the board of directors shall have the first 
right to subscribe for and purchase stock in the 
converted bank, on an equitable basis based on 
the amount of the deposit held by such member 
as of the record date. 
‘‘(C) In the event— 
‘‘(i) the board of directors, in its sole 
discretion, determines a liquidation of the 
mutual national bank is in the best inter-
ests of the community in which the bank 
operates, and such board of directors has 
adopted a plan of liquidation in accordance 
with regulations proscribed by the Comp-
troller of the Currency, and the Comp-
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troller of the Currency has approved if 
such plan; or 
‘‘(ii) if for any other reason the bank 
is liquidated by operation of law, 
then the members as of the date of liquidation 
shall have the right to have credited to their ac-
counts, on a pro rata basis, any residual assets 
left after the payment of all liabilities and ex-
penses, including expenses of liquidation of the 
mutual national bank. 
‘‘(g) MANAGEMENT OF THE BANK.—The board of di-
rectors shall have the entire management and control of 
the affairs of the mutual national bank. No depositor or 
borrower shall have the right to vote on any matter relat-
ing to the mutual national bank. Any voting rights of 
members prior to a conversion to a mutual national bank 
shall be extinguished upon a conversion to a mutual na-
tional bank. 
‘‘(h) MUTUAL HOLDING COMPANY FORMATION.—A 
mutual national bank may reorganize into the mutual 
holding company form of organization in accordance with 
regulations promulgated by the Comptroller of the Cur-
rency. 
‘‘(i) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
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‘‘(1) INSURED DEPOSITORY INSTITUTION.—The 
term ‘insured depository institution’ has the same 
meaning as in section 3 of the Federal Deposit In-
surance Act. 
‘‘(2) MUTUAL
NATIONAL
BANK.—The term 
‘mutual national bank’ means a national banking as-
sociation that operates in mutual form and is char-
tered by the Comptroller of the Currency under this 
section. 
‘‘(3) MUTUAL DEPOSITORY.—The term ‘mutual 
depository’ means a depository institution that is or-
ganized in nonstock form, including a Federal non- 
stock depository and any form of nonstock deposi-
tory provided for under State law, the deposits of 
which are insured by an instrumentality of the Fed-
eral Government. 
‘‘(4) MUTUALITY.—The term ‘mutuality’ means 
the quality of being an insured depository institution 
organized under a Federal or State law providing for 
the organization of nonstock depository institutions, 
or a holding company organized under a Federal or 
State law providing for the organization of nonstock 
entities that control one or more depository institu-
tions. 
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