Payments on subordinated debt prohibited

(A) In general A critically undercapitalized insured depository institution shall not, beginning 60 days after becoming critically undercapitalized, make any payment of principal or interest on the institution’s subordinated debt.

(B) Exceptions The Corporation may make exceptions to subparagraph (A) if— (i) the appropriate Federal banking agency has taken action with respect to the insured depository institution under paragraph (3)(A)(ii); and (ii) the Corporation determines that the exception would further the purpose of this section.

(C) Limited exemption for certain subordinated debt Until July 15, 1996 , subparagraph (A) shall not apply with respect to any subordinated debt outstanding on July 15, 1991 , and not extended or otherwise renegotiated after July 15, 1991 .

(D) Accrual of interest Subparagraph (A) does not prevent unpaid interest from accruing on subordinated debt under the terms of that debt, to the extent otherwise permitted by law.