12 U.S.C. § 1818 : US Code - Section 1818: Termination of status as insured depository institution

Search 12 U.S.C. § 1818 : US Code - Section 1818: Termination of status as insured depository institution

(a) Termination of insurance
(1) Voluntary termination
Any insured depository institution which is not -
(A) a national member bank;
(B) a State member bank;
(C) a Federal branch;
(D) a Federal savings association; or
(E) an insured branch which is required to be insured under
subsection (a) or (b) (!1) of section 3104 of this title,
may terminate such depository institution's status as an insured
depository institution if such insured institution provides
written notice to the Corporation of the institution's intent to
terminate such status not less than 90 days before the effective
date of such termination.
(2) Involuntary termination
(A) Notice to primary regulator
If the Board of Directors determines that -
(i) an insured depository institution or the directors or
trustees of an insured depository institution have engaged or
are engaging in unsafe or unsound practices in conducting the
business of the depository institution;
(ii) an insured depository institution is in an unsafe or
unsound condition to continue operations as an insured
institution; or
(iii) an insured depository institution or the directors or
trustees of the insured institution have violated any
applicable law, regulation, order, condition imposed in
writing by the Corporation in connection with the approval of
any application or other request by the insured depository
institution, or written agreement entered into between the
insured depository institution and the Corporation,
the Board of Directors shall notify the appropriate Federal
banking agency with respect to such institution (if other than
the Corporation) or the State banking supervisor of such
institution (if the Corporation is the appropriate Federal
banking agency) of the Board's determination and the facts and
circumstances on which such determination is based for the
purpose of securing the correction of such practice, condition,
or violation. Such notice shall be given to the appropriate
Federal banking agency not less than 30 days before the notice
required by subparagraph (B), except that this period for
notice to the appropriate Federal banking agency may be reduced
or eliminated with the agreement of such agency.
(B) Notice of intention to terminate insurance
If, after giving the notice required under subparagraph (A)
with respect to an insured depository institution, the Board of
Directors determines that any unsafe or unsound practice or
condition or any violation specified in such notice requires
the termination of the insured status of the insured depository
institution, the Board shall -
(i) serve written notice to the insured depository
institution of the Board's intention to terminate the insured
status of the institution;
(ii) provide the insured depository institution with a
statement of the charges on the basis of which the
determination to terminate such institution's insured status
was made (or a copy of the notice under subparagraph (A));
and
(iii) notify the insured depository institution of the date
(not less than 30 days after notice under this subparagraph)
and place for a hearing before the Board of Directors (or any
person designated by the Board) with respect to the
termination of the institution's insured status.
(3) Hearing; termination
If, on the basis of the evidence presented at a hearing before
the Board of Directors (or any person designated by the Board for
such purpose), in which all issues shall be determined on the
record pursuant to section 554 of title 5 and the written
findings of the Board of Directors (or such person) with respect
to such evidence (which shall be conclusive), the Board of
Directors finds that any unsafe or unsound practice or condition
or any violation specified in the notice to an insured depository
institution under paragraph (2)(B) or subsection (w) of this
section has been established, the Board of Directors may issue an
order terminating the insured status of such depository
institution effective as of a date subsequent to such finding.
(4) Appearance; consent to termination
Unless the depository institution shall appear at the hearing
by a duly authorized representative, it shall be deemed to have
consented to the termination of its status as an insured
depository institution and termination of such status thereupon
may be ordered.
(5) Judicial review
Any insured depository institution whose insured status has
been terminated by order of the Board of Directors under this
subsection shall have the right of judicial review of such order
only to the same extent as provided for the review of orders
under subsection (h) of this section.
(6) Publication of notice of termination
The Corporation may publish notice of such termination and the
depository institution shall give notice of such termination to
each of its depositors at his last address of record on the books
of the depository institution, in such manner and at such time as
the Board of Directors may find to be necessary and may order for
the protection of depositors.
(7) Temporary insurance of deposits insured as of termination
After the termination of the insured status of any depository
institution under the provisions of this subsection, the insured
deposits of each depositor in the depository institution on the
date of such termination, less all subsequent withdrawals from
any deposits of such depositor, shall continue for a period of at
least 6 months or up to 2 years, within the discretion of the
Board of Directors, to be insured, and the depository institution
shall continue to pay to the Corporation assessments as in the
case of an insured depository institution during such period. No
additions to any such deposits and no new deposits in such
depository institution made after the date of such termination
shall be insured by the Corporation, and the depository
institution shall not advertise or hold itself out as having
insured deposits unless in the same connection it shall also
state with equal prominence that such additions to deposits and
new deposits made after such date are not so insured. Such
depository institution shall, in all other respects, be subject
to the duties and obligations of an insured depository
institution for the period referred to in the 1st sentence from
the date of such termination, and in the event that such
depository institution shall be closed on account of inability to
meet the demands of its depositors within such period, the
Corporation shall have the same powers and rights with respect to
such depository institution as in case of an insured depository
institution.
(8) Temporary suspension of insurance
(A) In general
If the Board of Directors initiates a termination proceeding
under paragraph (2), and the Board of Directors, after
consultation with the appropriate Federal banking agency, finds
that an insured depository institution (other than a savings
association to which subparagraph (B) applies) has no tangible
capital under the capital guidelines or regulations of the
appropriate Federal banking agency, the Corporation may issue a
temporary order suspending deposit insurance on all deposits
received by the institution.
(B) Special rule for certain savings institutions
(i) Certain goodwill included in tangible capital
In determining the tangible capital of a savings
association for purposes of this paragraph, the Board of
Directors shall include goodwill to the extent it is
considered a component of capital under section 1464(t) of
this title. Any savings association which would be subject to
a suspension order under subparagraph (A) but for the
operation of this subparagraph, shall be considered by the
Corporation to be a "special supervisory association".
(ii) Suspension order
The Corporation may issue a temporary order suspending
deposit insurance on all deposits received by a special
supervisory association whenever the Board of Directors
determines that -
(I) the capital of such association, as computed
utilizing applicable accounting standards, has suffered a
material decline;
(II) that such association (or its directors or officers)
is engaging in an unsafe or unsound practice in conducting
the business of the association;
(III) that such association is in an unsafe or unsound
condition to continue operating as an insured association;
or
(IV) that such association (or its directors or officers)
has violated any applicable law, rule, regulation, or
order, or any condition imposed in writing by a Federal
banking agency, or any written agreement including a
capital improvement plan entered into with any Federal
banking agency, or that the association has failed to enter
into a capital improvement plan which is acceptable to the
Corporation within the time period set forth in section
1464(t) of this title.
Nothing in this paragraph limits the right of the Corporation
or the Director of the Office of Thrift Supervision to
enforce a contractual provision which authorizes the
Corporation or the Director of the Office of Thrift
Supervision, as a successor to the Federal Savings and Loan
Insurance Corporation or the Federal Home Loan Bank Board, to
require a savings association to write down or amortize
goodwill at a faster rate than otherwise required under this
chapter or under applicable accounting standards.
(C) Effective period of temporary order
Any order issued under subparagraph (A) shall become
effective not earlier than 10 days from the date of service
upon the institution and, unless set aside, limited, or
suspended by a court in proceedings authorized hereunder, such
temporary order shall remain effective and enforceable until an
order of the Board under paragraph (3) becomes final or until
the Corporation dismisses the proceedings under paragraph (3).
(D) Judicial review
Before the close of the 10-day period beginning on the date
any temporary order has been served upon an insured depository
institution under subparagraph (A), such institution may apply
to the United States District Court for the District of
Columbia, or the United States district court for the judicial
district in which the home office of the institution is
located, for an injunction setting aside, limiting, or
suspending the enforcement, operation, or effectiveness of such
order, and such court shall have jurisdiction to issue such
injunction.
(E) Continuation of insurance for prior deposits
The insured deposits of each depositor in such depository
institution on the effective date of the order issued under
this paragraph, minus all subsequent withdrawals from any
deposits of such depositor, shall continue to be insured,
subject to the administrative proceedings as provided in this
chapter.
(F) Publication of order
The depository institution shall give notice of such order to
each of its depositors in such manner and at such times as the
Board of Directors may find to be necessary and may order for
the protection of depositors.
(G) Notice by Corporation
If the Corporation determines that the depository institution
has not substantially complied with the notice to depositors
required by the Board of Directors, the Corporation may provide
such notice in such manner as the Board of Directors may find
to be necessary and appropriate.
(H) Lack of notice
Notwithstanding subparagraph (A), any deposit made after the
effective date of a suspension order issued under this
paragraph shall remain insured to the extent that the depositor
establishes that -
(i) such deposit consists of additions made by automatic
deposit the depositor was unable to prevent; or
(ii) such depositor did not have actual knowledge of the
suspension of insurance.
(9) Final decisions to terminate insurance
Any decision by the Board of Directors to -
(A) issue a temporary order terminating deposit insurance; or
(B) issue a final order terminating deposit insurance (other
than under subsection (p) or (q) of this section);
shall be made by the Board of Directors and may not be delegated.
(10) Low- to moderate-income housing lender
In making any determination regarding the termination of
insurance of a solvent savings association, the Corporation may
consider the extent of the association's low- to moderate-income
housing loans.
(b) Cease-and-desist proceedings
(1) If, in the opinion of the appropriate Federal banking agency,
any insured depository institution, depository institution which
has insured deposits, or any institution-affiliated party is
engaging or has engaged, or the agency has reasonable cause to
believe that the depository institution or any institution-
affiliated party is about to engage, in an unsafe or unsound
practice in conducting the business of such depository institution,
or is violating or has violated, or the agency has reasonable cause
to believe that the depository institution or any institution-
affiliated party is about to violate, a law, rule, or regulation,
or any condition imposed in writing by a Federal banking agency in
connection with any action on any application, notice, or other
request by the depository institution or institution-affiliated
party, or any written agreement entered into with the agency, the
appropriate Federal banking agency for the depository institution
may issue and serve upon the depository institution or such party a
notice of charges in respect thereof. The notice shall contain a
statement of the facts constituting the alleged violation or
violations or the unsafe or unsound practice or practices, and
shall fix a time and place at which a hearing will be held to
determine whether an order to cease and desist therefrom should
issue against the depository institution or the institution-
affiliated party. Such hearing shall be fixed for a date not
earlier than thirty days nor later than sixty days after service of
such notice unless an earlier or a later date is set by the agency
at the request of any party so served. Unless the party or parties
so served shall appear at the hearing personally or by a duly
authorized representative, they shall be deemed to have consented
to the issuance of the cease-and-desist order. In the event of such
consent, or if upon the record made at any such hearing, the agency
shall find that any violation or unsafe or unsound practice
specified in the notice of charges has been established, the agency
may issue and serve upon the depository institution or the
institution-affiliated party an order to cease and desist from any
such violation or practice. Such order may, by provisions which may
be mandatory or otherwise, require the depository institution or
its institution-affiliated parties to cease and desist from the
same, and, further, to take affirmative action to correct the
conditions resulting from any such violation or practice.
(2) A cease-and-desist order shall become effective at the
expiration of thirty days after the service of such order upon the
depository institution or other person concerned (except in the
case of a cease-and-desist order issued upon consent, which shall
become effective at the time specified therein), and shall remain
effective and enforceable as provided therein, except to such
extent as it is stayed, modified, terminated, or set aside by
action of the agency or a reviewing court.
(3) This subsection, subsections (c) through (s) and subsection
(u) of this section, and section 1831aa of this title shall apply
to any bank holding company, and to any subsidiary (other than a
bank) of a bank holding company, as those terms are defined in the
Bank Holding Company Act of 1956 [12 U.S.C. 1841 et seq.], and to
any organization organized and operated under section 25(a) (!2) of
the Federal Reserve Act [12 U.S.C. 611 et seq.] or operating under
section 25 of the Federal Reserve Act [12 U.S.C. 601 et seq.], in
the same manner as they apply to a State member insured bank.
Nothing in this subsection or in subsection (c) of this section
shall authorize any Federal banking agency, other than the Board of
Governors of the Federal Reserve System, to issue a notice of
charges or cease-and-desist order against a bank holding company or
any subsidiary thereof (other than a bank or subsidiary of that
bank).
(4) This subsection, subsections (c) through (s) and subsection
(u) of this section, and section 1831aa of this title shall apply
to any foreign bank or company to which subsection (a) of section
3106 of this title applies and to any subsidiary (other than a
bank) of any such foreign bank or company in the same manner as
they apply to a bank holding company and any subsidiary thereof
(other than a bank) under paragraph (3) of this subsection. For the
purposes of this paragraph, the term "subsidiary" shall have the
meaning assigned to it in section 2 of the Bank Holding Company Act
of 1956 [12 U.S.C. 1841].
(5) This section shall apply, in the same manner as it applies to
any insured depository institution for which the appropriate
Federal banking agency is the Comptroller of the Currency, to any
national banking association chartered by the Comptroller of the
Currency, including an uninsured association.
(6) Affirmative action to correct conditions resulting from
violations or practices. - The authority to issue an order under
this subsection and subsection (c) of this section which requires
an insured depository institution or any institution-affiliated
party to take affirmative action to correct or remedy any
conditions resulting from any violation or practice with respect to
which such order is issued includes the authority to require such
depository institution or such party to -
(A) make restitution or provide reimbursement, indemnification,
or guarantee against loss if -
(i) such depository institution or such party was unjustly
enriched in connection with such violation or practice; or
(ii) the violation or practice involved a reckless disregard
for the law or any applicable regulations or prior order of the
appropriate Federal banking agency;
(B) restrict the growth of the institution;
(C) dispose of any loan or asset involved;
(D) rescind agreements or contracts; and
(E) employ qualified officers or employees (who may be subject
to approval by the appropriate Federal banking agency at the
direction of such agency); and
(F) take such other action as the banking agency determines to
be appropriate.
(7) Authority to limit activities. - The authority to issue an
order under this subsection or subsection (c) of this section
includes the authority to place limitations on the activities or
functions of an insured depository institution or any institution-
affiliated party.
(8) Unsatisfactory asset quality, management, earnings, or
liquidity as unsafe or unsound practice. - If an insured depository
institution receives, in its most recent report of examination, a
less-than-satisfactory rating for asset quality, management,
earnings, or liquidity, the appropriate Federal banking agency may
(if the deficiency is not corrected) deem the institution to be
engaging in an unsafe or unsound practice for purposes of this
subsection.
(9) Expansion of authority to savings and loan affiliates and
entities. - Subsections (a) through (s) of this section and
subsection (u) of this section shall apply to any savings and loan
holding company and to any subsidiary (other than a bank or
subsidiary of that bank) of a savings and loan holding
company,,(!3) whether wholly or partly owned, in the same manner as
such subsections apply to a savings association.
(10) Standard for certain orders. - No authority under this
subsection or subsection (c) of this section to prohibit any
institution-affiliated party from withdrawing, transferring,
removing, dissipating, or disposing of any funds, assets, or other
property may be exercised unless the appropriate Federal banking
agency meets the standards of Rule 65 of the Federal Rules of Civil
Procedure, without regard to the requirement of such rule that the
applicant show that the injury, loss, or damage is irreparable and
immediate.
(c) Temporary cease-and-desist orders
(1) Whenever the appropriate Federal banking agency shall
determine that the violation or threatened violation or the unsafe
or unsound practice or practices, specified in the notice of
charges served upon the depository institution or any institution-
affiliated party pursuant to paragraph (1) of subsection (b) of
this section, or the continuation thereof, is likely to cause
insolvency or significant dissipation of assets or earnings of the
depository institution, or is likely to weaken the condition of the
depository institution or otherwise prejudice the interests of its
depositors prior to the completion of the proceedings conducted
pursuant to paragraph (1) of subsection (b) of this section, the
agency may issue a temporary order requiring the depository
institution or such party to cease and desist from any such
violation or practice and to take affirmative action to prevent or
remedy such insolvency, dissipation, condition, or prejudice
pending completion of such proceedings. Such order may include any
requirement authorized under subsection (b)(6) of this section.
Such order shall become effective upon service upon the depository
institution or such institution-affiliated party and, unless set
aside, limited, or suspended by a court in proceedings authorized
by paragraph (2) of this subsection, shall remain effective and
enforceable pending the completion of the administrative
proceedings pursuant to such notice and until such time as the
agency shall dismiss the charges specified in such notice, or if a
cease-and-desist order is issued against the depository institution
or such party, until the effective date of such order.
(2) Within ten days after the depository institution concerned or
any institution-affiliated party has been served with a temporary
cease-and-desist order, the depository institution or such party
may apply to the United States district court for the judicial
district in which the home office of the depository institution is
located, or the United States District Court for the District of
Columbia, for an injunction setting aside, limiting, or suspending
the enforcement, operation, or effectiveness of such order pending
the completion of the administrative proceedings pursuant to the
notice of charges served upon the depository institution or such
party under paragraph (1) of subsection (b) of this section, and
such court shall have jurisdiction to issue such injunction.
(3) Incomplete or inaccurate records. -
(A) Temporary order. - If a notice of charges served under
subsection (b)(1) of this section specifies, on the basis of
particular facts and circumstances, that an insured depository
institution's books and records are so incomplete or inaccurate
that the appropriate Federal banking agency is unable, through
the normal supervisory process, to determine the financial
condition of that depository institution or the details or
purpose of any transaction or transactions that may have a
material effect on the financial condition of that depository
institution, the agency may issue a temporary order requiring -
(i) the cessation of any activity or practice which gave
rise, whether in whole or in part, to the incomplete or
inaccurate state of the books or records; or
(ii) affirmative action to restore such books or records to a
complete and accurate state, until the completion of the
proceedings under subsection (b)(1) of this section.
(B) Effective period. - Any temporary order issued under
subparagraph (A) -
(i) shall become effective upon service; and
(ii) unless set aside, limited, or suspended by a court in
proceedings under paragraph (2), shall remain in effect and
enforceable until the earlier of -
(I) the completion of the proceeding initiated under
subsection (b)(1) of this section in connection with the
notice of charges; or
(II) the date the appropriate Federal banking agency
determines, by examination or otherwise, that the insured
depository institution's books and records are accurate and
reflect the financial condition of the depository
institution.
(d) Temporary cease-and-desist orders; enforcement
In the case of violation or threatened violation of, or failure
to obey, a temporary cease-and-desist order issued pursuant to
paragraph (1) of subsection (c) of this section, the appropriate
Federal banking agency may apply to the United States district
court, or the United States court of any territory, within the
jurisdiction of which the home office of the depository institution
is located, for an injunction to enforce such order, and, if the
court shall determine that there has been such violation or
threatened violation or failure to obey, it shall be the duty of
the court to issue such injunction.
(e) Removal and prohibition authority
(1) Authority to issue order. - Whenever the appropriate Federal
banking agency determines that -
(A) any institution-affiliated party has, directly or
indirectly -
(i) violated -
(I) any law or regulation;
(II) any cease-and-desist order which has become final;
(III) any condition imposed in writing by a Federal banking
agency in connection with any action on any application,
notice, or request by such depository institution or
institution-affiliated party; or
(IV) any written agreement between such depository
institution and such agency;
(ii) engaged or participated in any unsafe or unsound
practice in connection with any insured depository institution
or business institution; or
(iii) committed or engaged in any act, omission, or practice
which constitutes a breach of such party's fiduciary duty;
(B) by reason of the violation, practice, or breach described
in any clause of subparagraph (A) -
(i) such insured depository institution or business
institution has suffered or will probably suffer financial loss
or other damage;
(ii) the interests of the insured depository institution's
depositors have been or could be prejudiced; or
(iii) such party has received financial gain or other benefit
by reason of such violation, practice, or breach; and
(C) such violation, practice, or breach -
(i) involves personal dishonesty on the part of such party;
or
(ii) demonstrates willful or continuing disregard by such
party for the safety or soundness of such insured depository
institution or business institution,
the appropriate Federal banking agency for the depository
institution may serve upon such party a written notice of the
agency's intention to remove such party from office or to prohibit
any further participation by such party, in any manner, in the
conduct of the affairs of any insured depository institution.
(2) Specific violations. -
(A) In general. - Whenever the appropriate Federal banking
agency determines that -
(i) an institution-affiliated party has committed a violation
of any provision of subchapter II of chapter 53 of title 31 and
such violation was not inadvertent or unintentional;
(ii) an officer or director of an insured depository
institution has knowledge that an institution-affiliated party
of the insured depository institution has violated any such
provision or any provision of law referred to in subsection
(g)(1)(A)(ii) of this section;
(iii) an officer or director of an insured depository
institution has committed any violation of the Depository
Institution Management Interlocks Act [12 U.S.C. 3201 et seq.];
or
(iv) an institution-affiliated party of a subsidiary (other
than a bank) of a bank holding company or of a subsidiary
(other than a savings association) of a savings and loan
holding company has been convicted of any criminal offense
involving dishonesty or a breach of trust or a criminal offense
under section 1956, 1957, or 1960 of title 18 or has agreed to
enter into a pretrial diversion or similar program in
connection with a prosecution for such an offense,
the agency may serve upon such party, officer, or director a
written notice of the agency's intention to remove such party
from office.
(B) Factors to be considered. - In determining whether an
officer or director should be removed as a result of the
application of subparagraph (A)(ii), the agency shall consider
whether the officer or director took appropriate action to stop,
or to prevent the recurrence of, a violation described in such
subparagraph.
(3) Suspension order. -
(A) Suspension or prohibition authorized. - If the appropriate
Federal banking agency serves written notice under paragraph (1)
or (2) to any institution-affiliated party of such agency's
intention to issue an order under such paragraph, the appropriate
Federal banking agency may suspend such party from office or
prohibit such party from further participation in any manner in
the conduct of the affairs of the depository institution, if the
agency -
(i) determines that such action is necessary for the
protection of the depository institution or the interests of
the depository institution's depositors; and
(ii) serves such party with written notice of the suspension
order.
(B) Effective period. - Any suspension order issued under
subparagraph (A) -
(i) shall become effective upon service; and
(ii) unless a court issues a stay of such order under
subsection (f) of this section, shall remain in effect and
enforceable until -
(I) the date the appropriate Federal banking agency
dismisses the charges contained in the notice served under
paragraph (1) or (2) with respect to such party; or
(II) the effective date of an order issued by the agency to
such party under paragraph (1) or (2).
(C) Copy of order. - If an appropriate Federal banking agency
issues a suspension order under subparagraph (A) to any
institution-affiliated party, the agency shall serve a copy of
such order on any insured depository institution with which such
party is associated at the time such order is issued.
(4) A notice of intention to remove an institution-affiliated
party from office or to prohibit such party from participating in
the conduct of the affairs of an insured depository institution,
shall contain a statement of the facts constituting grounds
therefor, and shall fix a time and place at which a hearing will be
held thereon. Such hearing shall be fixed for a date not earlier
than thirty days nor later than sixty days after the date of
service of such notice, unless an earlier or a later date is set by
the agency at the request of (A) such party, and for good cause
shown, or (B) the Attorney General of the United States. Unless
such party shall appear at the hearing in person or by a duly
authorized representative, such party shall be deemed to have
consented to the issuance of an order of such removal or
prohibition. In the event of such consent, or if upon the record
made at any such hearing the agency shall find that any of the
grounds specified in such notice have been established, the agency
may issue such orders of suspension or removal from office, or
prohibition from participation in the conduct of the affairs of the
depository institution, as it may deem appropriate. Any such order
shall become effective at the expiration of thirty days after
service upon such depository institution and such party concerned
(except in the case of an order issued upon consent, which shall
become effective at the time specified therein). Such order shall
remain effective and enforceable except to such extent as it is
stayed, modified, terminated, or set aside by action of the agency
or a reviewing court.
(5) For the purpose of enforcing any law, rule, regulation, or
cease-and-desist order in connection with an interlocking
relationship, the term "officer" within the term "institution-
affiliated party" as used in this subsection means an employee or
officer with management functions, and the term "director" within
the term "institution-affiliated party" as used in this subsection
includes an advisory or honorary director, a trustee of a
depository institution under the control of trustees, or any person
who has a representative or nominee serving in any such capacity.
(6) Prohibition of certain specific activities. - Any person
subject to an order issued under this subsection shall not -
(A) participate in any manner in the conduct of the affairs of
any institution or agency specified in paragraph (7)(A);
(B) solicit, procure, transfer, attempt to transfer, vote, or
attempt to vote any proxy, consent, or authorization with respect
to any voting rights in any institution described in subparagraph
(A);
(C) violate any voting agreement previously approved by the
appropriate Federal banking agency; or
(D) vote for a director, or serve or act as an institution-
affiliated party.
(7) Industrywide Prohibition. -
(A) In general. - Except as provided in subparagraph (B), any
person who, pursuant to an order issued under this subsection or
subsection (g) of this section, has been removed or suspended
from office in an insured depository institution or prohibited
from participating in the conduct of the affairs of an insured
depository institution may not, while such order is in effect,
continue or commence to hold any office in, or participate in any
manner in the conduct of the affairs of -
(i) any insured depository institution;
(ii) any institution treated as an insured bank under
subsection (b)(3) or (b)(4) of this section, or as a savings
association under subsection (b)(9) of this section;
(iii) any insured credit union under the Federal Credit Union
Act [12 U.S.C. 1751 et seq.];
(iv) any institution chartered under the Farm Credit Act of
1971 [12 U.S.C. 2001 et seq.];
(v) any appropriate Federal depository institution regulatory
agency;
(vi) the Federal Housing Finance Board and any Federal home
loan bank; and
(vii) the Resolution Trust Corporation.
(B) Exception if agency provides written consent. - If, on or
after the date an order is issued under this subsection which
removes or suspends from office any institution-affiliated party
or prohibits such party from participating in the conduct of the
affairs of an insured depository institution, such party receives
the written consent of -
(i) the agency that issued such order; and
(ii) the appropriate Federal financial institutions
regulatory agency of the institution described in any clause of
subparagraph (A) with respect to which such party proposes to
become an institution-affiliated party,
subparagraph (A) shall, to the extent of such consent, cease to
apply to such party with respect to the institution described in
each written consent. Any agency that grants such a written
consent shall report such action to the Corporation and publicly
disclose such consent.
(C) Violation of paragraph treated as violation of order. - Any
violation of subparagraph (A) by any person who is subject to an
order described in such subparagraph shall be treated as a
violation of the order.
(D) "Appropriate federal financial institutions regulatory
agency" defined. - For purposes of this paragraph and subsection
(j) of this section, the term "appropriate Federal financial
institutions regulatory agency" means -
(i) the appropriate Federal banking agency, in the case of an
insured depository institution;
(ii) the Farm Credit Administration, in the case of an
institution chartered under the Farm Credit Act of 1971 [12
U.S.C. 2001 et seq.];
(iii) the National Credit Union Administration Board, in the
case of an insured credit union (as defined in section 101(7)
of the Federal Credit Union Act [12 U.S.C. 1752(7)]);
(iv) the Secretary of the Treasury, in the case of the
Federal Housing Finance Board and any Federal home loan bank;
and
(v) the Thrift Depositor Protection Oversight Board, in the
case of the Resolution Trust Corporation.
(E) Consultation between agencies. - The agencies referred to
in clauses (i) and (ii) of subparagraph (B) shall consult with
each other before providing any written consent described in
subparagraph (B).
(F) Applicability. - This paragraph shall only apply to a
person who is an individual, unless the appropriate Federal
banking agency specifically finds that it should apply to a
corporation, firm, or other business enterprise.
(f) Stay of suspension and/or prohibition of institution-affiliated
party
Within ten days after any institution-affiliated party has been
suspended from office and/or prohibited from participation in the
conduct of the affairs of an insured depository institution under
subsection (e)(3) of this section, such party may apply to the
United States district court for the judicial district in which the
home office of the depository institution is located, or the United
States District Court for the District of Columbia, for a stay of
such suspension and/or prohibition pending the completion of the
administrative proceedings pursuant to the notice served upon such
party under subsection (e)(1) or (e)(2) of this section, and such
court shall have jurisdiction to stay such suspension and/or
prohibition.
(g) Suspension, removal, and prohibition from participation orders
in the case of certain criminal offenses
(1) Suspension or prohibition. -
(A) In general. - Whenever any institution-affiliated party is
the subject of any information, indictment, or complaint,
involving the commission of or participation in -
(i) a crime involving dishonesty or breach of trust which is
punishable by imprisonment for a term exceeding one year under
State or Federal law, or
(ii) a criminal violation of section 1956, 1957, or 1960 of
title 18 or section 5322 or 5324 of title 31,
the appropriate Federal banking agency may, if continued service
or participation by such party posed, poses, or may pose a threat
to the interests of the depositors of, or threatened, threatens,
or may threaten to impair public confidence in, any relevant
depository institution (as defined in subparagraph (E)), by
written notice served upon such party, suspend such party from
office or prohibit such party from further participation in any
manner in the conduct of the affairs of any depository
institution.
(B) Provisions applicable to notice. -
(i) Copy. - A copy of any notice under subparagraph (A) shall
also be served upon any depository institution that the subject
of the notice is affiliated with at the time the notice is
issued.
(ii) Effective period. - A suspension or prohibition under
subparagraph (A) shall remain in effect until the information,
indictment, or complaint referred to in such subparagraph is
finally disposed of or until terminated by the agency.
(C) Removal or prohibition. -
(i) In general. - If a judgment of conviction or an agreement
to enter a pretrial diversion or other similar program is
entered against an institution-affiliated party in connection
with a crime described in subparagraph (A)(i), at such time as
such judgment is not subject to further appellate review, the
appropriate Federal banking agency may, if continued service or
participation by such party posed, poses, or may pose a threat
to the interests of the depositors of, or threatened,
threatens, or may threaten to impair public confidence in, any
relevant depository institution (as defined in subparagraph
(E)), issue and serve upon such party an order removing such
party from office or prohibiting such party from further
participation in any manner in the conduct of the affairs of
any depository institution without the prior written consent of
the appropriate agency.
(ii) Required for certain offenses. - In the case of a
judgment of conviction or agreement against an institution-
affiliated party in connection with a violation described in
subparagraph (A)(ii), the appropriate Federal banking agency
shall issue and serve upon such party an order removing such
party from office or prohibiting such party from further
participation in any manner in the conduct of the affairs of
any depository institution without the prior written consent of
the appropriate agency.
(D) Provisions applicable to order. -
(i) Copy. - A copy of any order under subparagraph (C) shall
also be served upon any depository institution that the subject
of the order is affiliated with at the time the order is
issued, whereupon the institution-affiliated party who is
subject to the order (if a director or an officer) shall cease
to be a director or officer of such depository institution.
(ii) Effect of acquittal. - A finding of not guilty or other
disposition of the charge shall not preclude the agency from
instituting proceedings after such finding or disposition to
remove such party from office or to prohibit further
participation in depository institution affairs, pursuant to
paragraph (1), (2), or (3) of subsection (e) of this section.
(iii) Effective period. - Any notice of suspension or order
of removal issued under this paragraph shall remain effective
and outstanding until the completion of any hearing or appeal
authorized under paragraph (3) unless terminated by the agency.
(E) Relevant depository institution. - For purposes of this
subsection, the term "relevant depository institution" means any
depository institution of which the party is or was an
institution-affiliated party at the time at which -
(i) the information, indictment, or complaint described in
subparagraph (A) was issued; or
(ii) the notice is issued under subparagraph (A) or the order
is issued under subparagraph (C)(i).
(2) If at any time, because of the suspension of one or more
directors pursuant to this section, there shall be on the board of
directors of a national bank less than a quorum of directors not so
suspended, all powers and functions vested in or exercisable by
such board shall vest in and be exercisable by the director or
directors on the board not so suspended, until such time as there
shall be a quorum of the board of directors. In the event all of
the directors of a national bank are suspended pursuant to this
section, the Comptroller of the Currency shall appoint persons to
serve temporarily as directors in their place and stead pending the
termination of such suspensions, or until such time as those who
have been suspended, cease to be directors of the bank and their
respective successors take office.
(3) Within thirty days from service of any notice of suspension
or order of removal issued pursuant to paragraph (1) of this
subsection, the institution-affiliated party concerned may request
in writing an opportunity to appear before the agency to show that
the continued service to or participation in the conduct of the
affairs of the depository institution by such party does not, or is
not likely to, pose a threat to the interests of the bank's (!4)
depositors or threaten to impair public confidence in the
depository institution. Upon receipt of any such request, the
appropriate Federal banking agency shall fix a time (not more than
thirty days after receipt of such request, unless extended at the
request of such party) and place at which such party may appear,
personally or through counsel, before one or more members of the
agency or designated employees of the agency to submit written
materials (or, at the discretion of the agency, oral testimony) and
oral argument. Within sixty days of such hearing, the agency shall
notify such party whether the suspension or prohibition from
participation in any manner in the conduct of the affairs of the
depository institution will be continued, terminated, or otherwise
modified, or whether the order removing such party from office or
prohibiting such party from further participation in any manner in
the conduct of the affairs of the depository institution will be
rescinded or otherwise modified. Such notification shall contain a
statement of the basis for the agency's decision, if adverse to
such party. The Federal banking agencies are authorized to
prescribe such rules as may be necessary to effectuate the purposes
of this subsection.
(h) Hearings and judicial review
(1) Any hearing provided for in this section (other than the
hearing provided for in subsection (g)(3) of this section) shall be
held in the Federal judicial district or in the territory in which
the home office of the depository institution is located unless the
party afforded the hearing consents to another place, and shall be
conducted in accordance with the provisions of chapter 5 of title
5. After such hearing, and within ninety days after the appropriate
Federal banking agency or Board of Governors of the Federal Reserve
System has notified the parties that the case has been submitted to
it for final decision, it shall render its decision (which shall
include findings of fact upon which its decision is predicated) and
shall issue and serve upon each party to the proceeding an order or
orders consistent with the provisions of this section. Judicial
review of any such order shall be exclusively as provided in this
subsection (h). Unless a petition for review is timely filed in a
court of appeals of the United States, as hereinafter provided in
paragraph (2) of this subsection, and thereafter until the record
in the proceeding has been filed as so provided, the issuing agency
may at any time, upon such notice and in such manner as it shall
deem proper, modify, terminate, or set aside any such order. Upon
such filing of the record, the agency may modify, terminate, or set
aside any such order with permission of the court.
(2) Any party to any proceeding under paragraph (1) may obtain a
review of any order served pursuant to paragraph (1) of this
subsection (other than an order issued with the consent of the
depository institution or the institution-affiliated party
concerned, or an order issued under paragraph (1) of subsection (g)
of this section) by the filing in the court of appeals of the
United States for the circuit in which the home office of the
depository institution is located, or in the United States Court of
Appeals for the District of Columbia Circuit, within thirty days
after the date of service of such order, a written petition praying
that the order of the agency be modified, terminated, or set aside.
A copy of such petition shall be forthwith transmitted by the clerk
of the court to the agency, and thereupon the agency shall file in
the court the record in the proceeding, as provided in section 2112
of title 28. Upon the filing of such petition, such court shall
have jurisdiction, which upon the filing of the record shall except
as provided in the last sentence of said paragraph (1) be
exclusive, to affirm, modify, terminate, or set aside, in whole or
in part, the order of the agency. Review of such proceedings shall
be had as provided in chapter 7 of title 5. The judgment and decree
of the court shall be final, except that the same shall be subject
to review by the Supreme Court upon certiorari, as provided in
section 1254 of title 28.
(3) The commencement of proceedings for judicial review under
paragraph (2) of this subsection shall not, unless specifically
ordered by the court, operate as a stay of any order issued by the
agency.
(i) Jurisdiction and enforcement; penalty
(1) The appropriate Federal banking agency may in its discretion
apply to the United States district court, or the United States
court of any territory, within the jurisdiction of which the home
office of the depository institution is located, for the
enforcement of any effective and outstanding notice or order issued
under this section or under section 1831o or 1831p-1 of this title,
and such courts shall have jurisdiction and power to order and
require compliance herewith; but except as otherwise provided in
this section or under section 1831o or 1831p-1 of this title no
court shall have jurisdiction to affect by injunction or otherwise
the issuance or enforcement of any notice or order under any such
section, or to review, modify, suspend, terminate, or set aside any
such notice or order.
(2) Civil money penalty. -
(A) First tier. - Any insured depository institution which, and
any institution-affiliated party who -
(i) violates any law or regulation;
(ii) violates any final order or temporary order issued
pursuant to subsection (b), (c), (e), (g), or (s) of this
section or any final order under section 1831o or 1831p-1 of
this title;
(iii) violates any condition imposed in writing by a Federal
banking agency in connection with any action on any
application, notice, or other request by the depository
institution or institution-affiliated party; or
(iv) violates any written agreement between such depository
institution and such agency,
shall forfeit and pay a civil penalty of not more than $5,000 for
each day during which such violation continues.
(B) Second tier. - Notwithstanding subparagraph (A), any
insured depository institution which, and any institution-
affiliated party who -
(i)(I) commits any violation described in any clause of
subparagraph (A);
(II) recklessly engages in an unsafe or unsound practice in
conducting the affairs of such insured depository institution;
or
(III) breaches any fiduciary duty;
(ii) which violation, practice, or breach -
(I) is part of a pattern of misconduct;
(II) causes or is likely to cause more than a minimal loss
to such depository institution; or
(III) results in pecuniary gain or other benefit to such
party,
shall forfeit and pay a civil penalty of not more than $25,000
for each day during which such violation, practice, or breach
continues.
(C) Third tier. - Notwithstanding subparagraphs (A) and (B),
any insured depository institution which, and any institution-
affiliated party who -
(i) knowingly -
(I) commits any violation described in any clause of
subparagraph (A);
(II) engages in any unsafe or unsound practice in
conducting the affairs of such depository institution; or
(III) breaches any fiduciary duty; and
(ii) knowingly or recklessly causes a substantial loss to
such depository institution or a substantial pecuniary gain or
other benefit to such party by reason of such violation,
practice, or breach,
shall forfeit and pay a civil penalty in an amount not to exceed
the applicable maximum amount determined under subparagraph (D)
for each day during which such violation, practice, or breach
continues.
(D) Maximum amounts of penalties for any violation described in
subparagraph (c). - The maximum daily amount of any civil penalty
which may be assessed pursuant to subparagraph (C) for any
violation, practice, or breach described in such subparagraph is -

(i) in the case of any person other than an insured
depository institution, an amount to not exceed $1,000,000; and
(ii) in the case of any insured depository institution, an
amount not to exceed the lesser of -
(I) $1,000,000; or
(II) 1 percent of the total assets of such institution.
(E) Assessment. -
(i) Written notice. - Any penalty imposed under subparagraph
(A), (B), or (C) may be assessed and collected by the
appropriate Federal banking agency by written notice.
(ii) Finality of assessment. - If, with respect to any
assessment under clause (i), a hearing is not requested
pursuant to subparagraph (H) within the period of time allowed
under such subparagraph, the assessment shall constitute a
final and unappealable order.
(F) Authority to modify or remit penalty. - Any appropriate
Federal banking agency may compromise, modify, or remit any
penalty which such agency may assess or had already assessed
under subparagraph (A), (B), or (C).
(G) Mitigating factors. - In determining the amount of any
penalty imposed under subparagraph (A), (B), or (C), the
appropriate agency shall take into account the appropriateness of
the penalty with respect to -
(i) the size of financial resources and good faith of the
insured depository institution or other person charged;
(ii) the gravity of the violation;
(iii) the history of previous violations; and
(iv) such other matters as justice may require.
(H) Hearing. - The insured depository institution or other
person against whom any penalty is assessed under this paragraph
shall be afforded an agency hearing if such institution or person
submits a request for such hearing within 20 days after the
issuance of the notice of assessment.
(I) Collection. -
(i) Referral. - If any insured depository institution or
other person fails to pay an assessment after any penalty
assessed under this paragraph has become final, the agency that
imposed the penalty shall recover the amount assessed by action
in the appropriate United States district court.
(ii) Appropriateness of penalty not reviewable. - In any
civil action under clause (i), the validity and appropriateness
of the penalty shall not be subject to review.
(J) Disbursement. - All penalties collected under authority of
this paragraph shall be deposited into the Treasury.
(K) Regulations. - Each appropriate Federal banking agency
shall prescribe regulations establishing such procedures as may
be necessary to carry out this paragraph.
(3) Notice under this section after separation from service. -
The resignation, termination of employment or participation, or
separation of a institution-affiliated party (including a
separation caused by the closing of an insured depository
institution) shall not affect the jurisdiction and authority of the
appropriate Federal banking agency to issue any notice or order and
proceed under this section against any such party, if such notice
or order is served before the end of the 6-year period beginning on
the date such party ceased to be such a party with respect to such
depository institution (whether such date occurs before, on, or
after August 9, 1989).
(4) Prejudgment attachment. -
(A) In general. - In any action brought by an appropriate
Federal banking agency (excluding the Corporation when acting in
a manner described in section 1821(d)(18) of this title) pursuant
to this section, or in actions brought in aid of, or to enforce
an order in, any administrative or other civil action for money
damages, restitution, or civil money penalties brought by such
agency, the court may, upon application of the agency, issue a
restraining order that -
(i) prohibits any person subject to the proceeding from
withdrawing, transferring, removing, dissipating, or disposing
of any funds, assets or other property; and
(ii) appoints a temporary receiver to administer the
restraining order.
(B) Standard. -
(i) Showing. - Rule 65 of the Federal Rules of Civil
Procedure shall apply with respect to any proceeding under
subparagraph (A) without regard to the requirement of such rule
that the applicant show that the injury, loss, or damage is
irreparable and immediate.
(ii) State proceeding. - If, in the case of any proceeding in
a State court, the court determines that rules of civil
procedure available under the laws of such State provide
substantially similar protections to a party's right to due
process as Rule 65 (as modified with respect to such proceeding
by clause (i)), the relief sought under subparagraph (A) may be
requested under the laws of such State.
(j) Criminal penalty
Whoever, being subject to an order in effect under subsection (e)
or (g) of this section, without the prior written approval of the
appropriate Federal financial institutions regulatory agency,
knowingly participates, directly or indirectly, in any manner
(including by engaging in an activity specifically prohibited in
such an order or in subsection (e)(6) of this section) in the
conduct of the affairs of -
(1) any insured depository institution;
(2) any institution treated as an insured bank under subsection
(b)(3) or (b)(4) of this section, or as a savings association
under subsection (b)(9) of this section;
(3) any insured credit union (as defined in section 101(7) of
the Federal Credit Union Act [12 U.S.C. 1752(7)]);
(4) any institution chartered under the Farm Credit Act of 1971
[12 U.S.C. 2001 et seq.]; or
(5) the Resolution Trust Corporation,
shall be fined not more than $1,000,000, imprisoned for not more
than 5 years, or both.
(k) Repealed. Pub. L. 101-73, title IX, Sec. 920(c), Aug. 9, 1989,
103 Stat. 488
(l) Notice of service
Any service required or authorized to be made by the appropriate
Federal banking agency under this section may be made by registered
mail, or in such other manner reasonably calculated to give actual
notice as the agency may by regulation or otherwise provide. Copies
of any notice or order served by the agency upon any State
depository institution or any institution-affiliated party,
pursuant to the provisions of this section, shall also be sent to
the appropriate State supervisory authority.
(m) Notice to State authorities
In connection with any proceeding under subsection (b), (c)(1),
or (e) of this section involving an insured State bank or any
institution-affiliated party, the appropriate Federal banking
agency shall provide the appropriate State supervisory authority
with notice of the agency's intent to institute such a proceeding
and the grounds therefor. Unless within such time as the Federal
banking agency deems appropriate in the light of the circumstances
of the case (which time must be specified in the notice prescribed
in the preceding sentence) satisfactory corrective action is
effectuated by action of the State supervisory authority, the
agency may proceed as provided in this section. No bank or other
party who is the subject of any notice or order issued by the
agency under this section shall have standing to raise the
requirements of this subsection as ground for attacking the
validity of any such notice or order.
(n) Ancillary provisions; subpena power, etc.
In the course of or in connection with any proceeding under this
section, or in connection with any claim for insured deposits or
any examination or investigation under section 1820(c) of this
title, the agency conducting the proceeding, examination, or
investigation or considering the claim for insured deposits, or any
member or designated representative thereof, including any person
designated to conduct any hearing under this section, shall have
the power to administer oaths and affirmations, to take or cause to
be taken depositions, and to issue, revoke, quash, or modify
subpenas and subpenas duces tecum; and such agency is empowered to
make rules and regulations with respect to any such proceedings,
claims, examinations, or investigations. The attendance of
witnesses and the production of documents provided for in this
subsection may be required from any place in any State or in any
territory or other place subject to the jurisdiction of the United
States at any designated place where such proceeding is being
conducted. Any such agency or any party to proceedings under this
section may apply to the United States District Court for the
District of Columbia, or the United States district court for the
judicial district or the United States court in any territory in
which such proceeding is being conducted, or where the witness
resides or carries on business, for enforcement of any subpena or
subpena duces tecum issued pursuant to this subsection, and such
courts shall have jurisdiction and power to order and require
compliance therewith. Witnesses subpenaed under this subsection
shall be paid the same fees and mileage that are paid witnesses in
the district courts of the United States. Any court having
jurisdiction of any proceeding instituted under this section by an
insured depository institution or a director or officer thereof,
may allow to any such party such reasonable expenses and attorneys'
fees as it deems just and proper; and such expenses and fees shall
be paid by the depository institution or from its assets. Any
person who willfully shall fail or refuse to attend and testify or
to answer any lawful inquiry or to produce books, papers,
correspondence, memoranda, contracts, agreements, or other records,
if in such person's power so to do, in obedience to the subpoena of
the appropriate Federal banking agency, shall be guilty of a
misdemeanor and, upon conviction, shall be subject to a fine of not
more than $1,000 or to imprisonment for a term of not more than one
year or both.
(o) Termination of membership of State bank in Federal Reserve
System
Whenever the insured status of a State member bank shall be
terminated by action of the Board of Directors, the Board of
Governors of the Federal Reserve System shall terminate its
membership in the Federal Reserve System in accordance with the
provisions of subchapter VIII of chapter 3 of this title, and
whenever the insured status of a national member bank shall be so
terminated the Comptroller of the Currency shall appoint a receiver
for the bank, which shall be the Corporation. Except as provided in
subsection (c) or (d) of section 1814 of this title, whenever a
member bank shall cease to be a member of the Federal Reserve
System, its status as an insured depository institution shall,
without notice or other action by the Board of Directors, terminate
on the date the bank shall cease to be a member of the Federal
Reserve System, with like effect as if its insured status had been
terminated on said date by the Board of Directors after proceedings
under subsection (a) of this section. Whenever the insured status
of an insured Federal savings bank shall be terminated by action of
the Board of Directors, the Director of the Office of Thrift
Supervision shall appoint a receiver for the bank, which shall be
the Corporation.
(p) Banks not receiving deposits
Notwithstanding any other provision of law, whenever the Board of
Directors shall determine that an insured depository institution is
not engaged in the business of receiving deposits, other than trust
funds as herein defined, the Corporation shall notify the
depository institution that its insured status will terminate at
the expiration of the first full assessment period following such
notice. A finding by the Board of Directors that a depository
institution is not engaged in the business of receiving deposits,
other than such trust funds, shall be conclusive. The Board of
Directors shall prescribe the notice to be given by the depository
institution of such termination and the Corporation may publish
notice thereof. Upon the termination of the insured status of any
such depository institution, its deposits shall thereupon cease to
be insured and the depository institution shall thereafter be
relieved of all future obligations to the Corporation, including
the obligation to pay future assessments.
(q) Assumption of liabilities
Whenever the liabilities of an insured depository institution for
deposits shall have been assumed by another insured depository
institution or depository institutions, whether by way of merger,
consolidation, or other statutory assumption, or pursuant to
contract (1) the insured status of the depository institution whose
liabilities are so assumed shall terminate on the date of receipt
by the Corporation of satisfactory evidence of such assumption; (2)
the separate insurance of all deposits so assumed shall terminate
at the end of six months from the date such assumption takes effect
or, in the case of any time deposit, the earliest maturity date
after the six-month period. Where the deposits of an insured
depository institution are assumed by a newly insured depository
institution, the depository institution whose deposits are assumed
shall not be required to pay any assessment with respect to the
deposits which have been so assumed after the assessment period in
which the assumption takes effect.
(r) Action or proceeding against foreign bank; basis; removal of
officer or other person; venue; service of process
(1) Except as otherwise specifically provided in this section,
the provisions of this section shall be applied to foreign banks in
accordance with this subsection.
(2) An act or practice outside the United States on the part of a
foreign bank or any officer, director, employee, or agent thereof
may not constitute the basis for any action by any officer or
agency of the United States under this section, unless -
(A) such officer or agency alleges a belief that such act or
practice has been, is, or is likely to be a cause of or carried
on in connection with or in furtherance of an act or practice
within any one or more States which, in and of itself, would
constitute an appropriate basis for action by a Federal officer
or agency under this section; or
(B) the alleged act or practice is one which, if proven, would,
in the judgment of the Board of Directors, adversely affect the
insurance risk assumed by the Corporation.
(3) In any case in which any action or proceeding is brought
pursuant to an allegation under paragraph (2) of this subsection
for the suspension or removal of any officer, director, or other
person associated with a foreign bank, and such person fails to
appear promptly as a party to such action or proceeding and to
comply with any effective order or judgment therein, any failure by
the foreign bank to secure his removal from any office he holds in
such bank and from any further participation in its affairs shall,
in and of itself, constitute grounds for termination of the
insurance of the deposits in any branch of the bank.
(4) Where the venue of any judicial or administrative proceeding
under this section is to be determined by reference to the location
of the home office of a bank, the venue of such a proceeding with
respect to a foreign bank having one or more branches or agencies
in not more than one judicial district or other relevant
jurisdiction shall be within such jurisdiction. Where such a bank
has branches or agencies in more than one such jurisdiction, the
venue shall be in the jurisdiction within which the branch or
branches or agency or agencies involved in the proceeding are
located, and if there is more than one such jurisdiction, the venue
shall be proper in any such jurisdiction in which the proceeding is
brought or to which it may appropriately be transferred.
(5) Any service required or authorized to be made on a foreign
bank may be made on any branch or agency located within any State,
but if such service is in connection with an action or proceeding
involving one or more branches or one or more agencies located in
any State, service shall be made on at least one branch or agency
so involved.
(s) Compliance with monetary transaction recordkeeping and report
requirements
(1) Compliance procedures required
Each appropriate Federal banking agency shall prescribe
regulations requiring insured depository institutions to
establish and maintain procedures reasonably designed to assure
and monitor the compliance of such depository institutions with
the requirements of subchapter II of chapter 53 of title 31.
(2) Examinations of depository institution to include review of
compliance procedures
(A) In general
Each examination of an insured depository institution by the
appropriate Federal banking agency shall include a review of
the procedures required to be established and maintained under
paragraph (1).
(B) Exam report requirement
The report of examination shall describe any problem with the
procedures maintained by the insured depository institution.
(3) Order to comply with requirements
If the appropriate Federal banking agency determines that an
insured depository institution -
(A) has failed to establish and maintain the procedures
described in paragraph (1); or
(B) has failed to correct any problem with the procedures
maintained by such depository institution which was previously
reported to the depository institution by such agency,
the agency shall issue an order in the manner prescribed in
subsection (b) or (c) of this section requiring such depository
institution to cease and desist from its violation of this
subsection or regulations prescribed under this subsection.
(t) Authority of FDIC to take enforcement action against insured
depository institutions and institution-affiliated parties
(1) Recommending action by appropriate Federal banking agency
The Corporation, based on an examination of an insured
depository institution by the Corporation or by the appropriate
Federal banking agency or on other information, may recommend in
writing to the appropriate Federal banking agency that the agency
take any enforcement action authorized under section 1817(j) of
this title, this section, or section 1828(j) of this title with
respect to any insured depository institution or any institution-
affiliated party. The recommendation shall be accompanied by a
written explanation of the concerns giving rise to the
recommendation.
(2) FDIC's authority to act if appropriate Federal banking agency
fails to follow recommendation
If the appropriate Federal banking agency does not, before the
end of the 60-day period beginning on the date on which the
agency receives the recommendation under paragraph (1), take the
enforcement action recommended by the Corporation or provide a
plan acceptable to the Corporation for responding to the
Corporation's concerns, the Corporation may take the recommended
enforcement action if the Board of Directors determines, upon a
vote of its members, that -
(A) the insured depository institution is in an unsafe or
unsound condition;
(B) the institution or institution-affiliated party is
engaging in unsafe or unsound practices, and the recommended
enforcement action will prevent the institution or institution-
affiliated party from continuing such practices; or
(C) the conduct or threatened conduct (including any acts or
omissions) poses a risk to the Deposit Insurance Fund, or may
prejudice the interests of the institution's depositors.
(3) Effect of exigent circumstances
(A) Authority to act
The Corporation may, upon a vote of the Board of Directors,
and after notice to the appropriate Federal banking agency,
exercise its authority under paragraph (2) in exigent
circumstances without regard to the time period set forth in
paragraph (2).
(B) Agreement on exigent circumstances
The Corporation shall, by agreement with the appropriate
Federal banking agency, set forth those exigent circumstances
in which the Corporation may act under subparagraph (A).
(4) Corporation's powers; institution's duties
For purposes of this subsection -
(A) the Corporation shall have the same powers with respect
to any insured depository institution and its affiliates as the
appropriate Federal banking agency has with respect to the
institution and its affiliates; and
(B) the institution and its affiliates shall have the same
duties and obligations with respect to the Corporation as the
institution and its affiliates have with respect to the
appropriate Federal banking agency.
(5) Requests for formal actions and investigations
(A) Submission of requests
A regional office of an appropriate Federal banking agency
(including a Federal Reserve bank) that requests a formal
investigation of or civil enforcement action against an insured
depository institution or institution-affiliated party shall
submit the request concurrently to the chief officer of the
appropriate Federal banking agency and to the Corporation.
(B) Agencies required to report on requests
Each appropriate Federal banking agency shall report
semiannually to the Corporation on the status or disposition of
all requests under subparagraph (A), including the reasons for
any decision by the agency to approve or deny such requests.
(u) Public disclosures of final orders and agreements
(1) In general
The appropriate Federal banking agency shall publish and make
available to the public on a monthly basis -
(A) any written agreement or other written statement for
which a violation may be enforced by the appropriate Federal
banking agency, unless the appropriate Federal banking agency,
in its discretion, determines that publication would be
contrary to the public interest;
(B) any final order issued with respect to any administrative
enforcement proceeding initiated by such agency under this
section or any other law; and
(C) any modification to or termination of any order or
agreement made public pursuant to this paragraph.
(2) Hearings
All hearings on the record with respect to any notice of
charges issued by a Federal banking agency shall be open to the
public, unless the agency, in its discretion, determines that
holding an open hearing would be contrary to the public interest.
(3) Transcript of hearing
A transcript that includes all testimony and other documentary
evidence shall be prepared for all hearings commenced pursuant to
subsection (i) of this section. A transcript of public hearings
shall be made available to the public pursuant to section 552 of
title 5.
(4) Delay of publication under exceptional circumstances
If the appropriate Federal banking agency makes a determination
in writing that the publication of a final order pursuant to
paragraph (1)(B) would seriously threaten the safety and
soundness of an insured depository institution, the agency may
delay the publication of the document for a reasonable time.
(5) Documents filed under seal in public enforcement hearings
The appropriate Federal banking agency may file any document or
part of a document under seal in any administrative enforcement
hearing commenced by the agency if disclosure of the document
would be contrary to the public interest. A written report shall
be made part of any determination to withhold any part of a
document from the transcript of the hearing required by paragraph
(2).
(6) Retention of documents
Each Federal banking agency shall keep and maintain a record,
for a period of at least 6 years, of all documents described in
paragraph (1) and all informal enforcement agreements and other
supervisory actions and supporting documents issued with respect
to or in connection with any administrative enforcement
proceeding initiated by such agency under this section or any
other laws.
(7) Disclosures to Congress
No provision of this subsection may be construed to authorize
the withholding, or to prohibit the disclosure, of any
information to the Congress or any committee or subcommittee of
the Congress.
(v) Foreign investigations
(1) Requesting assistance from foreign banking authorities
In conducting any investigation, examination, or enforcement
action under this chapter, the appropriate Federal banking agency
may -
(A) request the assistance of any foreign banking authority;
and
(B) maintain an office outside the United States.
(2) Providing assistance to foreign banking authorities
(A) In general
Any appropriate Federal banking agency may, at the request of
any foreign banking authority, assist such authority if such
authority states that the requesting authority is conducting an
investigation to determine whether any person has violated, is
violating, or is about to violate any law or regulation
relating to banking matters or currency transactions
administered or enforced by the requesting authority.
(B) Investigation by Federal banking agency
Any appropriate Federal banking agency may, in such agency's
discretion, investigate and collect information and evidence
pertinent to a request for assistance under subparagraph (A).
Any such investigation shall comply with the laws of the United
States and the policies and procedures of the appropriate
Federal banking agency.
(C) Factors to consider
In deciding whether to provide assistance under this
paragraph, the appropriate Federal banking agency shall
consider -
(i) whether the requesting authority has agreed to provide
reciprocal assistance with respect to banking matters within
the jurisdiction of any appropriate Federal banking agency;
and
(ii) whether compliance with the request would prejudice
the public interest of the United States.
(D) Treatment of foreign banking authority
For purposes of any Federal law or appropriate Federal
banking agency regulation relating to the collection or
transfer of information by any appropriate Federal banking
agency, the foreign banking authority shall be treated as
another appropriate Federal banking agency.
(3) Rule of construction
Paragraphs (1) and (2) shall not be construed to limit the
authority of an appropriate Federal banking agency or any other
Federal agency to provide or receive assistance or information to
or from any foreign authority with respect to any matter.
(w) Termination of insurance for money laundering or cash
transaction reporting offenses
(1) In general
(A) Conviction of title 18 offenses
(i) Duty to notify
If an insured State depository institution has been
convicted of any criminal offense under section 1956 or 1957
of title 18, the Attorney General shall provide to the
Corporation a written notification of the conviction and
shall include a certified copy of the order of conviction
from the court rendering the decision.
(ii) Notice of termination; pretermination hearing
After receipt of written notification from the Attorney
General by the Corporation of such a conviction, the Board of
Directors shall issue to the insured depository institution a
notice of its intention to terminate the insured status of
the insured depository institution and schedule a hearing on
the matter, which shall be conducted in all respects as a
termination hearing pursuant to paragraphs (3) through (5) of
subsection (a) of this section.
(B) Conviction of title 31 offenses
If an insured State depository institution is convicted of
any criminal offense under section 5322 or 5324 of title 31
after receipt of written notification from the Attorney General
by the Corporation, the Board of Directors may initiate
proceedings to terminate the insured status of the insured
depository institution in the manner described in subparagraph
(A).
(C) Notice to State supervisor
The Corporation shall simultaneously transmit a copy of any
notice issued under this paragraph to the appropriate State
financial institutions supervisor.
(2) Factors to be considered
In determining whether to terminate insurance under paragraph
(1), the Board of Directors shall take into account the following
factors:
(A) The extent to which directors or senior executive
officers of the depository institution knew of, or were
involved in, the commission of the money laundering offense of
which the institution was found guilty.
(B) The extent to which the offense occurred despite the
existence of policies and procedures within the depository
institution which were designed to prevent the occurrence of
any such offense.
(C) The extent to which the depository institution has fully
cooperated with law enforcement authorities with respect to the
investigation of the money laundering offense of which the
institution was found guilty.
(D) The extent to which the depository institution has
implemented additional internal controls (since the commission
of the offense of which the depository institution was found
guilty) to prevent the occurrence of any other money laundering
offense.
(E) The extent to which the interest of the local community
in having adequate deposit and credit services available would
be threatened by the termination of insurance.
(3) Notice to State banking supervisor and public
When the order to terminate insured status initiated pursuant
to this subsection is final, the Board of Directors shall -
(A) notify the State banking supervisor of any State
depository institution described in paragraph (1) and the
Office of Thrift Supervision, where appropriate, at least 10
days prior to the effective date of the order of termination of
the insured status of such depository institution, including a
State branch of a foreign bank; and
(B) publish notice of the termination of the insured status
of the depository institution in the Federal Register.
(4) Temporary insurance of previously insured deposits
Upon termination of the insured status of any State depository
institution pursuant to paragraph (1), the deposits of such
depository institution shall be treated in accordance with
subsection (a)(7) of this section.
(5) Successor liability
This subsection shall not apply to a successor to the interests
of, or a person who acquires, an insured depository institution
that violated a provision of law described in paragraph (1), if
the successor succeeds to the interests of the violator, or the
acquisition is made, in good faith and not for purposes of
evading this subsection or regulations prescribed under this
subsection.
(6) "Senior executive officer" defined
The term "senior executive officer" has the same meaning as in
regulations prescribed under section 1831i(f) of this title.