12 U.S.C. § 1820 : US Code - Section 1820: Administration of Corporation

Search 12 U.S.C. § 1820 : US Code - Section 1820: Administration of Corporation

(a) Board of Directors; use of mails; cooperation with other
Federal agencies
The Board of Directors shall administer the affairs of the
Corporation fairly and impartially and without discrimination. The
Board of Directors of the Corporation shall determine and prescribe
the manner in which its obligations shall be incurred and its
expenses allowed and paid. The Corporation shall be entitled to the
free use of the United States mails in the same manner as the
executive departments of the Government. The Corporation with the
consent of any Federal Reserve bank or of any board, commission,
independent establishment, or executive department of the
Government, including any field service thereof, may avail itself
of the use of information, services, and facilities thereof in
carrying out the provisions of this chapter.
(b) Examinations
(1) Appointment of examiners and claims agents
The Board of Directors shall appoint examiners and claims
agents.
(2) Regular examinations
Any examiner appointed under paragraph (1) shall have power, on
behalf of the Corporation, to examine -
(A) any insured State nonmember bank or insured State branch
of any foreign bank;
(B) any depository institution which files an application
with the Corporation to become an insured depository
institution; and
(C) any insured depository institution in default,
whenever the Board of Directors determines an examination of any
such depository institution is necessary.
(3) Special examination of any insured depository institution
In addition to the examinations authorized under paragraph (2),
any examiner appointed under paragraph (1) shall have power, on
behalf of the Corporation, to make any special examination of any
insured depository institution whenever the Board of Directors
determines a special examination of any such depository
institution is necessary to determine the condition of such
depository institution for insurance purposes.
(4) Examination of affiliates
(A) In general
In making any examination under paragraph (2) or (3), any
examiner appointed under paragraph (1) shall have power, on
behalf of the Corporation, to make such examinations of the
affairs of any affiliate of any depository institution as may
be necessary to disclose fully -
(i) the relationship between such depository institution
and any such affiliate; and
(ii) the effect of such relationship on the depository
institution.
(B) Commitment by foreign banks to allow examinations of
affiliates
No branch or depository institution subsidiary of a foreign
bank may become an insured depository institution unless such
foreign bank submits a written binding commitment to the Board
of Directors to permit any examination of any affiliate of such
branch or depository institution subsidiary pursuant to
subparagraph (A) to the extent determined by the Board of
Directors to be necessary to carry out the purposes of this
chapter.
(5) Examination of insured State branches
The Board of Directors shall -
(A) coordinate examinations of insured State branches of
foreign banks with examinations conducted by the Board of
Governors of the Federal Reserve System under section
3105(c)(1) of this title; and
(B) to the extent possible, participate in any simultaneous
examination of the United States operations of a foreign bank
requested by the Board under such section.
(6) Power and duty of examiners
Each examiner appointed under paragraph (1) shall -
(A) have power to make a thorough examination of any insured
depository institution or affiliate under paragraph (2), (3),
(4), or (5); and
(B) shall make a full and detailed report of condition of any
insured depository institution or affiliate examined to the
Corporation.
(7) Power of claim agents
Each claim agent appointed under paragraph (1) shall have power
to investigate and examine all claims for insured deposits.
(c) Administration of oaths and affirmations; evidence; subpena
powers
In connection with examinations of insured depository
institutions and any State nonmember bank, savings association, or
other institution making application to become insured depository
institutions, and affiliates thereof, or with other types of
investigations to determine compliance with applicable law and
regulations, the appropriate Federal banking agency, or its
designated representatives, are authorized to administer oaths and
affirmations, and to examine and to take and preserve testimony
under oath as to any matter in respect to the affairs or ownership
of any such bank or institution or affiliate thereof, and to
exercise such other powers as are set forth in section 1818(n) of
this title.
(d) Annual on-site examinations of all insured depository
institutions required
(1) In general
The appropriate Federal banking agency shall, not less than
once during each 12-month period, conduct a full-scope, on-site
examination of each insured depository institution.
(2) Examinations by Corporation
Paragraph (1) shall not apply during any 12-month period in
which the Corporation has conducted a full-scope, on-site
examination of the insured depository institution.
(3) State examinations acceptable
The examinations required by paragraph (1) may be conducted in
alternate 12-month periods, as appropriate, if the appropriate
Federal banking agency determines that an examination of the
insured depository institution conducted by the State during the
intervening 12-month period carries out the purpose of this
subsection.
(4) 18-month rule for certain small institutions
Paragraphs (1), (2), and (3) shall apply with "18-month"
substituted for "12-month" if -
(A) the insured depository institution has total assets of
less than $500,000,000;
(B) the institution is well capitalized, as defined in
section 1831o of this title;
(C) when the institution was most recently examined, it was
found to be well managed, and its composite condition -
(i) was found to be outstanding; or
(ii) was found to be outstanding or good, in the case of an
insured depository institution that has total assets of not
more than $100,000,000;
(D) the insured institution is not currently subject to a
formal enforcement proceeding or order by the Corporation or
the appropriate Federal banking agency; and
(E) no person acquired control of the institution during the
12-month period in which a full-scope, on-site examination
would be required but for this paragraph.
(5) Certain Government-controlled institutions exempted
Paragraph (1) does not apply to -
(A) any institution for which the Corporation or the
Resolution Trust Corporation is conservator; or
(B) any bridge bank, none of the voting securities of which
are owned by a person or agency other than the Corporation or
the Resolution Trust Corporation.
(6) Coordinated examinations
To minimize the disruptive effects of examinations on the
operations of insured depository institutions -
(A) each appropriate Federal banking agency shall, to the
extent practicable and consistent with principles of safety and
soundness and the public interest -
(i) coordinate examinations to be conducted by that agency
at an insured depository institution and its affiliates;
(ii) coordinate with the other appropriate Federal banking
agencies in the conduct of such examinations;
(iii) work to coordinate with the appropriate State bank
supervisor -
(I) the conduct of all examinations made pursuant to this
subsection; and
(II) the number, types, and frequency of reports required
to be submitted to such agencies and supervisors by insured
depository institutions, and the type and amount of
information required to be included in such reports; and
(iv) use copies of reports of examinations of insured
depository institutions made by any other Federal banking
agency or appropriate State bank supervisor to eliminate
duplicative requests for information; and
(B) not later than 2 years after September 23, 1994, the
Federal banking agencies shall jointly establish and implement
a system for determining which one of the Federal banking
agencies or State bank supervisors shall be the lead agency
responsible for managing a unified examination of each insured
depository institution and its affiliates, as required by this
subsection.
(7) Separate examinations permitted
Notwithstanding paragraph (6), each appropriate Federal banking
agency may conduct a separate examination in an emergency or
under other exigent circumstances, or when the agency believes
that a violation of law may have occurred.
(8) Report
At the time the system provided for in paragraph (6) is
established, the Federal banking agencies shall submit a joint
report describing the system to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Banking, Finance and Urban Affairs of the House of
Representatives. Thereafter, the Federal banking agencies shall
annually submit a joint report to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Banking, Finance and Urban Affairs of the House of
Representatives regarding the progress of the agencies in
implementing the system and indicating areas in which
enhancements to the system, including legislature improvements,
would be appropriate.
(9) Standards for determining adequacy of State examinations
The Federal Financial Institutions Examination Council shall
issue guidelines establishing standards to be used at the
discretion of the appropriate Federal banking agency for purposes
of making a determination under paragraph (3).
(10) Agencies authorized to increase maximum asset amount of
institutions for certain purposes
At any time after the end of the 2-year period beginning on
September 23, 1994, the appropriate Federal banking agency, in
the agency's discretion, may increase the maximum amount
limitation contained in paragraph (4)(C)(ii), by regulation, from
$100,000,000 to an amount not to exceed $500,000,000 for purposes
of such paragraph, if the agency determines that the greater
amount would be consistent with the principles of safety and
soundness for insured depository institutions.
(e) Examination fees
(1) Regular and special examinations of depository institutions
The cost of conducting any regular examination or special
examination of any depository institution under subsection
(b)(2), (b)(3), or (d) of this section may be assessed by the
Corporation against the institution to meet the Corporation's
expenses in carrying out such examinations.
(2) Examination of affiliates
The cost of conducting any examination of any affiliate of any
insured depository institution under subsection (b)(4) of this
section may be assessed by the Corporation against each affiliate
which is examined to meet the Corporation's expenses in carrying
out such examination.
(3) Assessment against depository institution in case of
affiliate's refusal to pay
(A) In general
Subject to subparagraph (B), if any affiliate of any insured
depository institution -
(i) refuses to pay any assessment under paragraph (2); or
(ii) fails to pay any such assessment before the end of the
60-day period beginning on the date the affiliate receives
notice of the assessment,
the Corporation may assess such cost against, and collect such
cost from, the depository institution.
(B) Affiliate of more than 1 depository institution
If any affiliate referred to in subparagraph (A) is an
affiliate of more than 1 insured depository institution, the
assessment under subparagraph (A) may be assessed against the
depository institutions in such proportions as the Corporation
determines to be appropriate.
(4) Civil money penalty for affiliate's refusal to cooperate
(A) Penalty imposed
If any affiliate of any insured depository institution -
(i) refuses to permit an examiner appointed by the Board of
Directors under subsection (b)(1) of this section to conduct
an examination; or
(ii) refuses to provide any information required to be
disclosed in the course of any examination,
the depository institution shall forfeit and pay a penalty of
not more than $5,000 for each day that any such refusal
continues.
(B) Assessment and collection
Any penalty imposed under subparagraph (A) shall be assessed
and collected by the Corporation in the manner provided in
section 1818(i)(2) of this title.
(5) Deposits of examination assessment
Amounts received by the Corporation under this subsection
(other than paragraph (4)) may be deposited in the manner
provided in section 1823 of this title.
(f) Preservation of agency records
(1) In general
A Federal banking agency may cause any and all records, papers,
or documents kept by the agency or in the possession or custody
of the agency to be -
(A) photographed or microphotographed or otherwise reproduced
upon film; or
(B) preserved in any electronic medium or format which is
capable of -
(i) being read or scanned by computer; and
(ii) being reproduced from such electronic medium or format
by printing any other form of reproduction of electronically
stored data.
(2) Treatment as original records
Any photographs, microphotographs, or photographic film or
copies thereof described in paragraph (1)(A) or reproduction of
electronically stored data described in paragraph (1)(B) shall be
deemed to be an original record for all purposes, including
introduction in evidence in all State and Federal courts or
administrative agencies, and shall be admissible to prove any
act, transaction, occurrence, or event therein recorded.
(3) Authority of the Federal banking agencies
Any photographs, microphotographs, or photographic film or
copies thereof described in paragraph (1)(A) or reproduction of
electronically stored data described in paragraph (1)(B) shall be
preserved in such manner as the Federal banking agency shall
prescribe, and the original records, papers, or documents may be
destroyed or otherwise disposed of as the Federal banking agency
may direct.
(g) Authority to prescribe regulations and definitions
Except to the extent that authority under this chapter is
conferred on any of the Federal banking agencies other than the
Corporation, the Corporation may -
(1) prescribe regulations to carry out this chapter; and
(2) by regulation define terms as necessary to carry out this
chapter.
(h) Coordination of examination authority
(1) State bank supervisors of home and host States
(A) Home State of bank
The appropriate State bank supervisor of the home State of an
insured State bank has authority to examine and supervise the
bank.
(B) Host State branches
The State bank supervisor of the home State of an insured
State bank and any State bank supervisor of an appropriate host
State shall exercise its respective authority to supervise and
examine the branches of the bank in a host State in accordance
with the terms of any applicable cooperative agreement between
the home State bank supervisor and the State bank supervisor of
the relevant host State.
(C) Supervisory fees
Except as expressly provided in a cooperative agreement
between the State bank supervisors of the home State and any
host State of an insured State bank, only the State bank
supervisor of the home State of an insured State bank may levy
or charge State supervisory fees on the bank.
(2) Host State examination
(A) In general
With respect to a branch operated in a host State by an out-
of-State insured State bank that resulted from an interstate
merger transaction approved under section 1831u of this title,
or that was established in such State pursuant to section 36(g)
of this title, the third undesignated paragraph of section 321
of this title or section 1828(d)(4) of this title, the
appropriate State bank supervisor of such host State may -
(i) with written notice to the State bank supervisor of the
bank's home State and subject to the terms of any applicable
cooperative agreement with the State bank supervisor of such
home State, examine such branch for the purpose of
determining compliance with host State laws that are
applicable pursuant to section 1831a(j) of this title,
including those that govern community reinvestment, fair
lending, and consumer protection; and
(ii) if expressly permitted under and subject to the terms
of a cooperative agreement with the State bank supervisor of
the bank's home State or if such out-of-State insured State
bank has been determined to be in a troubled condition by
either the State bank supervisor of the bank's home State or
the bank's appropriate Federal banking agency, participate in
the examination of the bank by the State bank supervisor of
the bank's home State to ascertain that the activities of the
branch in such host State are not conducted in an unsafe or
unsound manner.
(B) Notice of determination
(i) In general
The State bank supervisor of the home State of an insured
State bank shall notify the State bank supervisor of each
host State of the bank if there has been a final
determination that the bank is in a troubled condition.
(ii) Timing of notice
The State bank supervisor of the home State of an insured
State bank shall provide notice under clause (i) as soon as
is reasonably possible, but in all cases not later than 15
business days after the date on which the State bank
supervisor has made such final determination or has received
written notification of such final determination.
(3) Host State enforcement
If the State bank supervisor of a host State determines that a
branch of an out-of-State insured State bank is violating any law
of the host State that is applicable to such branch pursuant to
section 1831a(j) of this title, including a law that governs
community reinvestment, fair lending, or consumer protection, the
State bank supervisor of the host State or, to the extent
authorized by the law of the host State, a host State law
enforcement officer may, with written notice to the State bank
supervisor of the bank's home State and subject to the terms of
any applicable cooperative agreement with the State bank
supervisor of the bank's home State, undertake such enforcement
actions and proceedings as would be permitted under the law of
the host State as if the branch were a bank chartered by that
host State.
(4) Cooperative agreement
(A) In general
The State bank supervisors from 2 or more States may enter
into cooperative agreements to facilitate State regulatory
supervision of State banks, including cooperative agreements
relating to the coordination of examinations and joint
participation in examinations.
(B) Definition
For purposes of this subsection, the term "cooperative
agreement" means a written agreement that is signed by the home
State bank supervisor and the host State bank supervisor to
facilitate State regulatory supervision of State banks, and
includes nationwide or multi-State cooperative agreements and
cooperative agreements solely between the home State and host
State.
(C) Rule of construction
Except for State bank supervisors, no provision of this
subsection relating to such cooperative agreements shall be
construed as limiting in any way the authority of home State
and host State law enforcement officers, regulatory
supervisors, or other officials that have not signed such
cooperative agreements to enforce host State laws that are
applicable to a branch of an out-of-State insured State bank
located in the host State pursuant to section 1831a(j) of this
title.
(5) Federal regulatory authority
No provision of this subsection shall be construed as limiting
in any way the authority of any Federal banking agency.
(6) State taxation authority not affected
No provision of this subsection shall be construed as affecting
the authority of any State or political subdivision of any State
to adopt, apply, or administer any tax or method of taxation to
any bank, bank holding company, or foreign bank, or any affiliate
of any bank, bank holding company, or foreign bank, to the extent
that such tax or tax method is otherwise permissible by or under
the Constitution of the United States or other Federal law.
(7) Definitions
For purpose of this section, the following definitions shall
apply:
(A) Host State, home State, out-of-State bank
The terms "host State", "home State", and "out-of-State bank"
have the same meanings as in section 1831u(g) of this title.
(B) State supervisory fees
The term "State supervisory fees" means assessments,
examination fees, branch fees, license fees, and all other fees
that are levied or charged by a State bank supervisor directly
upon an insured State bank or upon branches of an insured State
bank.
(C) Troubled condition
Solely for purposes of paragraph (2)(B), an insured State
bank has been determined to be in "troubled condition" if the
bank -
(i) has a composite rating, as determined in its most
recent report of examination, of 4 or 5 under the Uniform
Financial Institutions Ratings System;
(ii) is subject to a proceeding initiated by the
Corporation for termination or suspension of deposit
insurance; or
(iii) is subject to a proceeding initiated by the State
bank supervisor of the bank's home State to vacate, revoke,
or terminate the charter of the bank, or to liquidate the
bank, or to appoint a receiver for the bank.
(D) Final determination
For purposes of paragraph (2)(B), the term "final
determination" means the transmittal of a report of examination
to the bank or transmittal of official notice of proceedings to
the bank.
(i) Flood insurance compliance by insured depository institutions
(1) Examinations
The appropriate Federal banking agency shall, during each
scheduled on-site examination required by this section, determine
whether the insured depository institution is complying with the
requirements of the national flood insurance program.
(2) Report
(A) Requirement
Not later than 1 year after September 23, 1994, and
biennially thereafter for the next 4 years, each appropriate
Federal banking agency shall submit a report to the Congress on
compliance by insured depository institutions with the
requirements of the national flood insurance program.
(B) Contents
Each report submitted under this paragraph shall include a
description of the methods used to determine compliance, the
number of institutions examined during the reporting year, a
listing and total number of institutions found not to be in
compliance, actions taken to correct incidents of
noncompliance, and an analysis of compliance, including a
discussion of any trends, patterns, and problems, and
recommendations regarding reasonable actions to improve the
efficiency of the examinations processes.
(j) Consultation among examiners
(1) In general
Each appropriate Federal banking agency shall take such action
as may be necessary to ensure that examiners employed by the
agency -
(A) consult on examination activities with respect to any
depository institution; and
(B) achieve an agreement and resolve any inconsistencies in
the recommendations to be given to such institution as a
consequence of any examinations.
(2) Examiner-in-charge
Each appropriate Federal banking agency shall consider
appointing an examiner-in-charge with respect to a depository
institution to ensure consultation on examination activities
among all of the examiners of that agency involved in
examinations of the institution.
(k) One-year restrictions on Federal examiners of financial
institutions
(1) In general
In addition to other applicable restrictions set forth in title
18, the penalties set forth in paragraph (6) of this subsection
shall apply to any person who -
(A) was an officer or employee (including any special
Government employee) of a Federal banking agency or a Federal
reserve bank;
(B) served 2 or more months during the final 12 months of his
or her employment with such agency or entity as the senior
examiner (or a functionally equivalent position) of a
depository institution or depository institution holding
company with continuing, broad responsibility for the
examination (or inspection) of that depository institution or
depository institution holding company on behalf of the
relevant agency or Federal reserve bank; and
(C) within 1 year after the termination date of his or her
service or employment with such agency or entity, knowingly
accepts compensation as an employee, officer, director, or
consultant from -
(i) such depository institution, any depository institution
holding company that controls such depository institution, or
any other company that controls such depository institution;
or
(ii) such depository institution holding company or any
depository institution that is controlled by such depository
institution holding company.
(2) Definitions
For purposes of this subsection -
(A) the term "depository institution" includes an uninsured
branch or agency of a foreign bank, if such branch or agency is
located in any State; and
(B) the term "depository institution holding company"
includes any foreign bank or company described in section
3106(a) of this title.
(3) Rules of construction
For purposes of this subsection, a foreign bank shall be deemed
to control any branch or agency of the foreign bank, and a person
shall be deemed to act as a consultant for a depository
institution, depository institution holding company, or other
company, only if such person directly works on matters for, or on
behalf of, such depository institution, depository institution
holding company, or other company.
(4) Regulations
(A) In general
Each Federal banking agency shall prescribe rules or
regulations to administer and carry out this subsection,
including rules, regulations, or guidelines to define the scope
of persons referred to in paragraph (1)(B).
(B) Consultation required
The Federal banking agencies shall consult with each other
for the purpose of assuring that the rules and regulations
issued by the agencies under subparagraph (A) are, to the
extent possible, consistent, comparable, and practicable,
taking into account any differences in the supervisory programs
utilized by the agencies for the supervision of depository
institutions and depository institution holding companies.
(5) Waiver
(A) Agency authority
A Federal banking agency may grant a waiver, on a case by
case basis, of the restriction imposed by this subsection to
any officer or employee (including any special Government
employee) of that agency, and the Board of Governors of the
Federal Reserve System may grant a waiver of the restriction
imposed by this subsection to any officer or employee of a
Federal reserve bank, if the head of such agency certifies in
writing that granting the waiver would not affect the integrity
of the supervisory program of the relevant Federal banking
agency.
(B) Definition
For purposes of this paragraph, the head of an agency is -
(i) the Comptroller of the Currency, in the case of the
Office of the Comptroller of the Currency;
(ii) the Chairman of the Board of Governors of the Federal
Reserve System, in the case of the Board of Governors of the
Federal Reserve System;
(iii) the Chairperson of the Board of Directors, in the
case of the Corporation; and
(iv) the Director of the Office of Thrift Supervision, in
the case of the Office of Thrift Supervision.
(6) Penalties
(A) In general
In addition to any other administrative, civil, or criminal
remedy or penalty that may otherwise apply, whenever a Federal
banking agency determines that a person subject to paragraph
(1) has become associated, in the manner described in paragraph
(1)(C), with a depository institution, depository institution
holding company, or other company for which such agency serves
as the appropriate Federal banking agency, the agency shall
impose upon such person one or more of the following penalties:
(i) Industry-wide prohibition order
The Federal banking agency shall serve a written notice or
order in accordance with and subject to the provisions of
section 1818(e)(4) of this title for written notices or
orders under paragraph (1) or (2) of section 1818(e) of this
title, upon such person of the intention of the agency -
(I) to remove such person from office or to prohibit such
person from further participation in the conduct of the
affairs of the depository institution, depository
institution holding company, or other company for a period
of up to 5 years; and
(II) to prohibit any further participation by such
person, in any manner, in the conduct of the affairs of any
insured depository institution for a period of up to 5
years.
(ii) Civil monetary penalty
The Federal banking agency may, in an administrative
proceeding or civil action in an appropriate United States
district court, impose on such person a civil monetary
penalty of not more than $250,000. Any administrative
proceeding under this clause shall be conducted in accordance
with section 1818(i) of this title. In lieu of an action by
the Federal banking agency under this clause, the Attorney
General of the United States may bring a civil action under
this clause in the appropriate United States district court.
(B) Scope of prohibition order
Any person subject to an order issued under subparagraph
(A)(i) shall be subject to paragraphs (6) and (7) of section
1818(e) of this title in the same manner and to the same extent
as a person subject to an order issued under such section.
(C) Definitions
Solely for purposes of this paragraph, the "appropriate
Federal banking agency" for a company that is not a depository
institution or depository institution holding company shall be
the Federal banking agency on whose behalf the person described
in paragraph (1) performed the functions described in paragraph
(1)(B).