[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1818]
TITLE 12--BANKS AND BANKING
CHAPTER 16--FEDERAL DEPOSIT INSURANCE CORPORATION
Sec. 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,
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\1\ See References in Text note below.
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 the agency in
connection with the granting of any application or other request by the
depository institution or any written agreement entered into with the
agency, the agency 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 and subsections (c) through (s) and subsection
(u) of this section 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).
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\2\ See References in Text note below.
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(4) This subsection and subsections (c) through (s) and subsection
(u) of this section 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.
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\3\ So in original.
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(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 the
appropriate Federal banking agency in connection with the
grant of any application or other request by such depository
institution; 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 agency 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; or
(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.],
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. In any action brought under this section by the Comptroller
of the Currency in respect to any such party with respect to a national
banking association or a District depository institution, the findings
and conclusions of the Administrative Law Judge shall be certified to
the Board of Governors of the Federal Reserve System for the
determination of whether any order shall issue. 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 or removal of institution-affiliated party charged with
felony
(1) Suspension or prohibition.--
(A) In general.--Whenever any institution-affiliated party is
charged in any information, indictment, or complaint, with 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 may pose a threat to the interests of
the depository institution's depositors or may threaten to impair
public confidence in the depository institution, 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 the depository institution.
(B) Provisions applicable to notice.--
(i) Copy.--A copy of any notice under subparagraph (A) shall
also be served upon the depository institution.
(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 may pose a threat to the interests
of the depository institution's depositors or may threaten to
impair public confidence in the depository institution, 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 the 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 the
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 the depository institution, 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.
(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.
---------------------------------------------------------------------------
\4\ So in original. Probably should be ``depository institution's''.
---------------------------------------------------------------------------
(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 the
appropriate Federal banking agency in connection with the grant
of any application or other request by such depository
institution; 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 and proceed under this section against any such party,
if such notice 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 semiannual 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 semiannual
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 sa
