12 USC 4636 - Civil money penalties

U.S Code last checked for updates: Apr 28, 2024

§ 4636.

Civil money penalties

(a)

In general

(b)

Amount of penalty

(1)

First tier

A regulated entity or entity-affiliated party shall forfeit and pay a civil penalty of not more than $10,000 for each day during which a violation continues, if such regulated entity or party—

(A)

violates any provision of this chapter, the authorizing statutes, or any order, condition, rule, or regulation under this chapter or any authorizing statute;

(B)

violates any final or temporary order or notice issued pursuant to this chapter;

(C)

violates any condition imposed in writing by the Director in connection with the grant of any application or other request by such regulated entity; or

(D)

violates any written agreement between the regulated entity and the Director.

(2)

Second tier

Notwithstanding paragraph (1), a regulated entity or entity-affiliated party shall forfeit and pay a civil penalty of not more than $50,000 for each day during which a violation, practice, or breach continues, if—

(A)

the regulated entity or entity-affiliated party, respectively—

(i)

commits any violation described in any subparagraph of paragraph (1);

(ii)

recklessly engages in an unsafe or unsound practice in conducting the affairs of the regulated entity; or

(iii)

breaches any fiduciary duty; and

(B)

the 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 the regulated entity; or

(iii)

results in pecuniary gain or other benefit to such party.

(3)

Third tier

Notwithstanding paragraphs (1) and (2), any regulated entity or entity-affiliated party shall forfeit and pay a civil penalty in an amount not to exceed the applicable maximum amount determined under paragraph (4) for each day during which such violation, practice, or breach continues, if such regulated entity or entity-affiliated party—

(A)

knowingly—

(i)

commits any violation described in any subparagraph of paragraph (1);

(ii)

engages in any unsafe or unsound practice in conducting the affairs of the regulated entity; or

(iii)

breaches any fiduciary duty; and

(B)

knowingly or recklessly causes a substantial loss to the regulated entity or a substantial pecuniary gain or other benefit to such party by reason of such violation, practice, or breach.

(4)

Maximum amounts of penalties for any violation described in paragraph (3)

The maximum daily amount of any civil penalty which may be assessed pursuant to paragraph (3) for any violation, practice, or breach described in paragraph (3) is—

(A)

in the case of any entity-affiliated party, an amount not to exceed $2,000,000; and

(B)

in the case of any regulated entity, $2,000,000.

(c)

Procedures

(1)

Establishment

The Director shall establish standards and procedures governing the imposition of civil money penalties under subsections (a) and (b). Such standards and procedures—

(A)

shall provide for the Director to notify the regulated entity or entity-affiliated party in writing of the Director’s determination to impose the penalty, which shall be made on the record;

(B)

shall provide for the imposition of a penalty only after the regulated entity, executive officer, or director or entity-affiliated party has been given an opportunity for a hearing on the record pursuant to section 4633 of this title; and

(C)

may provide for review by the Director of any determination or order, or interlocutory ruling, arising from a hearing.

(2)

Factors in determining amount of penalty

(3)

Review of imposition of penalty

(d)

Action to collect penalty

(e)

Settlement by Director

(f)

Availability of other remedies

(g)

Prohibition of reimbursement or indemnification

(h)

Deposit of penalties

(i)

Applicability

(Pub. L. 102–550, title XIII, § 1376, Oct. 28, 1992, 106 Stat. 3991; Pub. L. 110–289, div. A, title I, § 1155, July 30, 2008, 122 Stat. 2775.)

cite as: 12 USC 4636