12 USC 4636a - Removal and prohibition authority

U.S Code last checked for updates: Apr 29, 2024

§ 4636a.

Removal and prohibition authority

(a)

Authority to issue order

(1)

In general

(2)

Applicability

A party described in this paragraph is an entity-affiliated party or any officer, director, or management of the Office of Finance, if the Director determines that—

(A)

that party, officer, or director 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 Director in connection with the grant of any application or other request by such regulated entity; or

(IV)

any written agreement between such regulated entity and the Director;

(ii)

engaged or participated in any unsafe or unsound practice in connection with any regulated entity 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 subparagraph (A)—

(i)

such regulated entity or business institution has suffered or will probably suffer financial loss or other damage; or

(ii)

such party has received financial gain or other benefit; and

(C)

the violation, practice, or breach described in subparagraph (A)—

(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 regulated entity or business institution.

(b)

Suspension order

(1)

Suspension or prohibition authority

If the Director serves written notice under subsection (a) upon a party subject to that subsection (a), the Director may, by order, suspend or remove such party from office, or prohibit such party from further participation in any manner in the conduct of the affairs of the regulated entity, if the Director—

(A)

determines that such action is necessary for the protection of the regulated entity; and

(B)

serves such party with written notice of the order.

(2)

Effective period

Any order issued under this subsection—

(A)

shall become effective upon service; and

(B)

unless a court issues a stay of such order under subsection (g), shall remain in effect and enforceable until—

(i)

the date on which the Director dismisses the charges contained in the notice served under subsection (a) with respect to such party; or

(ii)

the effective date of an order issued under subsection (b).

(3)

Copy of order

(c)

Notice, hearing, and order

(1)

Notice

(2)

Timing of hearing

A hearing shall be fixed for a date not earlier than 30 days, nor later than 60 days, after the date of service of notice under subsection (a), unless an earlier or a later date is set by the Director at the request of—

(A)

the party receiving such notice, and good cause is shown; or

(B)

the Attorney General of the United States.

(3)

Consent

(4)

Issuance of order of suspension

The Director may issue an order under this section, as the Director may deem appropriate, if—

(A)

a party is deemed to have consented to the issuance of an order under paragraph (3); or

(B)

upon the record made at the hearing, the Director finds that any of the grounds specified in the notice have been established.

(5)

Effectiveness of order

(d)

Prohibition of certain specific activities

Any person subject to an order issued under this section shall not—

(1)

participate in any manner in the conduct of the affairs of any regulated entity or the Office of Finance;

(2)

solicit, procure, transfer, attempt to transfer, vote, or attempt to vote any proxy, consent, or authorization with respect to any voting rights in any regulated entity;

(3)

violate any voting agreement previously approved by the Director; or

(4)

vote for a director, or serve or act as an entity-affiliated party of a regulated entity or as an officer or director of the Office of Finance.

(e)

Industry-wide prohibition

(1)

In general

(2)

Exception if Director provides written consent

(3)

Violation of paragraph (1) treated as violation of order

(f)

Applicability

(g)

Stay of suspension and prohibition of entity-affiliated party

(h)

Suspension or removal of entity-affiliated party charged with felony

(1)

Suspension or prohibition

(A)

In general

(B)

Provisions applicable to notice

(i)

Copy

(ii)

Effective period

(2)

Removal or prohibition

(A)

In general

(B)

Provisions applicable to order

(i)

Copy

(ii)

Effect of acquittal

(iii)

Effective period

(3)

Authority of remaining board members

(A)

In general

(B)

Appointment of temporary directors

(4)

Hearing regarding continued participation

(A)

In general

(B)

Timing and form of hearing

(C)

Determination

(5)

Rules

(Pub. L. 102–550, title XIII, § 1377, as added Pub. L. 110–289, div. A, title I, § 1153(a)(2), July 30, 2008, 122 Stat. 2770.)

cite as: 12 USC 4636a