From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1786]
TITLE 12--BANKS AND BANKING
CHAPTER 14--FEDERAL CREDIT UNIONS
SUBCHAPTER II--SHARE INSURANCE
Sec. 1786. Termination of insured credit union status; cease and
desist orders; removal or suspension from office; procedure
(a) Termination of insurance
(1) Any insured credit union other than a Federal credit union may,
upon not less than ninety days' written notice to the Board and upon the
affirmative vote of a majority of its members within one year prior to
the giving of such notice, terminate its status as an insured credit
union.
(2) Any insured credit union, other than a Federal credit union,
which has obtained a new certificate of insurance from a corporation
authorized and duly licensed to insure member accounts may upon not less
than ninety days' written notice to the Board convert from status as an
insured credit union under this chapter: Provided, That at the time of
giving notice to the Board the provisions of paragraph (b)(1) of this
section are not being invoked against the credit union.
(b) Unsound condition of credit union; notice to correct condition;
hearing; judicial review
(1) Whenever, in the opinion of the Board, any insured credit union
is engaging or has engaged in unsafe or unsound practices in conducting
the business of such credit union, or is in an unsafe or unsound
condition to continue operations as an insured credit union, or is
violating or has violated an applicable law, rule, regulation, order, or
any condition imposed in writing by the Board in connection with the
granting of any application or other request by the credit union, or is
violating or has violated any written agreement entered into with the
Board, the Board shall serve upon the credit union a statement with
respect to such practices or conditions or violations for the purpose of
securing the correction thereof. In the case of an insured State-
chartered credit union, the Board shall send a copy of such statement to
the commission, board, or authority, if any, having supervision of such
credit union. Unless such correction shall be made within one hundred
and twenty days after service of such statement, or within such shorter
period of not less than twenty days after such service as the Board
shall require in any case where it determines that the insurance risk
with respect to such credit union could be unduly jeopardized by further
delay in the correction of such practices or conditions or violations,
or as the commission, board, or authority having supervision of such
credit union, if any, shall require in the case of an insured State-
chartered credit union, the Board, if it shall determine to proceed
further, shall give to the credit union not less than thirty days'
written notice of its intention to terminate the status of the credit
union as an insured credit union. Such notice shall contain a statement
of the facts constituting the alleged unsafe and unsound practices or
conditions or violations and shall fix a time and place for a hearing
thereon. 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 Board at the request of the credit
union. Unless the credit union 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 credit union. In the event of
such consent, or if upon the record made at any such hearing the Board
shall find that any unsafe or unsound practice or condition or violation
specified in the notice has been established and has not been corrected
within the time above-prescribed in which to make such correction, the
Board may issue and serve upon the credit union an order terminating its
status as an insured credit union on a date subsequent to the date of
such finding and subsequent to the expiration of the time specified in
the notice.
(2) Any credit union whose insured status has been terminated by
order of the Board 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 (j) of this section.
(c) Notice to members of termination of insured status
In the event of the termination of a credit union's status as an
insured credit union as provided under subsection (a)(1) or (b) of this
section, the credit union shall give prompt and reasonable notice to all
of its members whose accounts are insured that it has ceased to be an
insured credit union. It may include in such notice a statement of the
fact that member accounts insured on the effective date of such
termination, to the extent not withdrawn, remain insured for one year
from the date of such termination, but it shall not further represent
itself in any manner as an insured credit union. In the event of failure
to give the notice as herein provided to members whose accounts are
insured, the Board is authorized to give reasonable notice.
(d) Continuation of insurance for one year; approval of conversion of
status; procedure subsequent to approval; reduction of premium
charges
(1) After the termination of the insured status of any credit union
as provided under subsection (a)(1) or (b) of this section, insurance of
its member accounts to the extent that they were insured on the
effective date of such termination, less any amounts thereafter
withdrawn which reduce the accounts below the amount covered by
insurance on the effective date of such termination, shall continue for
a period of one year, but no shares issued by the credit union or
deposits made after the date of such termination shall be insured by the
Board. The credit union shall continue to maintain its deposit with and
pay premiums to the Board during such period as in the case of an
insured credit union and the Board shall have the right to examine such
credit union from time to time during the period during which such
insurance continues. Such credit union shall, in all other respects, be
subject to the duties and obligations of an insured credit union for the
period of one year from the date of such termination. In the event that
such credit union shall be closed for liquidation within such period of
one year, the Board shall have the same powers and rights with respect
to such credit union as in the case of an insured credit union.
Notwithstanding the above, when an insured credit union's insured status
is terminated and the credit union subsequently obtains comparable
insurance coverage from another source, insurance of its accounts by the
fund may cease immediately upon the effective date of such comparable
coverage by mutual consent of the credit union and the Board.
(2) No credit union shall convert from status as an insured credit
union under this chapter as provided under subsection (a)(2) of this
section until the proposition for such conversion has been approved by a
majority of all the directors of the credit union, and by affirmative
vote of a majority of the members of the credit union who vote on the
proposition in a vote in which at least 20 per centum of the total
membership of the credit union participates. Following approval by the
directors, written notice of the proposition and of the date set for the
membership vote shall be delivered in person to each member, or mailed
to each member at the address for such member appearing on the records
of the credit union, not more than thirty nor less than seven days prior
to such date. The membership shall be given the opportunity to vote by
mail ballot. If the proposition is approved by the membership, prompt
and reasonable notice of insurance conversion shall be given to all
members.
(3) In the event of a conversion of a credit union from status as an
insured credit union under this chapter as provided under subsection
(a)(2) of this section, premium charges payable under section 1782(c) of
this title shall be reduced by an amount proportionate to the number of
calendar months for which the converting credit union will no longer be
insured under this chapter. As long as a converting credit union remains
insured under this chapter it shall remain subject to all of the
provisions of this subchapter.
(e) Opinion of Board as to unsound condition of credit union; notice of
charges; hearing; order to cease and desist; judicial review
(1) If, in the opinion of the Board, any insured credit union,
credit union which has insured accounts, or any institution-affiliated
party is engaging or has engaged, or the Board has reasonable cause to
believe that the credit union or any institution-affiliated party is
about to engage, in an unsafe or unsound practice in conducting the
business of such credit union, or is violating or has violated, or the
Board has reasonable cause to believe that the credit union or any
institution-affiliated party is about to violate, a law, rule, or
regulation, or any condition imposed in writing by the Board in
connection with the granting of any application or other request by the
credit union or any written agreement entered into with the Board, the
Board may issue and serve upon the credit union 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 credit union 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 Board at the
request of any party so served. Unless the party or parties so served
shall appear at the hearing 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 Board shall find that any violation or unsafe
or unsound practice specified in the notice of charges has been
established, the Board may issue and serve upon the credit union 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 credit union 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
credit union 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 Board or a reviewing court.
(3) Affirmative action to correct conditions resulting from
violations or practices.--The authority to issue an order under this
subsection and subsection (f) of this section which requires an insured
credit union or any institution-affiliated party to take affirmative
action to correct any conditions resulting from any violation or
practice with respect to which such order is issued includes the
authority to require such insured credit union or such party to--
(A) make restitution or provide reimbursement, indemnification,
or guarantee against loss if--
(i) such credit union 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
Board;
(B) restrict the growth of the institution;
(C) rescind agreements or contracts;
(D) dispose of any loan or asset involved; and
(E) employ qualified officers or employees (who may be subject
to approval by the Board at the direction of such Board); and
(F) take such other action as the Board determines to be
appropriate.
(4) Authority to limit activities.--The authority to issue an order
under this subsection or subsection (f) of this section includes the
authority to place limitations on the activities or functions of an
insured credit union or any institution-affiliated party.
(f) Temporary cease and desist order; injunctive procedure
(1) Whenever the Board 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 credit union or any
institution-affiliated party pursuant to paragraph (1) of subsection (e)
of this section, or the continuation thereof, is likely to cause
insolvency or significant dissipation of assets or earnings of the
credit union, or is likely to weaken the condition of the credit union
or otherwise prejudice the interests of its insured members prior to the
completion of the proceedings conducted pursuant to paragraph (1) of
subsection (e) of this section, the Board may issue a temporary order
requiring the credit union or such party to cease and desist from any
such violation or practice and to take affirmative action to prevent
such insolvency, dissipation, condition, or prejudice pending completion
of such proceedings. Such order may include any requirement authorized
under subsection (e)(3)(B) of this section. Such order shall become
effective upon service upon the credit union 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 Administration shall dismiss the charges specified in such
notice, or if a cease-and-desist order is issued against the credit
union or such party, until the effective date of such order.
(2) Within ten days after the credit union concerned or any
institution-affiliated party has been served with a temporary cease-and-
desist order, the credit union or such party may apply to the United
States district court for the judicial district in which the home office
of the credit union 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 credit union or such party under
paragraph (1) of subsection (e) 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 (e)(1) of this section specifies, on the basis of
particular facts and circumstances, that an insured credit union's
books and records are so incomplete or inaccurate that the Board is
unable, through the normal supervisory process, to determine the
financial condition of that insured credit union or the details or
purpose of any transaction or transactions that may have a material
effect on the financial condition of that insured credit union, the
Board 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 (e)(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 (e)(1) of this section in connection with the
notice of charges; or
(II) the date the Board determines, by examination or
otherwise, that the insured credit union's books and records
are accurate and reflect the financial condition of the
credit union.
(4) In the case of violation or threatened violation of, or failure
to obey, a temporary cease-and-desist order, the Board may apply to the
United States district court, or the United States court of any
territory, within the jurisdiction of which the principal office of the
credit union 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.
(g) Removal and prohibition authority
(1) Authority to issue order.--Whenever the Board 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 Board in
connection with the grant of any application or other
request by such credit union; or
(IV) any written agreement between such credit union and
the Board;
(ii) engaged or participated in any unsafe or unsound
practice in connection with any insured credit union 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 credit union or business institution has
suffered or will probably suffer financial loss or other damage;
(ii) the interests of the insured credit union's members
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 such party's unfitness to serve as a
director or officer of, or to otherwise participate in the
conduct of the affairs of, an insured credit union,
the Board may serve upon such party a written notice of the Board'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 credit union.
(2) Specific violations.--
(A) In general.--Whenever the Board determines that--
(i) an institution-affiliated party has committed a
violation of any provision of subchapter II of chapter 53 of
title 31, unless such violation was inadvertent or
unintentional;
(ii) an officer or director of an insured credit union has
knowledge that an institution-affiliated party of the insured
credit union has violated any such provision or any provision of
law referred to in subsection (i)(1)(A)(ii) of this section; or
(iii) an officer or director of an insured credit union has
committed any violation of the Depository Institution Management
Interlocks Act [12 U.S.C. 3201 et seq.],
the Board may serve upon such party, officer, or director a written
notice of the Board's intention to remove such officer or director
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 Board 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 Board serves
written notice under paragraph (1) or (2) to any institution-
affiliated party of the Board's intention to issue an order under
such paragraph, the Board may suspend such party from office or
prohibit such party from further participation in any manner in the
conduct of the affairs of the institution, if the Board--
(i) determines that such action is necessary for the
protection of the credit union or the interests of the credit
union's members; and
(ii) serves such person 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
paragraph (6), shall remain in effect and enforceable until--
(I) the date the Board 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 Board
to such person under paragraph (1) or (2).
(C) Copy of order.--If the Board issues a suspension order under
subparagraph (A) to any institution-affiliated party, the Board
shall serve a copy of such order on any insured credit union with
which such party is associated at the time such order is issued.
(4) A notice of intention to remove a director, committee member,
officer, or other person from office or to prohibit his participation in
the conduct of the affairs of an insured credit union, 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 Board at the request of (A) such director,
committee member, or officer or other person, and for good cause shown,
or (B) the Attorney General of the United States. Unless such director,
committee member, officer, or other person shall appear at the hearing
in person or by a duly authorized representative, he 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 Board shall find that any of the grounds specified
in such notice have been established, the Board may issue such orders of
suspension or removal from office, or prohibition from participation in
the conduct of the affairs of the credit union, as it may deem
appropriate. Any such order shall become effective at the expiration of
thirty days after service upon such credit union and the director,
committee member, officer, or other person 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 Board or a reviewing court.
(5) 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.
(6) Within ten days after any director, officer, committee member,
or other person has been suspended from office and/or prohibited from
participation in the conduct of the affairs of an insured credit union
under paragraph (3) of this subsection, such director, officer,
committee member, or other person may apply to the United States
district court for the judicial district in which the principal office
of the credit union 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 director, officer, committee
member, or other person under paragraph (1) or (2) of this subsection,
and such court shall have jurisdiction to stay such suspension and/or
prohibition.
(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 (i) of this section, has been removed or suspended from
office in an insured credit union or prohibited from participating
in the conduct of the affairs of an insured credit union 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
paragraph (3) or (4) of section 1818(b) of this title, or as a
savings association under section 1818(b)(8) \1\ of this title;
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\1\ See References in Text note below.
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(iii) any insured credit union;
(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 credit union, such party receives the written
consent of--
(i) the Board; 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. If any person receives such a written consent
from the Board, the Board shall publicly disclose such consent. If
the agency referred to in clause (ii) grants such a written consent,
such agency shall report such action to the Board 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
(1),\2\ the term ``appropriate Federal financial institutions
regulatory agency'' means--
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\2\ So in original. No subsection (1) has been enacted.
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(i) the appropriate Federal banking agency, as provided in
section 1813(q) of this title;
(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 1752(7)
of this title);
(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 Board specifically finds that it
should apply to a corporation, firm, or other business enterprise.
(h) Board's appointment of conservator; consultation with State;
authority
(1) The Board may, ex parte without notice, appoint itself or
another (including, in the case of a State-chartered insured credit
union, the State official having jurisdiction over the credit union) as
conservator and immediately take possession and control of the business
and assets of any insured credit union in any case in which--
(A) the Board determines that such action is necessary to
conserve the assets of any insured credit union or to protect the
Fund or the interests of the members of such insured credit union;
(B) an insured credit union, by a resolution of its board of
directors, consents to such an action by the Board;
(C) the Attorney General notifies the Board in writing that an
insured credit union has been found guilty of a criminal offense
under section 1956 or 1957 of title 18 or section 5322 or 5324 of
title 31;
(D) there is a willful violation of a cease-and-desist order
which has become final;
(E) there is concealment of books, papers, records, or assets of
the credit union or refusal to submit books, papers, records, or
affairs of the credit union for inspection to any examiner or to any
lawful agent of the Board;
(F) the credit union is significantly undercapitalized, as
defined in section 1790d of this title, and has no reasonable
prospect of becoming adequately capitalized, as defined in section
1790d of this title; or
(G) the credit union is critically undercapitalized, as defined
in section 1790d of this title.
(2)(A) Except as provided in subparagraph (C), in the case of a
State-chartered insured credit union, the authority conferred by
paragraph (1) shall not be exercised without the written approval of the
State official having jurisdiction over the State-chartered credit union
that the grounds specified for such exercise exist.
(B) If such approval has not been received by the Board within 30
days of receipt of notice by the State that the Board has determined
such grounds exist, and the Board has responded in writing to the
State's written reasons, if any, for withholding approval, then the
Board may proceed without State approval only by a unanimous vote of the
Board.
(C) In the case of a State-chartered insured credit union, the
authority conferred by subparagraphs (F) and (G) of paragraph (1) may
not be exercised unless the Board has complied with section 1790d(l) of
this title.
(3) Not later than ten days after the date on which the Board takes
possession and control of the business and assets of an insured credit
union pursuant to paragraph (1), such insured credit union may apply to
the United States district court for the judicial district in which the
principal office of such insured credit union is located or the United
States District Court for the District of Columbia, for an order
requiring the Board to show cause why it should not be enjoined from
continuing such possession and control. Except as provided in this
paragraph, no court may take any action, except at the request of the
Board by regulation or order, to restrain or affect the exercise of
powers or functions of the Board as conservator.
(4) Except as provided in paragraph (3), in the case of a Federal
credit union, the Board may maintain possession and control of the
business and assets of such credit union and may operate such credit
union until such time--
(A) as the Board shall permit such credit union to continue
business subject to such terms and conditions as may be imposed by
the Board; or
(B) as such credit union is liquidated in accordance with the
provisions of section 1787 of this title.
(5) Except as provided in paragraph (3), in the case of an insured
State-chartered credit union, the Board may maintain possession and
control of the business and assets of such credit union and may operate
such credit union until such time--
(A) as the Board shall permit such credit union to continue
business, subject to such terms and conditions as may be imposed by
the Board;
(B) as the Board shall permit the transfer of possession and
control of such credit union to any commission, board, or authority
which has supervisory authority over such credit union and which is
authorized by State law to operate such credit union; or
(C) as such credit union is liquidated in accordance with the
provisions of section 1787 of this title.
(6) The Board may appoint such agents as it considers necessary in
order to assist the Board in carrying out its duties as a conservator
under this subsection.
(7) All expenses incurred by the Board in exercising its authority
under this subsection with respect to any credit union shall be paid out
of the assets of such credit union.
(8) The conservator shall have all the powers of the members, the
directors, the officers, and the committees of the credit union and
shall be authorized to operate the credit union in its own name or to
conserve its assets in the manner and to the extent authorized by the
Board.
(9) The authority granted by this subsection is in addition to all
other authority granted to the Board under this chapter.
(i) Suspension or removal of institution-affiliated party charged with
crime
(1) Suspension or prohibition authorized.--
(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 Board may, if continued service or participation by such party
may pose a threat to the interests of the credit union's members or
may threaten to impair public confidence in the credit union, 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 credit union.
(B) Provisions applicable to notice.--
(i) Copy.--A copy of any notice under subparagraph (A) shall
also be served upon the credit union.
(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 Board.
(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
Board may, if continued service or participation by such party
may pose a threat to the interests of the credit union's members
or may threaten to impair public confidence in the credit union,
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 credit union
without the prior written consent of the Board.
(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 Board 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 credit union without the prior
written consent of the Board.
(D) Provisions applicable to order.--
(i) Copy.--A copy of any order under subparagraph (C) shall
also be served upon such credit union, whereupon such party (if
a director or an officer) shall cease to be a director or
officer of such credit union.
(ii) Effect of acquittal.--A finding of not guilty or other
disposition of the charge shall not preclude the Board from
instituting proceedings after such finding or disposition to
remove such party from office or to prohibit further
participation in credit union affairs, pursuant to paragraph
(1), (2), or (3) of subsection (g) 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 Board.
(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 Federal credit union 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
Federal credit union are suspended pursuant to this section, the Board
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
credit union and their respective successors have been elected by the
members at an annual or special meeting and have taken office. Directors
appointed temporarily by the Board shall, within thirty days following
their appointment, call a special meeting for the election of new
directors, unless during the thirty-day period (A) the regular annual
meeting is scheduled, or (B) the suspensions giving rise to the
appointment of temporary directors are terminated.
(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 Board to show that the continued
service to or participation in the conduct of the affairs of the credit
union by such party does not, or is not likely to, pose a threat to the
interests of the credit union's members or threaten to impair public
confidence in the credit union. Upon receipt of any such request, the
Board 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 the
Board or its designee to submit written materials (or, at the discretion
of the Board, oral testimony) and oral argument. Within sixty days of
such hearing, the Board shall notify such party whether the suspension
or prohibition from participation in any manner in the conduct of the
affairs of the credit union 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 credit union will be rescinded or
otherwise modified. Such notification shall contain a statement of the
basis for the Board's decision, if adverse to such party. The Board is
authorized to prescribe such rules as may be necessary to effectuate the
purposes of this subsection.
(j) Jurisdiction of hearing; procedure; judicial review
(1) Any hearing provided for in this section (other than the hearing
provided for in subsection (i)(3) of this section) shall be held in the
Federal judicial district or in the territory in which the principal
office of the credit union 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 Board 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 (j). Unless a petition for review is timely
filed in a court of appeals of the United States, as provided in
paragraph (2) of this subsection, and thereafter until the record in the
proceeding has been filed as so provided, the Board may at any time,
upon such notice and in such manner as it may deem proper, modify,
terminate, or set aside any such order. Upon such filing of the record,
the Board 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 credit union or the
institution-affiliated party concerned or an order issued under
subsection (i)(1) of this section) by filing in the court of appeals of
the United States for the circuit in which the principal office of the
credit union 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
Board be modified, terminated, or set aside. A copy of such petition
shall be forthwith transmitted by the clerk of the court to the Board,
and thereupon the Board 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 Board. 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 Board.
(k) Jurisdiction and enforcement; penalty
(1) The Board 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 principal office of the credit union is
located, for the enforcement of any effective and outstanding notice or
order issued under this section or section 1790d of this title, and such
courts shall have jurisdiction and power to order and require compliance
therewith. However, except as otherwise provided in this section or
section 1790d of this title, no court shall have jurisdiction to affect
by injunction or otherwise the issuance or enforcement of any notice or
order under this section or section 1790d of this title or to review,
modify, suspend, terminate, or set aside any such notice or order.
(2) Civil money penalty.--
(A) First tier.--Any insured credit union 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 (e), (f), (g), (i), or (q) of this
section, or any final order under section 1790d of this title;
(iii) violates any condition imposed in writing by the Board
in connection with the grant of any application or other request
by such credit union; or
(iv) violates any written agreement between such credit
union 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
credit union 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 credit union; 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 credit union; 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 credit union 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 credit union; or
(III) breaches any fiduciary duty; and
(ii) knowingly or recklessly causes a substantial loss to
such credit union 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 credit
union, an amount to not \3\ exceed $1,000,000; and
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\3\ So in original. Probably should be ``not to''.
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(ii) in the case of any insured credit union, an amount not
to exceed the lesser of--
(I) $1,000,000; or
(II) 1 percent of the total assets of such credit union.
(E) Assessment.--
(i) Written notice.--Any penalty imposed under subparagraph
(A), (B), or (C) may be assessed and collected by the Board 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.--The Board 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 Board shall
take into account the appropriateness of the penalty with respect
to--
(i) the size of financial resources and good faith of the
insured credit union or the 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 credit union 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 credit union or other person
fails to pay an assessment after any penalty assessed under this
paragraph has become final, the Board 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) ``Violate'' defined.--For purposes of this section, the term
``violate'' includes any action (alone or with another or others)
for or toward causing, bringing about, participating in, counseling,
or aiding or abetting a violation.
(L) Regulations.--The Board 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 credit union) shall not affect the jurisdiction
and authority of the Board 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 credit union (whether such date occurs
before, on, or after August 9, 1989).
(l) Criminal penalty for violation of certain orders
Whoever--
(1) under this chapter, is suspended or removed from, or
prohibited from participating in the affairs of any credit union
described in subsection (g)(5) of this section; and
(2) knowingly participates, directly or indirectly, in any
manner (including by engaging in an activity specifically prohibited
in such an order or in subsection (g)(5) of this section) in the
conduct of the affairs of such a credit union;
shall be fined not more than $1,000,000, imprisoned for not more than 5
years, or both.
(m) Definitions
As used in this section (1) the terms ``cease-and-desist order which
has become final'' and ``order which has become final'' means a cease-
and-desist order, or an order issued by the Board with the consent of
the credit union or the director, officer, committee member, or other
person concerned, or with respect to which no petition for review of the
action of the Board has been filed and perfected in a court of appeals
as specified in paragraph (2) of subsection (j) of this section, or with
respect to which the action of the court in which said petition is so
filed is not subject to further review by the Supreme Court of the
United States in proceedings provided for in said paragraph, or an order
issued under subsection (i) of this section, and (2) the term
``violation'' includes, without limitation any action (alone or with
another or others) for or toward causing, bringing about, participating
in, counseling, or aiding or abetting a violation.
(n) Notice or order to State board supervising State-chartered credit
union
Any service required or authorized to be made by the Board under
this section may be made by registered mail or in such other manner
reasonably calculated to give actual notice as the Board may by
regulation or otherwise provide. Copies of any notice or order served by
the Board upon any State-chartered credit union or any director,
officer, or committee member thereof or other person participating in
the conduct of its affairs, pursuant to the provisions of this section,
shall also be sent to the commission, board, or authority, if any,
having supervision of such credit union.
(o) Notice of proceedings to State board supervising State-chartered
credit union; effect of corrective action by State board; attack
on validity of notice or order
In connection with any proceeding under subsection (e), (f)(1), or
(g) of this section involving an insured State-chartered credit union or
any institution-affiliated party, the Board shall provide the
commission, board, or authority, if any, having supervision of such
credit union, with notice of its intent to institute such a proceeding
and the grounds thereof. Unless within such time as the Board 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 such
commission, board, or authority, the Board may proceed as provided in
this section. No credit union or other party who is the subject of any
notice or order issued by the Board 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.
(p) Proceedings; powers of Board; court enforcement of subpenas; witness
fees; expenses and attorneys' fees
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 1784(b) of this title, the
Board, in conducting the proceeding, examination, or investigation or
considering the claim for insured deposits,,\4\ or any 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 the
Board 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 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 section 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 proceedings
instituted under this section by an insured credit union or a director,
officer, or committee member 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 credit union or from its
assets.
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\4\ So in original.
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(q) Compliance with monetary transaction recordkeeping and report
requirements
(1) Compliance procedures required
The Board shall prescribe regulations requiring insured credit
unions to establish and maintain procedures reasonably designed to
assure and monitor the compliance of such credit unions with the
requirements of subchapter II of chapter 53 of title 31.
(2) Examinations of credit unions to include review of
compliance procedures
(A) In general
Each examination of an insured credit union by the Board
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 credit union.
(3) Order to comply with requirements
If the Board determines that an insured credit union--
(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 credit union which was previously reported to
the credit union by the Board,
the Board shall issue an order in the manner prescribed in
subsection (e) or (f) of this section requiring such credit union to
cease and desist from its violation of this subsection or
regulations prescribed under this subsection.
(r) ``Institution-affiliated party'' defined
For purposes of this chapter, the term ``institution-affiliated
party'' means--
(1) any committee member, director, officer, or employee of, or
agent for, an insured credit union;
(2) any consultant, joint venture partner, and any other person
as determined by the Board (by regulation or on a case-by-case
basis) who participates in the conduct of the affairs of an insured
credit union; and
(3) any independent contractor (including any attorney,
appraiser, or accountant) who knowingly or recklessly participates
in--
(A) any violation of any law or regulation;
(B) any breach of fiduciary duty; or
(C) any unsafe or unsound practice,
which caused or is likely to cause more than a minimal financial
loss to, or a significant adverse effect on, the insured credit
union.
(s) Public disclosure of agency action
(1) In general
The Board shall publish and make available to the public on a
monthly basis--
(A) any written agreement or other written statement for
which a violation may be enforced by the Board, unless the
Board, in its discretion, determines that publication would be
contrary to the public interest;
(B) any final order issued with respect to any
administrative enforcement proceeding initiated by the Board
under this section or any other law; and
(C) any modification to or termination of any order or
agreement made public pursuant to this paragraph.
(2) Hearings
All hearings on the record with respect to any notice of charges
issued by the Board shall be open to the public, unless the agency,
in its discretion, determines that holding an open hearing would be
contrary to the public interest.
(3) Reports to Congress
A written report shall be made part of a determination not to
hold a public hearing pursuant to paragraph (2) or not to publish a
document pursuant to paragraph (1)(A). At the end of each calendar
quarter, all such reports shall be transmitted to the Congress.
(4) Transcript of hearing
A transcript that includes all testimony and other documentary
evidence shall be prepared for all hearings commenced pursuant to
subsection (k) of this section. A transcript of public hearings
shall be made available to the public pursuant to section 552 of
title 5.
(5) Delay of publication under exceptional circumstances
If the Board makes a determination in writing that the
publication of a final order pursuant to paragraph (1)(B) would
seriously threaten the safety and soundness of an insured depository
institution, the agency may delay the publication of the document
for a reasonable time.
(6) Documents filed under seal in public enforcement
hearings
The Board may file any document or part of a document under seal
in any administrative enforcement hearing commenced by the agency if
disclosure of the document would be contrary to the public interest.
A written report shall be made part of any determination to withhold
any part of a document from the transcript of the hearing required
by paragraph (2).
(7) Retention of documents
The Board shall keep and maintain a record, for a period of at
least 6 years, of all documents described in paragraph (1) and all
informal enforcement agreements and other supervisory actions and
supporting documents issued with respect to or in connection with
any administrative enforcement proceeding initiated by such agency
under this section or any other laws.
(8) Disclosures to Congress
No provision of this subsection may be construed to authorize
the withholding, or to prohibit the disclosure, of any information
to the Congress or any committee or subcommittee of the Congress.
(t) Regulation of certain forms of benefits to institution-affiliated
parties
(1) Golden parachutes and indemnification payments
The Board may prohibit or limit, by regulation or order, any
golden parachute payment or indemnification payment.
(2) Factors to be taken into account
The Board shall prescribe, by regulation, the factors to be
considered by the Board in taking any action pursuant to paragraph
(1) which may include such factors as the following:
(A) Whether there is a reasonable basis to believe that the
institution-affiliated party has committed any fraudulent act or
omission, breach of trust or fiduciary duty, or insider abuse
with regard to the credit union that has had a material affect
on the financial condition of the credit union.
(B) Whether there is a reasonable basis to believe that the
institution-affiliated party is substantially responsible for
the insolvency of the credit union, the appointment of a
conservator or liquidating agent for the credit union, or the
credit union's troubled condition (as defined in prescribed \5\
by the Board pursuant to paragraph (4)(A)(ii)(III)).
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\5\ So in original. Probably should be ``regulations prescribed''.
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(C) Whether there is a reasonable basis to believe that the
institution-affiliated party has materially violated any
applicable Federal or State banking law or regulation that has
had a material affect on the financial condition of the credit
union.
(D) Whether there is a reasonable basis to believe that the
institution-affiliated party has violated or conspired to
violate--
(i) section 215, 656, 657, 1005, 1006, 1007, 1014, 1032,
or 1344 of title 18; or
(ii) section 1341 or 1343 of such title affecting a
financial institution.
(E) Whether the institution-affiliated party was in a
position of managerial or fiduciary responsibility.
(F) The length of time the party was affiliated with the
credit union and the degree to which--
(i) the payment reasonably reflects compensation earned
over the period of employment; and
(ii) the compensation involved represents a reasonable
payment for services rendered.
(3) Certain payments prohibited
No credit union may prepay the salary or any liability or legal
expense of any institution-affiliated party if such payment is
made--
(A) in contemplation of the insolvency of such credit union
or after the commission of an act of insolvency; and
(B) with a view to, or has the result of--
(i) preventing the proper application of the assets of
the credit union; or
(ii) preferring one creditor over another.
(4) ``Golden parachute payment'' defined
For purposes of this subsection--
(A) In general
The term ``golden parachute payment'' means any payment (or
any agreement to make any payment) in the nature of compensation
by any credit union for the benefit of any institution-
affiliated party pursuant to an obligation of such credit union
that--
(i) is contingent on the termination of such party's
affiliation with the credit union; and
(ii) is received on or after the date on which--
(I) the credit union is insolvent;
(II) any conservator or liquidating agent is
appointed for such credit union; or \6\
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\6\ So in original. The word ``or'' probably should not appear.
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(III) the Board determines that the credit union is
in a troubled condition (as defined in regulations which
the Board shall prescribe);
(IV) the credit union has been assigned a composite
rating by the Board of 4 or 5 under the Uniform
Financial Institutions Rating System (as applicable with
respect to credit unions); or
(V) the credit union is subject to a proceeding
initiated by the Board to terminate or suspend deposit
insurance for such credit union.
(B) Certain payments in contemplation of an event
Any payment which would be a golden parachute payment but
for the fact that such payment was made before the date referred
to in subparagraph (A)(ii) shall be treated as a golden
parachute payment if the payment was made in contemplation of
the occurrence of an event described in any subclause of such
subparagraph.
(C) Certain payments not included
The term ``golden parachute payment'' shall not include--
(i) any payment made pursuant to a retirement plan which
is qualified (or is intended to be qualified) under section
401 of title 26 or other nondiscriminatory retirement or
severance benefit plan;
(ii) any payment made pursuant to a bona fide deferred
compensation plan or arrangement which the Board determines,
by regulation or order, to be permissible; or
(iii) any payment made by reason of the death or
disability of an institution-affiliated party.
(5) Other definitions
For purposes of this subsection--
(A) Indemnification payment
Subject to paragraph (6), the term ``indemnification
payment'' means any payment (or any agreement to make any
payment) by any credit union for the benefit of any person who
is or was an institution-affiliated party, to pay or reimburse
such person for any liability or legal expense with regard to
any administrative proceeding or civil action instituted by the
Board which results in a final order under which such person--
(i) is assessed a civil money penalty;
(ii) is removed or prohibited from participating in
conduct of the affairs of the credit union; or
(iii) is required to take any affirmative action
described in subsection (e)(3) of this section with respect
to such credit union.
(B) Liability or legal expense
The term ``liability or legal expense'' means--
(i) any legal or other professional expense incurred in
connection with any claim, proceeding, or action;
(ii) the amount of, and any cost incurred in connection
with, any settlement of any claim, proceeding, or action;
and
(iii) the amount of, and any cost incurred in connection
with, any judgment or penalty imposed with respect to any
claim, proceeding, or action.
(C) Payment
The term ``payment'' includes--
(i) any direct or indirect transfer of any funds or any
asset; and
(ii) any segregation of any funds or assets for the
purpose of making, or pursuant to an agreement to make, any
payment after the date on which such funds or assets are
segregated, without regard to whether the obligation to make
such payment is contingent on--
(I) the determination, after such date, of the
liability for the payment of such amount; or
(II) the liquidation, after such date, of the amount
of such payment.
(6) Certain commercial insurance coverage not treated as
covered benefit payment
No provision of this subsection shall be construed as
prohibiting any credit union from purchasing any commercial
insurance policy or fidelity bond, except that, subject to any
requirement described in paragraph (5)(A)(iii), such insurance
policy or bond shall not cover any legal or liability expense of the
credit union which is described in paragraph (5)(A).
(u) Foreign investigations
(1) Requesting assistance from foreign banking authorities
In conducting any investigation, examination, or enforcement
action under this chapter, the Board may--
(A) request the assistance of any foreign banking authority;
and
(B) maintain an office outside the United States.
(2) Providing assistance to foreign banking authorities
(A) In general
The Board may, at the request of any foreign banking
authority, assist such authority if such authority states that
the requesting authority is conducting an investigation to
determine whether any person has violated, is violating, or is
about to violate any law or regulation relating to banking
matters or currency transactions administered or enforced by the
requesting authority.
(B) Investigation by Federal banking agency
The Board may, in the Board's discretion, investigate and
collect information and evidence pertinent to a request for
assistance under subparagraph (A). Any such investigation shall
comply with the laws of the United States and the policies and
procedures of the Board.
(C) Factors to consider
In deciding whether to provide assistance under this
paragraph, the Board shall consider--
(i) whether the requesting authority has agreed to
provide reciprocal assistance with respect to banking
matters within the jurisdiction of the Board or any
appropriate Federal banking agency; and
(ii) whether compliance with the request would prejudice
the public interest of the United States.
(D) Treatment of foreign banking authority
For purposes of any Federal law or Board regulation relating
to the collection or transfer of information by the Board or any
appropriate Federal banking agency, the foreign banking
authority shall be treated as another appropriate Federal
banking agency.
(3) Rule of construction
Paragraphs (1) and (2) shall not be construed to limit the
authority of the Board or any other Federal agency to provide or
receive assistance or information to or from any foreign authority
with respect to any matter.
(v) Termination of insurance for money laundering or cash transaction
reporting offenses
(1) In general
(A) Conviction of title 18 offenses
(i) Duty to notify
If an insured State credit union has been convicted of
any criminal offense under section 1956 or 1957 of title 18,
the Attorney General shall provide to the Board a written
notification of the conviction and shall include a certified
copy of the order of conviction from the court rendering the
decision.
(ii) Notice of termination
After written notification from the Attorney General to
the Board of such a conviction, the Board shall issue to
such insured credit union a notice of its intention to
terminate the insured status of the insured credit union and
schedule a hearing on the matter, which shall be conducted
as a termination hearing pursuant to subsection (b) of this
section, except that no period for correction shall apply to
a notice issued under this subparagraph.
(B) Conviction of title 31 offenses
If a credit union is convicted of any criminal offense under
section 5322 or 5324 of title 31 after prior written
notification from the Attorney General, the Board may initiate
proceedings to terminate the insured status of such credit union
in the manner described in subparagraph (A).
(C) Notice to State supervisor
The Board shall simultaneously transmit a copy of any notice
under this paragraph to the appropriate State financial
institutions supervisor.
(2) Factors to be considered
In determining whether to terminate insurance under paragraph
(1), the Board shall take into account the following factors:
(A) The extent to which directors, committee members, or
senior executive officers (as defined by the Board in
regulations which the Board shall prescribe) of the credit union
knew of, or were involved in, the commission of the money
laundering offense of which the credit union was found guilty.
(B) The extent to which the offense occurred despite the
existence of policies and procedures within the credit union
which were designed to prevent the occurrence of any such
offense.
(C) The extent to which the credit union has fully
cooperated with law enforcement authorities with respect to the
investigation of the money laundering offense of which the
credit union was found guilty.
(D) The extent to which the credit union has implemented
additional internal controls (since the commission of the
offense of which the credit union was found guilty) to prevent
the occurrence of any other money laundering offense.
(E) The extent to which the interest of the local community
in having adequate deposit and credit services available would
be threatened by the termination of insurance.
(3) Notice to State credit union supervisor and public
When the order to terminate insured status initiated pursuant to
this subsection is final, the Board shall--
(A) notify the commission, board, or authority (if any)
having supervision of the credit union described in paragraph
(1) at least 10 days prior to the effective date of the order of
the termination of the insured status of such credit union; and
(B) publish notice of the termination of the insured status
of the credit union.
(4) Temporary insurance of previously insured deposits
Upon termination of the insured status of any State credit union
pursuant to paragraph (1), the deposits of such credit union shall
be treated in accordance with subsection (d)(2) of this section.
(5) Successor liability
This subsection shall not apply to a successor to the interests
of, or a person who acquires, an insured credit union that violated
a provision of law described in paragraph (1), if the successor
succeeds to the interests of the violator, or the acquisition is
made, in good faith and not for purposes of evading this subsection
or regulations prescribed under this subsection.
(June 26, 1934, ch. 750, title II, Sec. 206, as added Pub. L. 91-468,
Sec. 1(3), Oct. 19, 1970, 84 Stat. 1003; amended Pub. L. 93-383, title
VII, Sec. 728, Aug. 22, 1974, 88 Stat. 720; Pub. L. 95-22, title III,
Sec. 307, Apr. 19, 1977, 91 Stat. 52; Pub. L. 95-630, title I,
Secs. 107(a)(4), (c)(4), (d)(4), (e)(4), 111(d), title V, Sec. 502(b),
Nov. 10, 1978, 92 Stat. 3652, 3656, 3659, 3663, 3670, 3681; Pub. L. 97-
320, title I, Secs. 132, 141(a)(8), title IV, Secs. 424(a), (d)(9), (e),
427(c), Oct. 15, 1982, 96 Stat. 1487, 1489, 1522, 1523, 1525; Pub. L.
98-369, div. B, title VIII, Sec. 2812, July 18, 1984, 98 Stat. 1206;
Pub. L. 99-570, title I, Sec. 1359(d), Oct. 27, 1986, 100 Stat. 3207-29;
Pub. L. 100-86, title V, Sec. 509(a), title VII, Secs. 709-713, Aug. 10,
1987, 101 Stat. 635, 653, 654; Pub. L. 101-73, title IX, Secs. 901(a),
(b)(2), 902(b), 903(b), 904(b), 905(b), 906(b), 907(b), 908(b), 913(b),
915(b), 920(b), title XII, Sec. 1217(b), Aug. 9, 1989, 103 Stat. 446,
448, 451, 455, 458, 460, 462, 464, 477, 484, 486, 488, 546; Pub. L. 101-
647, title XXV, Secs. 2523(b), 2532(c), 2547(b), Nov. 29, 1990, 104
Stat. 4870, 4881, 4887; Pub. L. 102-233, title III, Sec. 302(a), Dec.
12, 1991, 105 Stat. 1767; Pub. L. 102-550, title XV, Secs. 1501(b),
1503(b), 1504(b), Oct. 28, 1992, 106 Stat. 4044, 4050, 4053; Pub. L.
103-325, title IV, Sec. 411(c)(2)(B), Sept. 23, 1994, 108 Stat. 2253;
Pub. L. 105-219, title III, Sec. 301(b)(1), (g)(1), (2), Aug. 7, 1998,
112 Stat. 930, 931.)
References in Text
The Depository Institution Management Interlocks Act, referred to in
subsec. (g)(2)(A)(iii), is title II of Pub. L. 95-630, Nov. 10, 1978, 92
Stat. 3672, as amended, which is classified principally to chapter 33
(Sec. 3201 et seq.) of this title. For complete classification of this
Act to the Code, see Short Title note set out under section 3201 of this
title and Tables.
Section 1818(b)(8) of this title, referred to in subsec.
(g)(7)(A)(ii), was redesignated section 1818(b)(9) by Pub. L. 102-242,
title I, Sec. 131(c)(1), Dec. 19, 1991, 105 Stat. 2266.
The Farm Credit Act of 1971, referred to in subsec. (g)(7)(A)(iv),
(D)(ii), is Pub. L. 92-181, Dec. 10, 1971, 85 Stat. 583, as amended,
which is classified generally to chapter 23 (Sec. 2001 et seq.) of this
title. For complete classification of this Act to the Code, see Short
Title note set out under section 2001 of this title and Tables.
Amendments
1998--Subsec. (h)(1). Pub. L. 105-219, Sec. 301(g)(2), inserted ``or
another (including, in the case of a State-chartered insured credit
union, the State official having jurisdiction over the credit union)''
after ``appoint itself'' in introductory provisions.
Subsec. (h)(1)(F), (G). Pub. L. 105-219, Sec. 301(b)(1)(A), added
subpars. (F) and (G).
Subsec. (h)(2)(A). Pub. L. 105-219, Sec. 301(b)(1)(B)(i),
substituted ``Except as provided in subparagraph (C), in the case'' for
``In the case''.
Subsec. (h)(2)(C). Pub. L. 105-219, Sec. 301(b)(1)(B)(ii), added
subpar. (C).
Subsec. (k)(1). Pub. L. 105-219, Sec. 301(g)(1)(A), inserted ``or
section 1790d of this title'' after ``this section'' in three places.
Subsec. (k)(2)(A)(ii). Pub. L. 105-219, Sec. 301(g)(1)(B), inserted
``, or any final order under section 1790d of this title'' before
semicolon at end.
1994--Subsecs. (h)(1)(C), (i)(1)(A)(ii), (v)(1)(B). Pub. L. 103-325
substituted ``section 5322 or 5324 of title 31'' for ``section 5322 of
title 31''.
1992--Subsec. (g)(2). Pub. L. 102-550, Sec. 1504(b)(1), amended par.
(2) generally. Prior to amendment, par. (2) read as follows: ``Whenever,
in the opinion of the Board, any director, officer, or committee member
of an insured credit union has committed any violation of the Depository
Institution Management Interlocks Act, the Board may serve upon such
director, officer, or committee member a written notice of its intention
to remove him from office.''
Subsec. (h)(1)(C) to (E). Pub. L. 102-550, Sec. 1501(b), added
subpar. (C) and redesignated former subpars. (C) and (D) as (D) and (E),
respectively.
Subsec. (i)(1). Pub. L. 102-550, Sec. 1504(b)(2), amended par. (1)
generally, subdividing existing provisions into subpars. (A) to (D),
and, in subpar. (A), including violations under section 1956, 1957, or
1960 of title 18 or section 5322 of title 31 as reason for suspension of
any violator from further participation in the affairs of the credit
union.
Subsec. (v). Pub. L. 102-550, Sec. 1503(b), added subsec. (v).
1990--Subsec. (j)(1). Pub. L. 101-647, Sec. 2547(b)(2), which
directed amendment of par. (1) by striking out after first sentence
``Such hearing shall be private, unless the Board, in its discretion,
after fully considering the views of the party afforded the hearing,
determines that a public hearing is necessary to protect the public
interest.'' was executed by striking out ``Such hearing shall be private
unless the Board, in its discretion, after fully considering the views
of the party afforded the hearing, determines that a public hearing is
necessary to protect the public interest.'' as the probable intent of
Congress.
Subsec. (s). Pub. L. 101-647, Sec. 2547(b)(1), amended subsec. (s)
generally. Prior to amendment, subsec. (s) read as follows:
``(1) In general.--The Board shall publish and make available to the
public--
``(A) any final order issued with respect to any administrative
enforcement proceeding initiated by such agency under this section
or any other provision of law; and
``(B) any modification to or termination of any final order
described in subparagraph (A).
``(2) Delay of publication under exceptional circumstances.--If the
Board makes a determination in writing that the publication of any final
order pursuant to paragraph (1) would seriously threaten the safety or
soundness of an insured credit union or other federally regulated
depository institution, the Board may delay the publication of such
order for a reasonable time.''
Subsec. (t). Pub. L. 101-647, Sec. 2523(b), added subsec. (t).
Subsec. (u). Pub. L. 101-647, Sec. 2532(c), added subsec. (u).
1989--Subsec. (e)(1). Pub. L. 101-73, Sec. 901(b)(2)(A), (B),
substituted references to institution-affiliated parties for references
to directors, officers, committee members, agents, or other persons
participating in the conduct of the affairs of credit unions.
Subsec. (e)(3), (4). Pub. L. 101-73, Sec. 902(b)(1), added pars. (3)
and (4).
Subsec. (f)(1). Pub. L. 101-73, Sec. 902(b)(2)(B), substituted
``significant'' for ``substantial'', struck out ``seriously'' before
``weaken the condition of'' and before ``prejudice the interests of'',
and inserted after first sentence ``Such order may include any
requirement authorized under subsection (e)(3)(B) of this section.''
Pub. L. 101-73, Sec. 901(b)(2)(B), (C), substituted references to
institution-affiliated parties for references to directors, officers,
committee members, employees, agents, or other persons participating in
the conduct of the affairs of credit unions.
Subsec. (f)(2). Pub. L. 101-73, Sec. 901(b)(2)(B), substituted
references to institution-affiliated parties for references to
directors, officers, committee members, employees, agents, or other
persons participating in the conduct of the affairs of credit unions.
Subsec. (f)(3), (4). Pub. L. 101-73, Sec. 902(b)(2)(A), (C), added
par. (3) and redesignated former par. (3) as (4).
Subsec. (g)(1). Pub. L. 101-73, Sec. 903(b)(1), amended par. (1)
generally. Prior to amendment, par. (1) read as follows: ``Whenever, in
the opinion of the Board, any director, officer, committee member, or
employee of an insured credit union has committed any violation of law,
rule, or regulation, or of a cease-and-desist order which has become
final, or has engaged or participated in any unsafe or unsound practice
in connection with the credit union, or has committed or engaged in any
act, omission, or practice which constitutes a breach of his fiduciary
duty as such director, officer, committee member, or employee and the
Board determines that the credit union has suffered or will probably
suffer substantial financial loss or other damage or that the interests
of its insured members could be seriously prejudiced by reason of such
violation or practice or breach of fiduciary duty, the Board may serve
upon such director, officer, committee member, or employee a written
notice of its intention to remove him from office.''
Subsec. (g)(2). Pub. L. 101-73, Sec. 903(b)(2), redesignated par.
(3) as (2) and struck out former par. (2) which read as follows:
``Whenever, in the opinion of the Board, any director, officer,
committee member, or employee of an insured credit union, by conduct or
practice with respect to another insured credit union or other business
institution which resulted in substantial financial loss or other
damage, has evidenced his personal dishonesty or unfitness to continue
as a director, officer, committee member, or employee, and, whenever, in
the opinion of the Board, any agent or other person participating in the
conduct of the affairs of an insured credit union, by conduct or
practice with respect to such credit union or other insured credit union
or other business institution which resulted in substantial financial
loss or other damage, has evidenced his personal dishonesty or unfitness
to participate in the conduct of the affairs of such insured credit
union, the Board may serve upon such director, officer, committee
member, employee, agent, or other person a written notice of its
intention to remove him from office and/or to prohibit his further
participation in any manner in the conduct of the affairs of such credit
union.''
Subsec. (g)(3). Pub. L. 101-73, Sec. 903(b)(2), added par. (3).
Former par. (3) redesignated (2).
Subsec. (g)(4). Pub. L. 101-73, Sec. 903(b)(2), redesignated par.
(5) as (4) and struck out former par. (4) which provided for temporary
suspension from office or prohibition from further participation in
credit union activities.
Subsec. (g)(5). Pub. L. 101-73, Sec. 903(b)(2), (3), added par. (5).
Former par. (5) redesignated (4).
Subsec. (g)(6). Pub. L. 101-73, Sec. 903(b)(4), substituted ``credit
union under paragraph (3)'' for ``credit union under paragraph (4)'' and
``person under paragraph (1) or (2)'' for ``person under paragraph (1),
(2), or (3)''.
Subsec. (g)(7). Pub. L. 101-73, Sec. 904(b), amended par. (7)
generally, revising and restating as subpars. (A) to (F) provisions of
former subpars. (A) and (B).
Subsec. (h)(3). Pub. L. 101-73, Sec. 1217(b), inserted at end
``Except as provided in this paragraph, no court may take any action,
except at the request of the Board by regulation or order, to restrain
or affect the exercise of powers or functions of the Board as
conservator.''
Subsec. (i)(1). Pub. L. 101-73, Sec. 906(b), struck out ``authorized
by a United States attorney'' after ``is charged in any information,
indictment, or complaint'', and substituted ``or an agreement to enter a
pre-trial diversion or other similar program'' for ``with respect to
such crime'' after ``judgment of conviction''.
Pub. L. 101-73, Sec. 901(b)(2)(D)(i)-(iv), (vi), substituted
references to institution-affiliated parties for references to
directors, committee members, or officers of insured credit unions, or
other persons participating in the conduct of the affairs of credit
unions, and substituted ``whereupon such party (if a director, a
committee member, or an officer)'' for ``whereupon such director,
committee member, or officer''.
Pub. L. 101-73, Sec. 901(b)(2)(D)(v), which directed the
substitution of ``party'' for ``director, officer or other person''
could not be executed because ``director, officer or other person'' does
not appear in par. (1).
Subsec. (i)(3). Pub. L. 101-73, Sec. 901(b)(2)(E)(i)-(iv),
substituted references to institution-affiliated parties for references
to directors, committee members, officers, or other persons.
Pub. L. 101-73, Sec. 901(b)(2)(E)(v), which directed the
substitution of ``such party'' for ``said director, committee member,
officer or other person'' was executed by making the substitution for
``said director, committee member, officer, or other person'' after
``whether the order removing'' in third sentence to reflect the probable
intent of Congress.
Subsec. (j)(2). Pub. L. 101-73, Sec. 920(b), substituted ``Any party
to any proceeding under paragraph (1)'' for ``Any party to the
proceeding, or any person required by an order issued under this section
to cease and desist from any of the practices or violations stated
therein,''.
Pub. L. 101-73, Sec. 901(b)(2)(F), substituted ``institution-
affiliated party'' for ``director, officer, committee member, or other
person''.
Subsec. (k)(2). Pub. L. 101-73, Sec. 907(b), in amending par. (2)
generally, designated existing provisions as cls. (i) to (iv),
substituted provisions imposing a fine of $5,000 per day for violation
of any law or regulation, a final or temporary order, any condition
imposed in writing, or any written agreement for provisions imposing a
fine of $1,000 per day for violation of any final order, authorizing the
penalizing agency to compromise or modify such penalty, providing for
assessment and collection of such penalty by written notice, and
defining ``violates'', and added subpars. (B) to (L).
Subsec. (k)(3). Pub. L. 101-73, Sec. 905(b), added par. (3).
Subsec. (l). Pub. L. 101-73, Sec. 908(b), amended subsec. (l)
generally. Prior to amendment, subsec. (l) read as follows: ``Any
director, officer, or committee member, or former director, officer, or
committee member, of an insured credit union or of a credit union any of
the member accounts of which are insured, or any other person against
whom there is outstanding and effective any notice or order (which is an
order which has become final) served upon such director, officer,
committee member, or other person under subsections (g)(4), (g)(5), or
(i) of this section and who (i) participates in any manner in the
conduct of the affairs of the credit union involved, or directly or
indirectly solicits or procures, or transfers or attempts to transfer,
or votes or attempts to vote, any proxies, consents, or authorizations
in respect of any voting rights in such credit union, or (ii) without
the prior written approval of the Board votes for a director, serves or
acts as a director, officer, committee member, or employee of any credit
union, shall upon conviction be fined not more than $5,000 or imprisoned
for not more than one year, or both.''
Subsec. (o). Pub. L. 101-73, Sec. 901(b)(2)(G), substituted
``institution-affiliated party'' for ``director, officer, committee
member or other person participating in the conduct of its affairs''.
Subsec. (p). Pub. L. 101-73, Sec. 915(b), in first sentence,
inserted ``or in connection with any claim for insured deposits or any
examination or investigation under section 1784(b) of this title'' after
``any proceeding under this section'', ``, in conducting the proceeding,
examination, or investigation or considering the claim for insured
deposits,'' after ``section, the Board'', and ``, claims, examinations,
or investigations'' before period at end.
Subsec. (r). Pub. L. 101-73, Sec. 901(a), added subsec. (r).
Subsec. (s). Pub. L. 101-73, Sec. 913(b), added subsec. (s).
1987--Pub. L. 100-86, Sec. 509(a), repealed Pub. L. 97-320,
Sec. 141. See 1982 Amendment notes below.
Subsec. (g)(1). Pub. L. 100-86, Sec. 709(1), substituted ``committee
member, or employee'' for ``or committee member'' in three places.
Subsec. (g)(2). Pub. L. 100-86, Sec. 709(2)-(4), substituted
``committee member, or employee'' for ``or committee member'' in two
places, substituted ``any agent or other person'' for ``any other
person'', and inserted ``employee, agent,'' before ``or other person''.
Subsec. (g)(7). Pub. L. 100-86, Sec. 710, added par. (7).
Subsec. (h)(1)(C), (D). Pub. L. 100-86, Sec. 711, added subpars. (C)
and (D).
Subsec. (h)(2)(B). Pub. L. 100-86, Sec. 712, substituted ``30'' for
``ninety''.
Subsec. (h)(8), (9). Pub. L. 100-86, Sec. 713, added par. (8) and
redesignated former par. (8) as (9).
1986--Subsec. (k)(2)(A). Pub. L. 99-570, Sec. 1359(d)(2), inserted
reference to subsec. (q) of this section.
Subsec. (q). Pub. L. 99-570, Sec. 1359(d)(1), added subsec. (q).
1984--Subsec. (d)(1). Pub. L. 98-369 inserted ``(1)'' after
``subsection (a)'', ``maintain its deposit with and'', and provisions
relating to termination of insured status and the obtaining of
comparable insurance coverage from another source.
1982--Subsec. (b)(2). Pub. L. 97-320, Sec. 132(b), substituted
``subsection (j)'' for ``subsection (i)''.
Pub. L. 97-320, Sec. 141(a)(8), which directed that, effective Oct.
13, 1986, the provisions of law amended by section 132 of Pub. L. 97-320
shall be amended to read as they would without such amendment, was
repealed by Pub. L. 100-86, Sec. 509(a). See Effective and Termination
Dates of 1982 Amendment note and Extension of Emergency Acquisition and
Net Worth Guarantee Provisions of Pub. L. 97-320 note set out under
section 1464 of this title.
Subsec. (g)(3) to (6). Pub. L. 97-320, Sec. 427(c)(1), added par.
(3); redesignated former pars. (3) to (5) as (4) to (6), respectively;
inserted reference to par. (3) in two places and substituted reference
to par. (6) for par. (5) in par. (4); and inserted reference to par. (3)
and substituted reference to par. (4) for par. (3) in par. (6).
Subsecs. (h), (i). Pub. L. 97-320, Sec. 132(a), added subsec. (h)
and redesignated former subsecs. (h) and (i) as (i) and (j),
respectively.
Pub. L. 97-320, Sec. 141(a)(8), which directed that, effective Oct.
13, 1986, the provisions of law amended by section 132 of Pub. L. 97-320
shall be amended to read as they would without such amendment, was
repealed by Pub. L. 100-86, Sec. 509(a). See Effective and Termination
Dates of 1982 Amendment note and Extension of Emergency Acquisition and
Net Worth Guarantee Provisions of Pub. L. 97-320 note set out under
section 1464 of this title.
Subsec. (j). Pub. L. 97-320, Sec. 132(a), (c), (d), redesignated
former subsec. (i) as (j), substituted ``subsection (i)(3)'' for
``subsection (h)(3)'' in first sentence and ``subsection (j)'' for
``subsection (i)'' in fourth sentence of par. (1), and substituted
``subsection (i)(1)'' for ``subsection (h)(1)'' after ``an order issued
under'' in par. (2). Former subsec. (j) redesignated (k).
Pub. L. 97-320, Sec. 141(a)(8), which directed that, effective Oct.
13, 1986, the provisions of law amended by section 132 of Pub. L. 97-320
shall be amended to read as they would without such amendment, was
repealed by Pub. L. 100-86, Sec. 509(a). See Effective and Termination
Dates of 1982 Amendment note and Extension of Emergency Acquisition and
Net Worth Guarantee Provisions of Pub. L. 97-320 note set out under
section 1464 of this title.
Subsec. (k). Pub. L. 97-320, Sec. 132(a)(1), redesignated former
subsec. (j) as (k). Former subsec. (k) redesignated (l).
Pub. L. 97-320, Sec. 141(a)(8), which directed that, effective Oct.
13, 1986, the provisions of law amended by section 132 of Pub. L. 97-320
shall be amended to read as they would without such amendment, was
repealed by Pub. L. 100-86, Sec. 509(a). See Effective and Termination
Dates of 1982 Amendment note and Extension of Emergency Acquisition and
Net Worth Guarantee Provisions of Pub. L. 97-320 note set out under
section 1464 of this title.
Subsec. (k)(2)(A), (D). Pub. L. 97-320, Sec. 424(a), (d)(9), (e),
which directed insertion of proviso giving Board authority to
compromise, etc., any civil money penalty imposed under this subsection
and substitution of ``may be assessed'' for ``shall be assessed'' in
subsec. (j)(2)(A), and substitution of ``twenty days from the service''
for ``ten days from the date'' in subsection (j)(2)(D), was executed to
subsec. (k)(2)(A), (D) to reflect the probable intent of Congress and
the redesignation of subsec. (j) as (k) by section 132(a)(1) of Pub. L.
97-320.
Subsec. (l). Pub. L. 97-320, Sec. 132(a)(1), (e), redesignated
former subsec. (k) as (l) and substituted ``(i)'' for ``(h)'' after
``(g)(3), (g)(4), or''. Former subsec. (l) redesignated (m).
Pub. L. 97-320, Sec. 141(a)(8), which directed that, effective Oct.
13, 1986, the provisions of law amended by section 132 of Pub. L. 97-320
shall be amended to read as they would without such amendment, was
repealed by Pub. L. 100-86, Sec. 509(a). See Effective and Termination
Dates of 1982 Amendment note and Extension of Emergency Acquisition and
Net Worth Guarantee Provisions of Pub. L. 97-320 note set out under
section 1464 of this title.
Pub. L. 97-320, Sec. 427(c)(2), which directed substitution of
reference to subsec. (g)(5) for subsec. (g)(3) in subsec. (k), was
executed to subsec. (l) to reflect the probable intent of Congress and
the redesignation of subsec. (k) as (l) by section 132(a)(1) of Pub. L.
97-320.
Subsec. (m). Pub. L. 97-320, Sec. 132(a)(1), (f), redesignated
former subsec. (l) as (m) and substituted ``subjection (j)'' for
``subsection (i)'' after ``paragraph (2) of'' and ``subsection (i)'' for
``subsection (h)'' after ``an order issued under''. Former subsec. (m)
redesignated (n).
Pub. L. 97-320, Sec. 141(a)(8), which directed that, effective Oct.
13, 1986, the provisions of law amended by section 132 of Pub. L. 97-320
shall be amended to read as they would without such amendment, was
repealed by Pub. L. 100-86, Sec. 509(a). See Effective and Termination
Dates of 1982 Amendment note and Extension of Emergency Acquisition and
Net Worth Guarantee Provisions of Pub. L. 97-320 note set out under
section 1464 of this title.
Subsecs. (n) to (p). Pub. L. 97-320, Sec. 132(a)(1), redesignated
former subsecs. (m) to (o) as (n) to (p), respectively.
Pub. L. 97-320, Sec. 141(a)(8), which directed that, effective Oct.
13, 1986, the provisions of law amended by section 132 of Pub. L. 97-320
shall be amended to read as they would without such amendment, was
repealed by Pub. L. 100-86, Sec. 509(a). See Effective and Termination
Dates of 1982 Amendment note and Extension of Emergency Acquisition and
Net Worth Guarantee Provisions of Pub. L. 97-320 note set out under
section 1464 of this title.
1978--Subsecs. (a) to (d). Pub. L. 95-630, Sec. 502(b), substituted
``Board'' for ``Administrator'' wherever appearing, and ``it'' and
``its'' for ``he'' and ``his'', respectively, where appropriate.
Subsec. (e). Pub. L. 95-630, Secs. 107(a)(4), 502(b), substituted
``Board'' for ``Administrator'' wherever appearing, and in par. (1)
extended coverage of provisions to include directors, officers,
committee members, employees, agents, or other persons participating in
the conduct of the affairs of any insured credit union or credit union
which has insured accounts.
Subsec. (f). Pub. L. 95-630, Secs. 107(c)(4), 502(b), substituted
``Board'' for ``Administrator'' wherever appearing, inserted references
to any director, officer, committee member, employee, agent, or other
person participating in the conduct of the affairs of the credit union,
and inserted in par. (1) ``prior to the completion of the proceedings
conducted pursuant to paragraph (1) of subsection (e) of this section''
after ``its insured members'' and ``and to take affirmative action to
prevent such insolvency, dissipation, condition, or prejudice pending
completion of such proceedings'' after ``violation or practice''.
Subsec. (g). Pub. L. 95-630, Secs. 107(d)(4), 502(b), substituted
``Board'' for ``Administrator'' wherever appearing, in pars. (1), (2)
``its'' for ``his'', in par. (3) ``it'' for ``he'', ``or prohibit him''
for ``and/or prohibit him'', ``suspension or prohibition'' for
``suspension and/or prohibition'', and ``removal and prohibition'' for
``removal and/or prohibition'', and in par. (4) ``or to prohibit'' for
``and/or to prohibit'', ``removal or prohibition'' for ``removal and/or
prohibition'', and ``or prohibition'' for ``and/or prohibition''.
Subsec. (h). Pub. L. 95-630, Secs. 111(d)(1), 502(b), among other
changes, substituted ``Board'' for ``Administrator'' wherever appearing,
in par. (1) substituted ``Crime'' for ``felony'' in two places and
``subsection (g) of this section'' for ``paragraph (1) or (2) of
subsection (g) of this section'', inserted ``which is punishable by
imprisonment for a term exceeding one year under State or Federal law''
after ``or breach of trust'' and ``, if continued service or
participation by the individual may pose a threat to the interests of
the credit union's members or may threaten to impair public confidence
in the credit union'' after ``the Board may'' in two places, and
inserted provision that any notice of suspension or order of removal
issued under this paragraph remain effective and outstanding until the
completion of any hearing or appeal authorized under paragraph (3)
hereof unless terminated by the Board, and added par. (3).
Subsec. (i). Pub. L. 95-630, Secs. 111(d)(2), (3), 502(b),
substituted ``Board'' for ``Administrator'' wherever appearing, in par.
(1) substituted ``its'' for ``his'' and ``it'' for ``he'' and ``him''
and inserted ``(other than the hearing provided for in subsection (h)(3)
of this section)'' after ``provided for in this section'', and in par.
(2) substituted ``subsection (h)(1)'' for ``subsection (h)''.
Subsec. (j). Pub. L. 95-630, Secs. 107(e)(4), 502(b), designated
existing provisions as par. (1), added par. (2), and substituted
``Board'' for ``Administrator'' wherever appearing and ``its'' for
``his'' in par. (1).
Subsecs. (k) to (o). Pub. L. 95-630, Sec. 502(b), substituted
``Board'' for ``Administrator'' wherever appearing.
1977--Subsec. (g)(1). Pub. L. 95-22, Sec. 307(a), struck out ``and
that such violation or practice or breach of fiduciary duty is one
involving personal dishonesty on the part of such director, officer, or
committee member'' after ``or breach of fiduciary duty''.
Subsec. (g)(2). Pub. L. 95-22, Sec. 307(b), substituted ``dishonesty
or unfitness'' for ``dishonesty and unfitness'' wherever appearing.
1974--Subsec. (a). Pub. L. 93-383, Sec. 728(a), designated existing
provisions as par. (1) and added par. (2).
Subsec. (c). Pub. L. 93-383, Sec. 728(b), inserted ``(1)'' after
``(a)''.
Subsec. (d). Pub. L. 93-383, Sec. 728(c), designated existing
provisions as par. (1) and added pars. (2) and (3).
Change of Name
Oversight Board redesignated Thrift Depositor Protection Oversight
Board, effective Feb. 1, 1992, see section 302(a) of Pub. L. 102-233,
set out as a note under section 1441a of this title. Thrift Depositor
Protection Oversight Board abolished, see section 14(a)-(d) of Pub. L.
105-216, set out as a note under section 1441a of this title.
Effective Date of 1992 Amendment
Section 1501(c) of Pub. L. 102-550 provided that: ``The amendments
made by this section [amending this section and section 1821 of this
title] shall take effect on December 20, 1992.''
Effective Date of 1989 Amendment
Section 903(e) of Pub. L. 101-73 provided that: ``The amendments
made by this section [amending this section and section 1818 of this
title] shall apply with respect to violations committed and activities
engaged in after the date of the enactment of this Act [Aug. 9, 1989].''
Effective Date of 1978 Amendment
Amendment by sections 107(a)(4), (c)(4), (d)(4), and 111(d)(1)-(3)
of Pub. L. 95-630 effective upon expiration of 120 days after Nov. 10,
1978, see section 2101 of Pub. L. 95-630, set out as an Effective Date
note under section 375b of this title.
Amendment by section 107(e)(4) of Pub. L. 95-630 applicable to
violations occurring or continuing after Nov. 10, 1978, see section 109
of Pub. L. 95-630, set out as a note under section 93 of this title.
Amendment by section 502(b) of Pub. L. 95-630 effective on
expiration of 120 days after Nov. 10, 1978, and transitional provisions,
see section 509 of Pub. L. 95-630, set out as a note under section 1752
of this title.
Effective Date of Regulations Prescribed Under 1986 Amendment
The regulations required to be prescribed under amendment by Pub. L.
99-570 effective at end of 3-month period beginning on October 27, 1986,
see section 1364(e) of Pub. L. 99-570, set out as a note under section
1464 of this title.
Extension of Emergency Acquisition and Net Worth Guarantee Provisions of
Pub. L. 97-320
No amendment made by section 141(a) of Pub. L. 97-320, set out as a
note under section 1464 of this title, as in effect before Aug. 10,
1987, to any other provision of law to be deemed to have taken effect
before such date and any such provision of law to be in effect as if no
such amendment had been made before such date, see section 509(c) of
Pub. L. 100-86, set out as a note under section 1464 of this title.
No amendment made by section 141(a) of Pub. L. 97-320, set out as a
note under section 1464 of this title, as in effect on the day before
Oct. 8, 1986, to any other provision of law to be deemed to have taken
effect before such date and any such provision of law to be in effect as
if no such amendment had taken effect before such date, see section 1(c)
of Pub. L. 99-452, set out as a note under section 1464 of this title.
Section 141(a) of Pub. L. 97-320, set out as a note under section
1464 of this title, as in effect on the day after Aug. 27, 1986,
applicable as if included in Pub. L. 97-320 on Oct. 15, 1982, with no
amendment made by such section to any other provision of law to be
deemed to have taken effect before Aug. 27, 1986, and any such provision
of law to be in effect as if no such amendment had taken effect before
Aug. 27, 1986, see section 1(c) of Pub. L. 99-400, set out as a note
under section 1464 of this title.
Section Referred to in Other Sections
This section is referred to in sections 1759, 1772d, 1782, 1784,
1787, 3349, 3420 of this title; title 11 section 101; title 15 section
57a; title 31 sections 3121, 9110; title 42 section 669a.