12 USC 1820 - Administration of Corporation

View all text of Chapter 16 [§ 1811 - § 1835a]

§ 1820. Administration of Corporation

(a) Board of Directors; use of mails; cooperation with other Federal agencies

(b) Examinations

(1) Appointment of examiners and claims agents

(2) Regular examinationsAny examiner appointed under paragraph (1) shall have power, on behalf of the Corporation, to examine—

(A) any insured State nonmember bank or insured State branch of any foreign bank;

(B) any depository institution which files an application with the Corporation to become an insured depository institution; and

whenever the Board of Directors determines an examination of any such depository institution is necessary.

(3) Special examination of any insured depository institution

(A) In general

(B) Limitation

(4) Examination of affiliates

(A) In generalIn making any examination under paragraph (2) or (3), any examiner appointed under paragraph (1) shall have power, on behalf of the Corporation, to make such examinations of the affairs of any affiliate of any depository institution as may be necessary to disclose fully—

(i) the relationship between such depository institution and any such affiliate; and

(ii) the effect of such relationship on the depository institution.

(B) Commitment by foreign banks to allow examinations of affiliates

(5) Examination of insured State branchesThe Board of Directors shall—

(A) coordinate examinations of insured State branches of foreign banks with examinations conducted by the Board of Governors of the Federal Reserve System under section 3105(c)(1) of this title; and

(B) to the extent possible, participate in any simultaneous examination of the United States operations of a foreign bank requested by the Board under such section.

(6) Power and duty of examinersEach examiner appointed under paragraph (1) shall—

(A) have power to make a thorough examination of any insured depository institution or affiliate under paragraph (2), (3), (4), or (5); and

(B) shall make a full and detailed report of condition of any insured depository institution or affiliate examined to the Corporation.

(7) Power of claim agents

(d) Annual on-site examinations of all insured depository institutions required

(1) In general

(2) Examinations by Corporation

(3) State examinations acceptable

(4) 18-month rule for certain small institutionsParagraphs (1), (2), and (3) shall apply with “18-month” substituted for “12-month” if—

(A) the insured depository institution has total assets of less than $3,000,000,000;

(B) the institution is well capitalized, as defined in section 1831o of this title;

(i) was found to be outstanding; or

(ii) was found to be outstanding or good, in the case of an insured depository institution that has total assets of not more than $200,000,000;

(D) the insured institution is not currently subject to a formal enforcement proceeding or order by the Corporation or the appropriate Federal banking agency; and

(E) no person acquired control of the institution during the 12-month period in which a full-scope, on-site examination would be required but for this paragraph.

(5) Certain Government-controlled institutions exemptedParagraph (1) does not apply to—

(A) any institution for which the Corporation is conservator; or

(B) any bridge depository institution, none of the voting securities of which are owned by a person or agency other than the Corporation.

(6) Coordinated examinationsTo minimize the disruptive effects of examinations on the operations of insured depository institutions—

(A) each appropriate Federal banking agency shall, to the extent practicable and consistent with principles of safety and soundness and the public interest—

(i) coordinate examinations to be conducted by that agency at an insured depository institution and its affiliates;

(ii) coordinate with the other appropriate Federal banking agencies in the conduct of such examinations;

(iii) work to coordinate with the appropriate State bank supervisor—(I) the conduct of all examinations made pursuant to this subsection; and(II) the number, types, and frequency of reports required to be submitted to such agencies and supervisors by insured depository institutions, and the type and amount of information required to be included in such reports; and

(iv) use copies of reports of examinations of insured depository institutions made by any other Federal banking agency or appropriate State bank supervisor to eliminate duplicative requests for information; and

(B) not later than 2 years after September 23, 1994, the Federal banking agencies shall jointly establish and implement a system for determining which one of the Federal banking agencies or State bank supervisors shall be the lead agency responsible for managing a unified examination of each insured depository institution and its affiliates, as required by this subsection.

(7) Separate examinations permitted

(8) Report

(9) Standards for determining adequacy of State examinations

(10) Agencies authorized to increase maximum asset amount of institutions for certain purposes

(e) Examination fees

(1) Regular and special examinations of depository institutions

(2) Examination of affiliates

(3) Assessment against depository institution in case of affiliate’s refusal to pay

(A) In generalSubject to subparagraph (B), if any affiliate of any insured depository institution—

(i) refuses to pay any assessment under paragraph (2); or

(ii) fails to pay any such assessment before the end of the 60-day period beginning on the date the affiliate receives notice of the assessment,

the Corporation may assess such cost against, and collect such cost from, the depository institution.

(B) Affiliate of more than 1 depository institution

(4) Civil money penalty for affiliate’s refusal to cooperate

(A) Penalty imposedIf any affiliate of any insured depository institution—

(i) refuses to permit an examiner appointed by the Board of Directors under subsection (b)(1) to conduct an examination; or

(ii) refuses to provide any information required to be disclosed in the course of any examination,

the depository institution shall forfeit and pay a penalty of not more than $5,000 for each day that any such refusal continues.

(B) Assessment and collection

(5) Deposits of examination assessment

(f) Preservation of agency records

(1) In generalA Federal banking agency may cause any and all records, papers, or documents kept by the agency or in the possession or custody of the agency to be—

(A) photographed or microphotographed or otherwise reproduced upon film; or

(B) preserved in any electronic medium or format which is capable of—

(i) being read or scanned by computer; and

(ii) being reproduced from such electronic medium or format by printing any other form of reproduction of electronically stored data.

(2) Treatment as original records

(3) Authority of the Federal banking agencies

(g) Authority to prescribe regulations and definitionsExcept to the extent that authority under this chapter is conferred on any of the Federal banking agencies other than the Corporation, the Corporation may—

(1) prescribe regulations to carry out this chapter; and

(2) by regulation define terms as necessary to carry out this chapter.

(h) Coordination of examination authority

(1) State bank supervisors of home and host States

(A) Home State of bank

(B) Host State branches

(2) Host State examination

(A) In generalWith respect to a branch operated in a host State by an out-of-State insured State bank that resulted from an interstate merger transaction approved under section 1831u of this title, or that was established in such State pursuant to section 36(g) of this title, the third undesignated paragraph of section 321 of this title or section 1828(d)(4) of this title, the appropriate State bank supervisor of such host State may—

(i) with written notice to the State bank supervisor of the bank’s home State and subject to the terms of any applicable cooperative agreement with the State bank supervisor of such home State, examine such branch for the purpose of determining compliance with host State laws that are applicable pursuant to section 1831a(j) of this title, including those that govern community reinvestment, fair lending, and consumer protection; and

(ii) if expressly permitted under and subject to the terms of a cooperative agreement with the State bank supervisor of the bank’s home State or if such out-of-State insured State bank has been determined to be in a troubled condition by either the State bank supervisor of the bank’s home State or the bank’s appropriate Federal banking agency, participate in the examination of the bank by the State bank supervisor of the bank’s home State to ascertain that the activities of the branch in such host State are not conducted in an unsafe or unsound manner.

(B) Notice of determination

(i) In general

(ii) Timing of notice

(3) Host State enforcement

(4) Cooperative agreement

(A) In general

(B) Definition

(5) Federal regulatory authority

(6) State taxation authority not affected

(7) DefinitionsFor purpose of this section, the following definitions shall apply:

(A) Host State, home State, out-of-State bank

(B) State supervisory fees

(C) Troubled conditionSolely for purposes of paragraph (2)(B), an insured State bank has been determined to be in “troubled condition” if the bank—

(i) has a composite rating, as determined in its most recent report of examination, of 4 or 5 under the Uniform Financial Institutions Ratings System;

(ii) is subject to a proceeding initiated by the Corporation for termination or suspension of deposit insurance; or

(iii) is subject to a proceeding initiated by the State bank supervisor of the bank’s home State to vacate, revoke, or terminate the charter of the bank, or to liquidate the bank, or to appoint a receiver for the bank.

(D) Final determination

(i) Flood insurance compliance by insured depository institutions

(1) Examinations

(2) Report

(A) Requirement

(B) Contents

(j) Consultation among examiners

(1) In generalEach appropriate Federal banking agency shall take such action as may be necessary to ensure that examiners employed by the agency—

(A) consult on examination activities with respect to any depository institution; and

(B) achieve an agreement and resolve any inconsistencies in the recommendations to be given to such institution as a consequence of any examinations.

(2) Examiner-in-charge

(k) One-year restrictions on Federal examiners of financial institutions

(1) In generalIn addition to other applicable restrictions set forth in title 18, the penalties set forth in paragraph (6) of this subsection shall apply to any person who—

(A) was an officer or employee (including any special Government employee) of a Federal banking agency or a Federal reserve bank;

(B) served 2 or more months during the final 12 months of his or her employment with such agency or entity as the senior examiner (or a functionally equivalent position) of a depository institution or depository institution holding company with continuing, broad responsibility for the examination (or inspection) of that depository institution or depository institution holding company on behalf of the relevant agency or Federal reserve bank; and

(C) within 1 year after the termination date of his or her service or employment with such agency or entity, knowingly accepts compensation as an employee, officer, director, or consultant from—

(i) such depository institution, any depository institution holding company that controls such depository institution, or any other company that controls such depository institution; or

(ii) such depository institution holding company or any depository institution that is controlled by such depository institution holding company.

(2) DefinitionsFor purposes of this subsection—

(A) the term “depository institution” includes an uninsured branch or agency of a foreign bank, if such branch or agency is located in any State; and

(B) the term “depository institution holding company” includes any foreign bank or company described in section 3106(a) of this title.

(3) Rules of construction

(4) Regulations

(A) In general

(B) Consultation required

(5) Waiver

(A) Agency authority

(B) DefinitionFor purposes of this paragraph, the head of an agency is—

(i) the Comptroller of the Currency, in the case of the Office of the Comptroller of the Currency;

(ii) the Chairman of the Board of Governors of the Federal Reserve System, in the case of the Board of Governors of the Federal Reserve System; and

(iii) the Chairperson of the Board of Directors, in the case of the Corporation.

(6) Penalties

(A) In generalIn addition to any other administrative, civil, or criminal remedy or penalty that may otherwise apply, whenever a Federal banking agency determines that a person subject to paragraph (1) has become associated, in the manner described in paragraph (1)(C), with a depository institution, depository institution holding company, or other company for which such agency serves as the appropriate Federal banking agency, the agency shall impose upon such person one or more of the following penalties:

(i) Industry-wide prohibition orderThe Federal banking agency shall serve a written notice or order in accordance with and subject to the provisions of section 1818(e)(4) of this title for written notices or orders under paragraph (1) or (2) of section 1818(e) of this title, upon such person of the intention of the agency—(I) to remove such person from office or to prohibit such person from further participation in the conduct of the affairs of the depository institution, depository institution holding company, or other company for a period of up to 5 years; and(II) to prohibit any further participation by such person, in any manner, in the conduct of the affairs of any insured depository institution for a period of up to 5 years.

(ii) Civil monetary penalty

(B) Scope of prohibition order

(Sept. 21, 1950, ch. 967, § 2[10], 64 Stat. 882; Pub. L. 86–671, § 4, July 14, 1960, 74 Stat. 551; Pub. L. 89–695, title II, § 203, Oct. 16, 1966, 80 Stat. 1053; Pub. L. 91–452, title II, § 208, Oct. 15, 1970, 84 Stat. 929; Pub. L. 95–369, § 6(c)(16), Sept. 17, 1978, 92 Stat. 619; Pub. L. 95–630, title III, § 305, Nov. 10, 1978, 92 Stat. 3677; Pub. L. 97–320, title I, § 113(i), title IV, § 410(g), Oct. 15, 1982, 96 Stat. 1474, 1520; Pub. L. 100–418, title V, § 5115(c), Aug. 23, 1988, 102 Stat. 1433; Pub. L. 101–73, title II, §§ 201(a), 210, Aug. 9, 1989, 103 Stat. 187, 217; Pub. L. 102–242, title I, §§ 111(a), 113(a), (b), (c)(2), title II, § 203(c), title III, § 302(d), Dec. 19, 1991, 105 Stat. 2240, 2246–2248, 2292, 2349; Pub. L. 102–550, title XVI, §§ 1603(b)(1), (4), 1604(a)(3), 1605(a)(4), Oct. 28, 1992, 106 Stat. 4078, 4079, 4082, 4085; Pub. L. 102–558, title III, §§ 303(b)(5), 305, Oct. 28, 1992, 106 Stat. 4225, 4226; Pub. L. 103–325, title III, §§ 305(a), 306, 349(a), title V, § 529(a), title VI, § 602(a)(19), (20), Sept. 23, 1994, 108 Stat. 2216, 2217, 2242, 2266, 2289; Pub. L. 103–328, title I, § 105, Sept. 29, 1994, 108 Stat. 2357; Pub. L. 104–208, div. A, title II, §§ 2221, 2244, Sept. 30, 1996, 110 Stat. 3009–414, 3009–419; Pub. L. 108–386, § 8(a)(3), Oct. 30, 2004, 118 Stat. 2231; Pub. L. 108–458, title VI, § 6303(b), Dec. 17, 2004, 118 Stat. 3751; Pub. L. 109–351, title VI, § 605, title VII, §§ 711, 723(a), Oct. 13, 2006, 120 Stat. 1981, 1991, 2000; Pub. L. 109–473, § 1, Jan. 11, 2007, 120 Stat. 3561; Pub. L. 110–289, div. A, title VI, § 1604(b)(1)(B), July 30, 2008, 122 Stat. 2829; Pub. L. 111–203, title I, § 172(a), title III, §§ 318(d), 363(4), July 21, 2010, 124 Stat. 1438, 1527, 1552; Pub. L. 114–94, div. G, title LXXXIII, § 83001, Dec. 4, 2015, 129 Stat. 1796; Pub. L. 115–174, title II, § 210, May 24, 2018, 132 Stat. 1316.)