Sec. 201 Pattern or practice of violations of Federal consumer protection laws
Determination—
Comptroller— The Comptroller shall regularly review and determine, in consultation with the Director of the Consumer Bureau, whether a national bank or Federal savings association affiliated with a global systemically important bank holding company, or a federally licensed branch, agency, commercial lending company, or representative office of any foreign bank affiliated with a global systemically important bank holding company is demonstrating a pattern or practice of violations of Federal consumer protection laws. Upon such a determination, the Comptroller shall provide a written, confidential notice within 7 days to the other Federal prudential banking agencies, Committee on Financial Services of the House of Representatives, and the Committee on Banking, Housing, and Urban Affairs of the Senate describing the review and any identified institution and, in consultation with the Director of the Consumer Bureau, immediately initiate additional enforcement actions or proceedings to either appoint a receiver or terminate the Federal charter of such institution, pursuant to subsection (c).
Board of Governors— The Board of Governors shall regularly review and determine, in consultation with the Director of the Consumer Bureau, whether a State member bank affiliated with a global systemically important bank holding company or State-chartered branch, agency, or representative office of a foreign bank affiliated with a global systemically important bank holding company is demonstrating a pattern or practice of violations of Federal consumer protection laws. Upon such a determination, the Board of Governors shall provide a written, confidential notice within 7 days to the other Federal prudential banking agencies, to the Committee on Financial Services of the House of Representatives, and the Committee on Banking, Housing, and Urban Affairs of the Senate describing the review and any identified institution and, in consultation with the Director of the Consumer Bureau, immediately initiate additional enforcement actions or proceedings to terminate the bank’s membership in the Federal Reserve System or the foreign bank’s activities in the United States, as applicable, pursuant to subsection (c).
Corporation— The Corporation shall regularly review and determine, in consultation with the Director of the Consumer Bureau, whether an insured depository institution affiliated with a global systemically important bank holding company is demonstrating a pattern or practice of violations of Federal consumer protection laws. Upon such a determination, the Corporation shall provide a written, confidential notice within 7 days to the other Federal prudential banking agencies, the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate describing the review and any identified institution and, in consultation with the Director of the Consumer Bureau, immediately initiate additional enforcement actions or proceedings to terminate the deposit insurance of the institution, pursuant to subsection (c).
Considerations—
In general— In making a determination under subsection (a) or paragraph (2), the Comptroller, the Board of Governors, and the Corporation, as applicable, shall consider whether the institution’s continued operations, activities, and functions are in the public interest, and whether the public benefits provided to consumers by the institution outweigh the harms posed by the institution, as well as whether the institution is meeting the convenience and needs of the communities served by the institution.
Recommendation by Director— Upon a finding by the Director of the Consumer Bureau that a national bank, State member bank, or Federal savings association affiliated with a global systemically important bank holding company, or a federally licensed branch, agency, representative office, or commercial lending company of a foreign bank affiliated with a global systemically important bank holding company is demonstrating a pattern or practice of violations of Federal consumer protection laws, the Director of the Consumer Bureau shall, within 7 days, recommend to the Comptroller, the Board of Governors, or the Corporation that determination should be made under subsection (a). The Comptroller, the Board of Governors, or the Corporation, as applicable, shall consider such recommendation and publicly respond in writing, including a detailed basis for its decision, within 90 days as to whether they will follow such recommendation.
Detailed Explanation— In making a determination under subsection (a), including in response to any recommendation made by the Director of the Consumer Bureau and in any written notice to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate, the Comptroller, the Board of Governors, or the Corporation, as applicable, shall include a detailed description of the review of the institution, the basis for its determination, and which of the enforcement actions or proceedings under subsection (c) that the agency has determined to take against the institution.
Public Hearings— The Comptroller, the Board of Governors, or the Corporation, as applicable, may convene public hearings to consider facts, observations, evidence, and testimony provided by any institution subject to a determination under this title as well as affected stakeholders. At least one public hearing must be granted if made at the written request of the institution subject to a determination under this title, the Director of the Consumer Bureau, or by relevant State or local government agencies from at least five States.
Annual report and testimony— Each Federal prudential banking agency shall annually submit a written report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate describing the actions the agency has taken to carry out the requirements of this Act, including the regular review required by this section, and a list of each violation of Federal law or regulation that was discovered or occurred in the previous 10 years for each global systemically important bank holding company, and any affiliate thereof, that is subject to the agency’s supervision. The Federal prudential banking agencies shall annually testify before the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on their respective annual report.
Consequence of determination—
In general— If a determination is made under subsection (a) with respect to an institution that is demonstrating a pattern or practice of violations of Federal consumer protection laws, the appropriate Federal banking agency, in consultation with the Director of the Consumer Bureau, shall take one or more of the following actions:
Remove responsible senior officers or directors of the institution, and permanently ban them from working at another banking organization, pursuant to section 8(e) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)).
Restrict certain lines of business of the institution, pursuant to section 8(b) of the Federal Deposit Insurance Act (12 U.S.C. 1818(b)).
Initiate proceedings to terminate the Federal charter of the institution, terminate a foreign bank’s ability to operate in the United States, or appoint a receiver pursuant to either title LXII of the Revised Statutes of the United States, the National Bank Receivership Act (12 U.S.C. 191 et seq.), or the Home Owners’ Loan Act (12 U.S.C. 1461 et seq.), with the identified pattern or practice of violations of Federal consumer protection laws deemed as grounds for appointing a conservator or receiver under the Federal Deposit Insurance Act or terminating deposit insurance pursuant to section 8(a) of the Federal Deposit Insurance Act (12 U.S.C. 1818(a)).
Recommendation by Director— If a determination is made under subsection (a) with respect to a national bank, Federal savings association, or federally licensed branch, agency, commercial lending company, or representative office of a foreign bank—
the Director of the Consumer Bureau may recommend to the Comptroller, the Board of Governors, or the Corporation what actions should be taken under this subsection; and
the Comptroller, the Board of Governors, or the Corporation, as applicable, shall consider such recommendation and publicly respond in writing within 30 days as to whether they will follow such recommendation.
Mandatory enforcement actions— If a determination is made under subsection (a), the Comptroller, the Board of Governors, or the Corporation, as applicable, shall take at least one of the actions described under paragraph (1). If a second determination is made under subsection (a) against the same institution after enforcement actions are taken under this section, the Comptroller, the Board of Governors, or the Corporation, as applicable, shall immediately initiate proceedings to terminate a Federal charter, a State member bank’s membership in the Federal Reserve System, a foreign bank’s ability to operate in the United States, or terminate deposit insurance.
Judicial review— A determination under subsection (a) shall be subject to review by a Federal district court of competent jurisdiction under the procedures provided for under section 8(h) of the Federal Deposit Insurance Act (12 U.S.C. 1818(h)).