---
kind: "range"
citation: "12 U.S.C. §§ 4631–4641"
title: "12"
from: "4631"
to: "4641"
count: 13
release: "119-102"
url: "https://uscodex.org/usc/12/4631..4641"
---

# §4631. Cease-and-desist proceedings

- (a) **Issuance for unsafe or unsound practices and violations—**
  - (1) **Authority of Director—** If, in the opinion of the [Director](/usc/12/4502.md?p=9), a [regulated entity](/usc/12/4502.md?p=20) or any [entity-affiliated party](/usc/12/4502.md?p=11) is engaging or has engaged, or the [Director](/usc/12/4502.md?p=9) has reasonable cause to believe that the [regulated entity](/usc/12/4502.md?p=20) or any [entity-affiliated party](/usc/12/4502.md?p=11) is about to engage, in an unsafe or unsound practice in conducting the business of the [regulated entity](/usc/12/4502.md?p=20) or the [Office of Finance](/usc/12/4502.md?p=19), or is violating or has violated, or the [Director](/usc/12/4502.md?p=9) has reasonable cause to believe is about to violate, a law, rule, regulation, or order, or any condition imposed in writing by the [Director](/usc/12/4502.md?p=9) in connection with the granting of any application or other request by the [regulated entity](/usc/12/4502.md?p=20) or the [Office of Finance](/usc/12/4502.md?p=19) or any written agreement entered into with the [Director](/usc/12/4502.md?p=9), the [Director](/usc/12/4502.md?p=9) may issue and serve upon the [regulated entity](/usc/12/4502.md?p=20) or [entity-affiliated party](/usc/12/4502.md?p=11) a notice of charges in respect thereof.
  - (2) **Limitation—** The [Director](/usc/12/4502.md?p=9) may not, pursuant to this section, enforce compliance with any housing goal established under subpart 2 of part B of subchapter I of this chapter, with section [4566](/usc/12/4566.md) or [4567](/usc/12/4567.md) of this title, with subsection (m) or (n) of [section 1723a of this title](/usc/12/1723a.md), with subsection (e) or (f) of [section 1456 of this title](/usc/12/1456.md), or with paragraph (5) of [section 1430(j) of this title](/usc/12/1430.md?p=j).
- (b) **Issuance for unsatisfactory rating—** If a [regulated entity](/usc/12/4502.md?p=20) receives, in its most recent report of examination, a less-than-satisfactory rating for asset quality, management, earnings, or liquidity, the [Director](/usc/12/4502.md?p=9) may (if the deficiency is not corrected) deem the [regulated entity](/usc/12/4502.md?p=20) to be engaging in an unsafe or unsound practice for purposes of [subsection (a)](#a).
- (c) **Procedure—**
  - (1) **Notice of charges—** Each notice of charges under this section shall contain a statement of the facts constituting the alleged practice or [violation](/usc/12/4502.md?p=25) and shall fix a time and place at which a hearing will be held to determine on the record whether an order to cease and desist from such practice or [violation](/usc/12/4502.md?p=25) should issue, unless the party served with a notice of charges shall appear at the hearing personally or by a duly authorized representative, the party shall be deemed to have consented to the issuance of the cease and desist order.
  - (2) **Issuance of order—** If the [Director](/usc/12/4502.md?p=9) finds on the record made at such hearing that any practice or [violation](/usc/12/4502.md?p=25) specified in the notice of charges has been established (or the [regulated entity](/usc/12/4502.md?p=20) or [entity-affiliated party](/usc/12/4502.md?p=11) consents pursuant to [section 4633(a)(4) of this title](/usc/12/4633.md?p=a-4)), the [Director](/usc/12/4502.md?p=9) may issue and serve upon the [regulated entity](/usc/12/4502.md?p=20), [executive officer](/usc/12/4502.md?p=12), [director](/usc/12/4502.md?p=9), or [entity-affiliated party](/usc/12/4502.md?p=11) an order requiring such party to cease and desist from any such practice or [violation](/usc/12/4502.md?p=25) and to take affirmative action to correct or remedy the conditions resulting from any such practice or [violation](/usc/12/4502.md?p=25).
- (d) **Affirmative action to correct conditions resulting from violations or activities—** The authority under this section and [section 4632 of this title](/usc/12/4632.md) to issue any order requiring a [regulated entity](/usc/12/4502.md?p=20), [executive officer](/usc/12/4502.md?p=12), [director](/usc/12/4502.md?p=9), or [entity-affiliated party](/usc/12/4502.md?p=11) to take affirmative action to correct or remedy any condition resulting from any practice or [violation](/usc/12/4502.md?p=25) with respect to which such order is issued [includes](/usc/12/25b.md?p=a-3) the authority to require a [regulated entity](/usc/12/4502.md?p=20) or [entity-affiliated party](/usc/12/4502.md?p=11)—
  - (1) make[^1] restitution to, or provide reimbursement, indemnification, or guarantee against loss, if—
    - (A) such entity or party or finance facility was unjustly enriched in connection with such practice or [violation](/usc/12/4502.md?p=25); or
    - (B) the [violation](/usc/12/4502.md?p=25) or practice involved a reckless disregard for the law or any applicable regulations or prior order of the [Director](/usc/12/4502.md?p=9);
  - (2) to require a [regulated entity](/usc/12/4502.md?p=20) to seek restitution, or to obtain reimbursement, indemnification, or guarantee against loss;
  - (3) to restrict the growth of the [regulated entity](/usc/12/4502.md?p=20);
  - (4) to require the [regulated entity](/usc/12/4502.md?p=20) to dispose of any loan or asset involved;
  - (5) to require the [regulated entity](/usc/12/4502.md?p=20) to rescind agreements or contracts;
  - (6) to require the [regulated entity](/usc/12/4502.md?p=20) to employ qualified officers or employees (who may be subject to approval by the [Director](/usc/12/4502.md?p=9) at the direction of the [Director](/usc/12/4502.md?p=9)); and
  - (7) to require the [regulated entity](/usc/12/4502.md?p=20) to take such other action as the [Director](/usc/12/4502.md?p=9) determines appropriate.
- (e) **Authority to limit activities—** The authority to issue an order under this section or [section 4632 of this title](/usc/12/4632.md) [includes](/usc/12/25b.md?p=a-3) the authority to place limitations on the activities or functions of the [regulated entity](/usc/12/4502.md?p=20) or [entity-affiliated party](/usc/12/4502.md?p=11) or any [executive officer](/usc/12/4502.md?p=12) or [director](/usc/12/4502.md?p=9) of the [regulated entity](/usc/12/4502.md?p=20) or [entity-affiliated party](/usc/12/4502.md?p=11).
- (f) **Effective date—** An order under this section shall become effective upon the expiration of the 30-day period beginning on the service of the order upon the [regulated entity](/usc/12/4502.md?p=20), finance facility,,[^2] [executive officer](/usc/12/4502.md?p=12), [director](/usc/12/4502.md?p=9), or [entity-affiliated party](/usc/12/4502.md?p=11) concerned (except in the case of an order issued upon consent, which shall become effective at the time specified therein), and shall remain effective and enforceable as provided in the order, except to the extent that the order is stayed, modified, terminated, or set aside by action of the [Director](/usc/12/4502.md?p=9) or otherwise, as provided in this subchapter.

# §4632. Temporary cease-and-desist orders

- (a) **Grounds for issuance—**
  - (1) **In general—** If the [Director](/usc/12/4502.md?p=9) determines that the actions specified in the notice of charges served upon a [regulated entity](/usc/12/4502.md?p=20) or any [entity-affiliated party](/usc/12/4502.md?p=11) pursuant to [section 4631(a) of this title](/usc/12/4631.md?p=a), or the continuation thereof, is likely to cause insolvency or significant dissipation of assets or earnings of that entity, or is likely to weaken the condition of that entity prior to the completion of the proceedings conducted pursuant to sections [4631](/usc/12/4631.md) and [4633](/usc/12/4633.md) of this title, the [Director](/usc/12/4502.md?p=9) may—
    - (A) issue a temporary order requiring that [regulated entity](/usc/12/4502.md?p=20) or [entity-affiliated party](/usc/12/4502.md?p=11) to cease and desist from any such [violation](/usc/12/4502.md?p=25) or practice; and
    - (B) require that [regulated entity](/usc/12/4502.md?p=20) or [entity-affiliated party](/usc/12/4502.md?p=11) to take affirmative action to prevent or remedy such insolvency, dissipation, condition, or prejudice pending completion of such proceedings.
  - (2) **Additional requirements—** An order issued under [paragraph (1)](#a-1) may include any requirement authorized under sub[section 4631(d) of this title](/usc/12/4631.md?p=d).
- (b) **Effective date—** An order issued pursuant to [subsection (a)](#a) shall become effective upon service upon the [regulated entity](/usc/12/4502.md?p=20), [executive officer](/usc/12/4502.md?p=12), [director](/usc/12/4502.md?p=9), or [entity-affiliated party](/usc/12/4502.md?p=11) and, unless set aside, limited, or suspended by a court in proceedings pursuant to [subsection (d)](#d), shall remain in effect and enforceable pending the completion of the proceedings pursuant to such notice and shall remain effective until the [Director](/usc/12/4502.md?p=9) dismisses the charges specified in the notice or until superseded by a cease-and-desist order issued pursuant to [section 4631 of this title](/usc/12/4631.md).
- (c) **Incomplete or inaccurate records—**
  - (1) **Temporary order—** If a notice of charges served under section [4631(a)](/usc/12/4631.md?p=a) or [(b)](/usc/12/4631.md?p=b) of this title specifies on the basis of particular facts and circumstances that the books and records of the [regulated entity](/usc/12/4502.md?p=20) served are so incomplete or inaccurate that the [Director](/usc/12/4502.md?p=9) is unable, through the normal supervisory process, to determine the financial condition of the [regulated entity](/usc/12/4502.md?p=20) or the details or the purpose of any transaction or transactions that may have a material effect on the financial condition of that [regulated entity](/usc/12/4502.md?p=20), the [Director](/usc/12/4502.md?p=9) may issue a temporary order requiring—
    - (A) the cessation of any activity or practice which gave rise, whether in whole or in part, to the incomplete or inaccurate [state](/usc/12/4502.md?p=22) of the books or records; or
    - (B) affirmative action to restore the books or records to a complete and accurate [state](/usc/12/4502.md?p=22).
  - (2) **Effective period—** Any temporary order issued under [paragraph (1)](#c-1)—
    - (A) shall become effective upon service; and
    - (B) unless set aside, limited, or suspended by a court in proceedings pursuant to [subsection (d)](#d), shall remain in effect and enforceable until the earlier of—
      - (i) the completion of the proceeding initiated under [section 4631 of this title](/usc/12/4631.md) in connection with the notice of charges; or
      - (ii) the date the [Director](/usc/12/4502.md?p=9) determines, by examination or otherwise, that the books and records of the [regulated entity](/usc/12/4502.md?p=20) are accurate and reflect the financial condition of the [regulated entity](/usc/12/4502.md?p=20).
- (d) **Judicial review—** A [regulated entity](/usc/12/4502.md?p=20), [executive officer](/usc/12/4502.md?p=12), [director](/usc/12/4502.md?p=9), or [entity-affiliated party](/usc/12/4502.md?p=11) that has been served with a temporary order pursuant to this section may apply to the United States [District](/usc/12/221a.md?p=a) Court for the District of Columbia within 10 days after such service for an injunction setting aside, limiting, or suspending the enforcement, operation, or effectiveness of the order pending the completion of the administrative proceedings pursuant to the notice of charges served upon the [enterprise](/usc/12/4502.md?p=10), [executive officer](/usc/12/4502.md?p=12), [director](/usc/12/4502.md?p=9), or [entity-affiliated party](/usc/12/4502.md?p=11) under section [4631(a)](/usc/12/4631.md?p=a) or [(b)](/usc/12/4631.md?p=b) of this title. Such court shall have jurisdiction to issue such injunction.
- (e) **Enforcement by Attorney General—** In the case of [violation](/usc/12/4502.md?p=25) or threatened [violation](/usc/12/4502.md?p=25) of, or failure to obey, a temporary order issued pursuant to this section, the [Director](/usc/12/4502.md?p=9) may bring an action in the United States [District](/usc/12/221a.md?p=a) Court for the District of Columbia for an injunction to enforce such order. If the court finds any such [violation](/usc/12/4502.md?p=25), threatened [violation](/usc/12/4502.md?p=25), or failure to obey, the court shall issue such injunction.

# §4633. Hearings

- (a) **Requirements—**
  - (1) **Venue and record—** Any hearing under section [4631](/usc/12/4631.md), [4636(c)](/usc/12/4636.md?p=c), or [4636a](/usc/12/4636a.md) of this title shall be held on the record and in the District of Columbia.
  - (2) **Timing—** Any such hearing shall be fixed for a date not earlier than 30 days nor later than 60 days after service of the notice of charges under section [4631](/usc/12/4631.md) or [4636a](/usc/12/4636a.md) of this title or determination to impose a penalty under [section 4636 of this title](/usc/12/4636.md), unless an earlier or a later date is set by the hearing officer at the request of the party served.
  - (3) **Procedure—** Any such hearing shall be conducted in accordance with [chapter 5](/usc/5/chptI-ch5.md) of title 5.
  - (4) **Failure to appear—** If the party served fails to appear at the hearing through a duly authorized representative, such party shall be deemed to have consented to the issuance of the cease-and-desist or removal or prohibition order or the imposition of the penalty for which the hearing is held.
- (b) **Issuance of order—**
  - (1) **In general—** After any such hearing, and within 90 days after the parties have been notified that the case has been submitted to the [Director](/usc/12/4502.md?p=9) for final decision, the [Director](/usc/12/4502.md?p=9) shall render the decision (which shall include findings of fact upon which the decision is predicated) and shall issue and serve upon each party to the proceeding an order or orders consistent with the provisions of this subchapter.
  - (2) **Modification—** Judicial review of any such order shall be exclusively as provided in [section 4634 of this title](/usc/12/4634.md). Unless such a petition for review is timely filed as provided in [section 4634 of this title](/usc/12/4634.md), and thereafter until the record in the proceeding has been filed as so provided, the [Director](/usc/12/4502.md?p=9) may at any time, modify, terminate, or set aside any such order, upon such notice and in such manner as the [Director](/usc/12/4502.md?p=9) considers proper. Upon such filing of the record, the [Director](/usc/12/4502.md?p=9) may modify, terminate, or set aside any such order with permission of the court.

# §4634. Judicial review

- (a) **Commencement—** Any party to a proceeding under [section 4631](/usc/12/4631.md)[^1] 4513b, 4636, or 4636a of this title may obtain review of any final order issued under this chapter by filing in the United States Court of Appeals for the District of Columbia Circuit, within 30 days after the date of service of such order, a written petition praying that the order of the [Director](/usc/12/4502.md?p=9) be modified, terminated, or set aside. The clerk of the court shall transmit a copy of the petition to the [Director](/usc/12/4502.md?p=9).
- (b) **Filing of record—** Upon receiving a copy of a petition, the [Director](/usc/12/4502.md?p=9) shall file in the court the record in the proceeding, as provided in [section 2112 of title 28](/usc/28/2112.md).
- (c) **Jurisdiction—** Upon the filing of a petition, such court shall have jurisdiction, which upon the filing of the record by the [Director](/usc/12/4502.md?p=9) shall (except as provided in the last sentence of [section 4633(b)(2) of this title](/usc/12/4633.md?p=b-2)) be exclusive, to affirm, modify, terminate, or set aside, in whole or in part, the order of the [Director](/usc/12/4502.md?p=9).
- (d) **Review—** Review of such proceedings shall be governed by [chapter 7](/usc/5/chptI-ch7.md) of title 5.
- (e) **Order to pay penalty—** Such court shall have the authority in any such review to order payment of any penalty imposed by the [Director](/usc/12/4502.md?p=9) under this subchapter.
- (f) **No automatic stay—** The commencement of proceedings for judicial review under this section shall not, unless specifically ordered by the court, operate as a stay of any order issued by the [Director](/usc/12/4502.md?p=9).

# §4635. Enforcement and jurisdiction

- (a) **Enforcement—** The [Director](/usc/12/4502.md?p=9) may, in the discretion of the [Director](/usc/12/4502.md?p=9), apply to the United States [District](/usc/12/221a.md?p=a) Court for the District of Columbia, or the United States [district](/usc/12/221a.md?p=a) court within the jurisdiction of which the headquarters of the [regulated entity](/usc/12/4502.md?p=20) is located, for the enforcement of any effective and outstanding notice or order issued under this subchapter or subchapter II, or request that the Attorney General of the United States bring such an action. Such court shall have jurisdiction and power to order and require compliance with such notice or order.
- (b) **Limitation on jurisdiction—** Except as otherwise provided in this subchapter and sections 4619[^1] and 4623 of this title, no court shall have jurisdiction to affect, by injunction or otherwise, the issuance or enforcement of any notice or order under section [4631](/usc/12/4631.md), [4632](/usc/12/4632.md), [4513b](/usc/12/4513b.md), [4636](/usc/12/4636.md), or [4636a](/usc/12/4636a.md) of this title, or subchapter II, or to review, modify, suspend, terminate, or set aside any such notice or order.

# §4636. Civil money penalties

- (a) **In general—** The [Director](/usc/12/4502.md?p=9) may impose a civil money penalty in accordance with this section on any [regulated entity](/usc/12/4502.md?p=20) or any [entity-affiliated party](/usc/12/4502.md?p=11). The [Director](/usc/12/4502.md?p=9) shall not impose a civil penalty in accordance with this section on any [regulated entity](/usc/12/4502.md?p=20) or any [entity-affiliated party](/usc/12/4502.md?p=11) for any [violation](/usc/12/4502.md?p=25) that is addressed under [section 4585(a) of this title](/usc/12/4585.md?p=a).
- (b) **Amount of penalty—**
  - (1) **First tier—** A [regulated entity](/usc/12/4502.md?p=20) or [entity-affiliated party](/usc/12/4502.md?p=11) shall forfeit and pay a civil penalty of not more than $10,000 for each day during which a [violation](/usc/12/4502.md?p=25) continues, if such [regulated entity](/usc/12/4502.md?p=20) or party—
    - (A) violates any provision of this chapter, the [authorizing statutes](/usc/12/4502.md?p=3), or any order, condition, rule, or regulation under this chapter or any authorizing statute;
    - (B) violates any final or temporary order or notice issued pursuant to this chapter;
    - (C) violates any condition imposed in writing by the [Director](/usc/12/4502.md?p=9) in connection with the grant of any application or other request by such [regulated entity](/usc/12/4502.md?p=20); or
    - (D) violates any written agreement between the [regulated entity](/usc/12/4502.md?p=20) and the [Director](/usc/12/4502.md?p=9).
  - (2) **Second tier—** Notwithstanding [paragraph (1)](#b-1), a [regulated entity](/usc/12/4502.md?p=20) or [entity-affiliated party](/usc/12/4502.md?p=11) shall forfeit and pay a civil penalty of not more than $50,000 for each day during which a [violation](/usc/12/4502.md?p=25), practice, or breach continues, if—
    - (A) the [regulated entity](/usc/12/4502.md?p=20) or [entity-affiliated party](/usc/12/4502.md?p=11), respectively—
      - (i) commits any [violation](/usc/12/4502.md?p=25) described in any subparagraph of [paragraph (1)](#b-1);
      - (ii) recklessly engages in an unsafe or unsound practice in conducting the affairs of the [regulated entity](/usc/12/4502.md?p=20); or
      - (iii) breaches any fiduciary duty; and
    - (B) the [violation](/usc/12/4502.md?p=25), practice, or breach—
      - (i) is part of a pattern of misconduct;
      - (ii) causes or is likely to cause more than a minimal loss to the [regulated entity](/usc/12/4502.md?p=20); or
      - (iii) results in pecuniary gain or other benefit to such party.
  - (3) **Third tier—** Notwithstanding paragraphs [(1)](#b-1) and [(2)](#b-2), any [regulated entity](/usc/12/4502.md?p=20) or [entity-affiliated party](/usc/12/4502.md?p=11) shall forfeit and pay a civil penalty in an amount not to exceed the applicable maximum amount determined under [paragraph (4)](#b-4) for each day during which such [violation](/usc/12/4502.md?p=25), practice, or breach continues, if such [regulated entity](/usc/12/4502.md?p=20) or [entity-affiliated party](/usc/12/4502.md?p=11)—
    - (A) knowingly—
      - (i) commits any [violation](/usc/12/4502.md?p=25) described in any subparagraph of [paragraph (1)](#b-1);
      - (ii) engages in any unsafe or unsound practice in conducting the affairs of the [regulated entity](/usc/12/4502.md?p=20); or
      - (iii) breaches any fiduciary duty; and
    - (B) knowingly or recklessly causes a substantial loss to the [regulated entity](/usc/12/4502.md?p=20) or a substantial pecuniary gain or other benefit to such party by reason of such [violation](/usc/12/4502.md?p=25), practice, or breach.
  - (4) **Maximum amounts of penalties for any violation described in paragraph (3)—** The maximum daily amount of any civil penalty which may be assessed pursuant to [paragraph (3)](#b-3) for any [violation](/usc/12/4502.md?p=25), practice, or breach described in [paragraph (3)](#b-3) is—
    - (A) in the case of any [entity-affiliated party](/usc/12/4502.md?p=11), an amount not to exceed $2,000,000; and
    - (B) in the case of any [regulated entity](/usc/12/4502.md?p=20), $2,000,000.
- (c) **Procedures—**
  - (1) **Establishment—** The [Director](/usc/12/4502.md?p=9) shall establish standards and procedures governing the imposition of civil money penalties under subsections [(a)](#a) and [(b)](#b). Such standards and procedures—
    - (A) shall provide for the [Director](/usc/12/4502.md?p=9) to notify the [regulated entity](/usc/12/4502.md?p=20) or [entity-affiliated party](/usc/12/4502.md?p=11) in writing of the [Director](/usc/12/4502.md?p=9)’s determination to impose the penalty, which shall be made on the record;
    - (B) shall provide for the imposition of a penalty only after the [regulated entity](/usc/12/4502.md?p=20), [executive officer](/usc/12/4502.md?p=12), or [director](/usc/12/4502.md?p=9) or [entity-affiliated party](/usc/12/4502.md?p=11) has been given an opportunity for a hearing on the record pursuant to [section 4633 of this title](/usc/12/4633.md); and
    - (C) may provide for review by the [Director](/usc/12/4502.md?p=9) of any determination or order, or interlocutory ruling, arising from a hearing.
  - (2) **Factors in determining amount of penalty—** In determining the amount of a penalty under this section, the [Director](/usc/12/4502.md?p=9) shall give consideration to such factors as the gravity of the [violation](/usc/12/4502.md?p=25), any history of prior [violations](/usc/12/4502.md?p=25), the effect of the penalty on the safety and soundness of the [regulated entity](/usc/12/4502.md?p=20), any injury to the public, any benefits received, and deterrence of future [violations](/usc/12/4502.md?p=25), and any other factors the [Director](/usc/12/4502.md?p=9) may determine by regulation to be appropriate.
  - (3) **Review of imposition of penalty—** The order of the [Director](/usc/12/4502.md?p=9) imposing a penalty under this section shall not be subject to review, except as provided in [section 4634 of this title](/usc/12/4634.md).
- (d) **Action to collect penalty—** If a [regulated entity](/usc/12/4502.md?p=20), [executive officer](/usc/12/4502.md?p=12), [director](/usc/12/4502.md?p=9), or [entity-affiliated party](/usc/12/4502.md?p=11) fails to comply with an order of the [Director](/usc/12/4502.md?p=9) imposing a civil money penalty under this section, after the order is no longer subject to review as provided under [subsection (c)(1)](#c-1), the [Director](/usc/12/4502.md?p=9) may bring an action in the United States [District](/usc/12/221a.md?p=a) Court for the District of Columbia, or the United States [district](/usc/12/221a.md?p=a) court within the jurisdiction of which the headquarters of the [regulated entity](/usc/12/4502.md?p=20) is located, to obtain a monetary judgment against the [regulated entity](/usc/12/4502.md?p=20), [executive officer](/usc/12/4502.md?p=12), [director](/usc/12/4502.md?p=9), or [entity-affiliated party](/usc/12/4502.md?p=11) and such other relief as may be available. The monetary judgment may, in the discretion of the court, include any attorneys fees and other expenses incurred by the United States in connection with the action. In an action under this subsection, the validity and appropriateness of the order of the [Director](/usc/12/4502.md?p=9) imposing the penalty shall not be subject to review.
- (e) **Settlement by Director—** The [Director](/usc/12/4502.md?p=9) may compromise, modify, or remit any civil money penalty which may be, or has been, imposed under this section.
- (f) **Availability of other remedies—** Any civil money penalty under this section shall be in addition to any other available civil remedy and may be imposed whether or not the [Director](/usc/12/4502.md?p=9) imposes other administrative sanctions.
- (g) **Prohibition of reimbursement or indemnification—** A [regulated entity](/usc/12/4502.md?p=20) may not reimburse or indemnify any individual for any penalty imposed under [subsection (b)(3)](#b-3).
- (h) **Deposit of penalties—** The [Director](/usc/12/4502.md?p=9) shall [deposit](/usc/12/5301.md?p=18-A) any civil money penalties collected under this section into the general [fund](/usc/12/4702.md?p=10) of the Treasury.
- (i) **Applicability—** A penalty under this section may be imposed only for conduct or [violations](/usc/12/4502.md?p=25) under [subsection (a)](#a) occurring after October 28, 1992.

# §4636a. Removal and prohibition authority

- (a) **Authority to issue order—**
  - (1) **In general—** The [Director](/usc/12/4502.md?p=9) may serve upon a party described in [paragraph (2)](#a-2), or any officer, [director](/usc/12/4502.md?p=9), or management of the [Office of Finance](/usc/12/4502.md?p=19) a written notice of the intention of the [Director](/usc/12/4502.md?p=9) to suspend or remove such party from [office](/usc/12/2279bb.md?p=4), or prohibit any further [participation](/usc/12/2206a.md?p=a-1) by such party, in any manner, in the conduct of the affairs of the [regulated entity](/usc/12/4502.md?p=20).
  - (2) **Applicability—** A party described in this paragraph is an [entity-affiliated party](/usc/12/4502.md?p=11) or any officer, [director](/usc/12/4502.md?p=9), or management of the [Office of Finance](/usc/12/4502.md?p=19), if the [Director](/usc/12/4502.md?p=9) determines that—
    - (A) that party, officer, or [director](/usc/12/4502.md?p=9) has, directly or indirectly—
      - (i) violated—
        - (I) any law or regulation;
        - (II) any cease and desist [order which has become final](/usc/12/2271.md?p=1);
        - (III) any condition imposed in writing by the [Director](/usc/12/4502.md?p=9) in connection with the grant of any application or other request by such [regulated entity](/usc/12/4502.md?p=20); or
        - (IV) any written agreement between such [regulated entity](/usc/12/4502.md?p=20) and the [Director](/usc/12/4502.md?p=9);
      - (ii) engaged or participated in any unsafe or unsound practice in connection with any [regulated entity](/usc/12/4502.md?p=20) 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](/usc/12/4502.md?p=25), practice, or breach described in [subparagraph (A)](#a-2-A)—
      - (i) such [regulated entity](/usc/12/4502.md?p=20) or business institution has suffered or will probably suffer financial loss or other damage; or
      - (ii) such party has received financial gain or other benefit; and
    - (C) the [violation](/usc/12/4502.md?p=25), practice, or breach described in [subparagraph (A)](#a-2-A)—
      - (i) involves personal dishonesty on the part of such party; or
      - (ii) demonstrates willful or continuing disregard by such party for the safety or soundness of such [regulated entity](/usc/12/4502.md?p=20) or business institution.
- (b) **Suspension order—**
  - (1) **Suspension or prohibition authority—** If the [Director](/usc/12/4502.md?p=9) serves written notice under [subsection (a)](#a) upon a party subject to that [subsection (a)](#a), the [Director](/usc/12/4502.md?p=9) may, by order, suspend or remove such party from [office](/usc/12/2279bb.md?p=4), or prohibit such party from further [participation](/usc/12/2206a.md?p=a-1) in any manner in the conduct of the affairs of the [regulated entity](/usc/12/4502.md?p=20), if the [Director](/usc/12/4502.md?p=9)—
    - (A) determines that such action is necessary for the protection of the [regulated entity](/usc/12/4502.md?p=20); and
    - (B) serves such party with written notice of the order.
  - (2) **Effective period—** Any order issued under this subsection—
    - (A) shall become effective upon service; and
    - (B) unless a court issues a stay of such order under [subsection (g)](#g), shall remain in effect and enforceable until—
      - (i) the date on which the [Director](/usc/12/4502.md?p=9) dismisses the charges contained in the notice served under [subsection (a)](#a) with respect to such party; or
      - (ii) the effective date of an order issued under [subsection (b)](#b).
  - (3) **Copy of order—** If the [Director](/usc/12/4502.md?p=9) issues an order under [subsection (b)](#b) to any party, the [Director](/usc/12/4502.md?p=9) shall serve a copy of such order on any [regulated entity](/usc/12/4502.md?p=20) with which such party is affiliated at the time such order is issued.
- (c) **Notice, hearing, and order—**
  - (1) **Notice—** A notice under [subsection (a)](#a) of the intention of the [Director](/usc/12/4502.md?p=9) to issue an order under this section shall contain a statement of the facts constituting grounds for such action, and shall fix a time and place at which a hearing will be held on such action.
  - (2) **Timing of hearing—** A hearing shall be fixed for a date not earlier than 30 days, nor later than 60 days, after the date of service of notice under [subsection (a)](#a), unless an earlier or a later date is set by the [Director](/usc/12/4502.md?p=9) at the request of—
    - (A) the party receiving such notice, and good cause is shown; or
    - (B) the Attorney General of the United States.
  - (3) **Consent—** Unless the party that is the subject of a notice delivered under [subsection (a)](#a) appears at the hearing in [person](/usc/12/5481.md?p=19) or by a duly authorized representative, such party shall be deemed to have consented to the issuance of an order under this section.
  - (4) **Issuance of order of suspension—** The [Director](/usc/12/4502.md?p=9) may issue an order under this section, as the [Director](/usc/12/4502.md?p=9) may deem appropriate, if—
    - (A) a party is deemed to have consented to the issuance of an order under [paragraph (3)](#c-3); or
    - (B) upon the record made at the hearing, the [Director](/usc/12/4502.md?p=9) finds that any of the grounds specified in the notice have been established.
  - (5) **Effectiveness of order—** Any order issued under [paragraph (4)](#c-4) shall become effective at the expiration of 30 days after the date of service upon the relevant [regulated entity](/usc/12/4502.md?p=20) and party (except in the case of an order issued upon consent under [paragraph (3)](#c-3), 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 [Director](/usc/12/4502.md?p=9) or a reviewing court.
- (d) **Prohibition of certain specific activities—** [Any person](/usc/12/1715z–4a.md?p=a-2) subject to an order issued under this section shall not—
  - (1) [participate](/usc/12/2206a.md?p=a-1) in any manner in the conduct of the affairs of any [regulated entity](/usc/12/4502.md?p=20) or the [Office of Finance](/usc/12/4502.md?p=19);
  - (2) solicit, procure, transfer, attempt to transfer, vote, or attempt to vote any proxy, consent, or authorization with respect to any voting rights in any [regulated entity](/usc/12/4502.md?p=20);
  - (3) violate any voting agreement previously approved by the [Director](/usc/12/4502.md?p=9); or
  - (4) vote for a [director](/usc/12/4502.md?p=9), or serve or act as an [entity-affiliated party](/usc/12/4502.md?p=11) of a [regulated entity](/usc/12/4502.md?p=20) or as an officer or [director](/usc/12/4502.md?p=9) of the [Office of Finance](/usc/12/4502.md?p=19).
- (e) **Industry-wide prohibition—**
  - (1) **In general—** Except as provided in [paragraph (2)](#e-2), [any person](/usc/12/1715z–4a.md?p=a-2) who, pursuant to an order issued under this section, has been removed or suspended from [office](/usc/12/2279bb.md?p=4) in a [regulated entity](/usc/12/4502.md?p=20) or the [Office of Finance](/usc/12/4502.md?p=19), or prohibited from participating in the conduct of the affairs of a [regulated entity](/usc/12/4502.md?p=20) or the [Office of Finance](/usc/12/4502.md?p=19), may not, while such order is in effect, continue or commence to hold any [office](/usc/12/2279bb.md?p=4) in, or [participate](/usc/12/2206a.md?p=a-1) in any manner in the conduct of the affairs of, any [regulated entity](/usc/12/4502.md?p=20) or the [Office of Finance](/usc/12/4502.md?p=19).
  - (2) **Exception if Director provides written consent—** If, on or after the date on which an order is issued under this section which removes or suspends from [office](/usc/12/2279bb.md?p=4) any party, or prohibits such party from participating in the conduct of the affairs of a [regulated entity](/usc/12/4502.md?p=20) or the [Office of Finance](/usc/12/4502.md?p=19), such party receives the written consent of the [Director](/usc/12/4502.md?p=9), the order shall, to the extent of such consent, cease to apply to such party with respect to the [regulated entity](/usc/12/4502.md?p=20) or such [Office of Finance](/usc/12/4502.md?p=19) described in the written consent. Any such consent shall be publicly disclosed.
  - (3) **Violation of paragraph (1) treated as violation of order—** Any [violation](/usc/12/4502.md?p=25) of [paragraph (1)](#e-1) by [any person](/usc/12/1715z–4a.md?p=a-2) who is subject to an order issued under [subsection (h)](#h) shall be treated as a [violation](/usc/12/4502.md?p=25) of the order.
- (f) **Applicability—** This section shall only apply to a [person](/usc/12/5481.md?p=19) who is an individual, unless the [Director](/usc/12/4502.md?p=9) specifically finds that it should apply to a [corporation](/usc/12/2277a.md?p=2), firm, or other business entity.
- (g) **Stay of suspension and prohibition of entity-affiliated party—** Not later than 10 days after the date on which any [entity-affiliated party](/usc/12/4502.md?p=11) has been suspended from [office](/usc/12/2279bb.md?p=4) or prohibited from [participation](/usc/12/2206a.md?p=a-1) in the conduct of the affairs of a [regulated entity](/usc/12/4502.md?p=20) under this section, such party may apply to the United States [District](/usc/12/221a.md?p=a) Court for the District of Columbia, or the United States [district](/usc/12/221a.md?p=a) court for the judicial [district](/usc/12/221a.md?p=a) in which the headquarters of the [regulated entity](/usc/12/4502.md?p=20) is located, for a stay of such suspension or prohibition pending the completion of the administrative proceedings pursuant to [subsection (c)](#c). The court shall have jurisdiction to stay such suspension or prohibition.
- (h) **Suspension or removal of entity-affiliated party charged with felony—**
  - (1) **Suspension or prohibition—**
    - (A) **In general—** Whenever any [entity-affiliated party](/usc/12/4502.md?p=11) is charged in any information, indictment, or complaint, with the commission of or [participation](/usc/12/2206a.md?p=a-1) in a crime involving dishonesty or breach of trust which is punishable by imprisonment for a term exceeding 1 year under Federal or [State](/usc/12/4502.md?p=22) law, the [Director](/usc/12/4502.md?p=9) may, if continued service or [participation](/usc/12/2206a.md?p=a-1) by such party may pose a threat to the [regulated entity](/usc/12/4502.md?p=20) or impair public confidence in the [regulated entity](/usc/12/4502.md?p=20), by written notice served upon such party, suspend such party from [office](/usc/12/2279bb.md?p=4) or prohibit such party from further [participation](/usc/12/2206a.md?p=a-1) in any manner in the conduct of the affairs of any [regulated entity](/usc/12/4502.md?p=20).
    - (B) **Provisions applicable to notice—**
      - (i) **Copy—** A copy of any notice under [subparagraph (A)](#h-1-A) shall be served upon the relevant [regulated entity](/usc/12/4502.md?p=20).
      - (ii) **Effective period—** A suspension or prohibition under [subparagraph (A)](#h-1-A) shall remain in effect until the information, indictment, or complaint referred to in [subparagraph (A)](#h-1-A) is finally disposed of, or until terminated by the [Director](/usc/12/4502.md?p=9).
  - (2) **Removal or prohibition—**
    - (A) **In general—** If a judgment of conviction or an agreement to enter a pretrial diversion or other similar program is entered against an [entity-affiliated party](/usc/12/4502.md?p=11) in connection with a crime described in [paragraph (1)(A)](#h-1-A), at such time as such judgment is not subject to further appellate review, the [Director](/usc/12/4502.md?p=9) may, if continued service or [participation](/usc/12/2206a.md?p=a-1) by such party may pose a threat to the [regulated entity](/usc/12/4502.md?p=20) or impair public confidence in the [regulated entity](/usc/12/4502.md?p=20), issue and serve upon such party an order removing such party from [office](/usc/12/2279bb.md?p=4) or prohibiting such party from further [participation](/usc/12/2206a.md?p=a-1) in any manner in the conduct of the affairs of the [regulated entity](/usc/12/4502.md?p=20) without the prior written consent of the [Director](/usc/12/4502.md?p=9).
    - (B) **Provisions applicable to order—**
      - (i) **Copy—** A copy of any order under [subparagraph (A)](#h-2-A) shall be served upon the relevant [regulated entity](/usc/12/4502.md?p=20), at which time the [entity-affiliated party](/usc/12/4502.md?p=11) who is subject to the order (if a [director](/usc/12/4502.md?p=9) or an officer) shall cease to be a [director](/usc/12/4502.md?p=9) or officer of such [regulated entity](/usc/12/4502.md?p=20).
      - (ii) **Effect of acquittal—** A finding of not guilty or other disposition of the charge shall not preclude the [Director](/usc/12/4502.md?p=9) from instituting proceedings after such finding or disposition to remove a party from [office](/usc/12/2279bb.md?p=4) or to prohibit further [participation](/usc/12/2206a.md?p=a-1) in the affairs of a [regulated entity](/usc/12/4502.md?p=20) pursuant to subsection [(a)](#a) or [(b)](#b).
      - (iii) **Effective period—** Unless terminated by the [Director](/usc/12/4502.md?p=9), any notice of suspension or order of removal issued under this subsection shall remain effective and outstanding until the completion of any hearing or appeal authorized under [paragraph (4)](#h-4).
  - (3) **Authority of remaining board members—**
    - (A) **In general—** If at any time, because of the suspension of 1 or more [directors](/usc/12/4502.md?p=9) pursuant to this section, there shall be on the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/4502.md?p=9) of a [regulated entity](/usc/12/4502.md?p=20) less than a quorum of [directors](/usc/12/4502.md?p=9) not so suspended, all powers and functions vested in or exercisable by such [board](/usc/12/221a.md?p=a) shall vest in and be exercisable by the [director](/usc/12/4502.md?p=9) or [directors](/usc/12/4502.md?p=9) on the [board](/usc/12/221a.md?p=a) not so suspended, until such time as there shall be a quorum of the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/4502.md?p=9).
    - (B) **Appointment of temporary directors—** If all of the [directors](/usc/12/4502.md?p=9) of a [regulated entity](/usc/12/4502.md?p=20) are suspended pursuant to this section, the [Director](/usc/12/4502.md?p=9) shall appoint [persons](/usc/12/5481.md?p=19) to serve temporarily as [directors](/usc/12/4502.md?p=9) pending the termination of such suspensions, or until such time as those who have been suspended cease to be [directors](/usc/12/4502.md?p=9) of the [regulated entity](/usc/12/4502.md?p=20) and their respective successors take [office](/usc/12/2279bb.md?p=4).
  - (4) **Hearing regarding continued participation—**
    - (A) **In general—** Not later than 30 days after the date of service of any notice of suspension or order of removal issued pursuant to paragraph [(1)](#h-1) or [(2)](#h-2), the [entity-affiliated party](/usc/12/4502.md?p=11) may request in writing an opportunity to appear before the [Director](/usc/12/4502.md?p=9) to show that the continued service or [participation](/usc/12/2206a.md?p=a-1) in the conduct of the affairs of the [regulated entity](/usc/12/4502.md?p=20) by such party does not, or is not likely to, pose a threat to the interests of the [regulated entity](/usc/12/4502.md?p=20), or threaten to impair public confidence in the [regulated entity](/usc/12/4502.md?p=20).
    - (B) **Timing and form of hearing—** Upon receipt of a request for a hearing under [subparagraph (A)](#h-4-A), the [Director](/usc/12/4502.md?p=9) shall fix a time (not later than 30 days after the date of receipt of such request, unless extended at the request of such party) and place at which the [entity-affiliated party](/usc/12/4502.md?p=11) may appear, personally or through counsel, before the [Director](/usc/12/4502.md?p=9) or 1 or more designated employees of the [Director](/usc/12/4502.md?p=9) to submit written materials (or, at the discretion of the [Director](/usc/12/4502.md?p=9), oral testimony) and oral argument.
    - (C) **Determination—** Not later than 60 days after the date of a hearing under [subparagraph (B)](#h-4-B), the [Director](/usc/12/4502.md?p=9) shall notify the [entity-affiliated party](/usc/12/4502.md?p=11) whether the suspension or prohibition from [participation](/usc/12/2206a.md?p=a-1) in any manner in the conduct of the affairs of the [regulated entity](/usc/12/4502.md?p=20) will be continued, terminated, or otherwise modified, or whether the order removing such party from [office](/usc/12/2279bb.md?p=4) or prohibiting such party from further [participation](/usc/12/2206a.md?p=a-1) in any manner in the conduct of the affairs of the [regulated entity](/usc/12/4502.md?p=20) will be rescinded or otherwise modified. Such notification shall contain a statement of the basis for any adverse decision of the [Director](/usc/12/4502.md?p=9).
  - (5) **Rules—** The [Director](/usc/12/4502.md?p=9) is authorized to prescribe such rules as may be necessary to carry out this subsection.

# §4636b. Criminal penalty


Whoever, being subject to an order in effect under [section 4636a of this title](/usc/12/4636a.md), without the prior written approval of the [Director](/usc/12/4502.md?p=9), knowingly [participates](/usc/12/2206a.md?p=a-1), directly or indirectly, in any manner ([including](/usc/12/25b.md?p=a-3) by engaging in an activity specifically prohibited in such an order) in the conduct of the affairs of any [regulated entity](/usc/12/4502.md?p=20) shall, notwithstanding [section 3571 of title 18](/usc/18/3571.md), be fined not more than $1,000,000, imprisoned for not more than 5 years, or both.


# §4637. Notice after separation from service


The resignation, termination of employment or [participation](/usc/12/2206a.md?p=a-1), or separation of an [entity-affiliated party](/usc/12/4502.md?p=11) shall not affect the jurisdiction and authority of the [Director](/usc/12/4502.md?p=9) to issue any notice and proceed under this subchapter against any such [entity-affiliated party](/usc/12/4502.md?p=11), if such notice is served before the end of the 6-year period beginning on the date such [entity-affiliated party](/usc/12/4502.md?p=11) ceases to be associated with the [regulated entity](/usc/12/4502.md?p=20).


# §4638. Private rights of action


This chapter shall not create any private right of action on behalf of [any person](/usc/12/1715z–4a.md?p=a-2) against a [regulated entity](/usc/12/4502.md?p=20), or any [director](/usc/12/4502.md?p=9) or [executive officer](/usc/12/4502.md?p=12) of a [regulated entity](/usc/12/4502.md?p=20), or impair any existing private right of action under other applicable law.


# §4639. Public disclosure of final orders and agreements

- (a) **In general—** The [Director](/usc/12/4502.md?p=9) shall make available to the public—
  - (1) any written agreement or other written statement for which a [violation](/usc/12/4502.md?p=25) may be redressed by the [Director](/usc/12/4502.md?p=9) or any modification to or termination thereof, unless the [Director](/usc/12/4502.md?p=9), in the [Director](/usc/12/4502.md?p=9)’s discretion, determines that public disclosure would be contrary to the public interest;
  - (2) any order that is issued with respect to any administrative enforcement proceeding initiated by the [Director](/usc/12/4502.md?p=9) under this subchapter and that has become final in accordance with sections [4633](/usc/12/4633.md) and [4634](/usc/12/4634.md) of this title; and
  - (3) any modification to or termination of any final order made public pursuant to this subsection.
- (b) **Hearings—** All hearings on the record with respect to any notice of charges issued by the [Director](/usc/12/4502.md?p=9) shall be open to the public, unless the [Director](/usc/12/4502.md?p=9), in the [Director](/usc/12/4502.md?p=9)’s discretion, determines that holding an open hearing would be contrary to the public interest.
- (c) **Delay of public disclosure under exceptional circumstances—** If the [Director](/usc/12/4502.md?p=9) makes a determination in writing that the public disclosure of any final order pursuant to [subsection (a)](#a) would seriously threaten the financial health or security of the [regulated entity](/usc/12/4502.md?p=20), the [Director](/usc/12/4502.md?p=9) may delay the public disclosure of such order for a reasonable time.
- (d) **Documents filed under seal in public enforcement hearings—** The [Director](/usc/12/4502.md?p=9) may file any document or part thereof under seal in any hearing commenced by the [Director](/usc/12/4502.md?p=9) if the [Director](/usc/12/4502.md?p=9) determines in writing that disclosure thereof would be contrary to the public interest.
- (e) **Retention of documents—** The [Director](/usc/12/4502.md?p=9) shall keep and maintain a record, for not less than 6 years, of all documents described in [subsection (a)](#a) and all enforcement agreements and other supervisory actions and supporting documents issued with respect to or in connection with any enforcement proceeding initiated by the [Director](/usc/12/4502.md?p=9) under this subchapter or any other law.
- (f) **Disclosures to Congress—** This section may not be construed to authorize the withholding, or to prohibit the disclosure, of any information to the Congress or any committee or subcommittee thereof.

# §4640. Notice of service


Any service required or authorized to be made by the [Director](/usc/12/4502.md?p=9) under this subchapter may be made by registered mail, or in such other manner reasonably calculated to give actual notice as the [Director](/usc/12/4502.md?p=9) may by regulation or otherwise provide.


# §4641. Subpoena authority

- (a) **In general—** In the course of or in connection with any proceeding, examination, or investigation under this chapter, the [Director](/usc/12/4502.md?p=9) or any designated representative thereof, [including](/usc/12/25b.md?p=a-3) [any person](/usc/12/1715z–4a.md?p=a-2) designated to conduct any hearing under this subchapter shall have the authority—
  - (1) to administer oaths and affirmations;
  - (2) to take and preserve testimony under oath;
  - (3) to issue subpoenas and subpoenas duces tecum; and
  - (4) to revoke, quash, or modify subpoenas and subpoenas duces tecum.
- (b) **Witnesses and documents—** The attendance of witnesses and the production of documents provided for in this section may be required from any place in any [State](/usc/12/4502.md?p=22) 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.
- (c) **Enforcement—**
  - (1) **In general—** The [Director](/usc/12/4502.md?p=9), or any party to proceedings under this subchapter, may apply to the United States [District](/usc/12/221a.md?p=a) Court for the District of Columbia, or the United States [district](/usc/12/221a.md?p=a) court for the judicial [district](/usc/12/221a.md?p=a) of the United States in any territory in which such proceeding is being conducted, or where the witness resides or carries on business, for enforcement of any subpoena or subpoena duces tecum issued pursuant to this section.
  - (2) **Power of court—** The courts described under [paragraph (1)](#c-1) shall have the jurisdiction and power to order and require compliance with any subpoena issued under [paragraph (1)](#c-1).
- (d) **Fees and expenses—** Witnesses subpoenaed under this section shall be paid the same fees and mileage that are paid witnesses in the [district](/usc/12/221a.md?p=a) courts of the United States. Any court having jurisdiction of any proceeding instituted under this section by an [regulated entity](/usc/12/4502.md?p=20) [enterprise](/usc/12/4502.md?p=10)-affiliated party[^1] may allow to any such party such reasonable expenses and attorneys fees as the court deems just and proper. Such expenses and fees shall be paid by the [regulated entity](/usc/12/4502.md?p=20) or from its assets.
- (e) **Penalties—** A [person](/usc/12/5481.md?p=19) shall be guilty of a misdemeanor, and upon conviction, shall be subject to a fine of not more than $1,000 or to imprisonment for a term of not more than 1 year, or both, if that [person](/usc/12/5481.md?p=19) willfully fails or refuses, in disobedience of a subpoena issued under [subsection (c)](#c), to—
  - (1) attend court;
  - (2) testify in court;
  - (3) answer any lawful inquiry; or
  - (4) produce books, papers, correspondence, contracts, agreements, or such other records as requested in the subpoena.