---
kind: "section"
citation: "12 U.S.C. § 4631"
title: "12"
title_heading: "Banks and Banking"
number: "4631"
heading: "Cease-and-desist proceedings"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/4631"
units:
  - "Chapter 46 — Government Sponsored Enterprises"
  - "Subchapter III — Enforcement Provisions"
---

# §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 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 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.

## Footnotes

[^1]: So in original. Probably should be “to make”.
[^2]: So in original.

## Source credit

(Pub. L. 102–550, title XIII, § 1371, Oct. 28, 1992, 106 Stat. 3986; Pub. L. 110–289, div. A, title I, § 1151, July 30, 2008, 122 Stat. 2767.)

## Notes

### Editorial Notes

### References in Text

This chapter, referred to in subsec. (a)(2), was in the original “this title”, meaning title XIII of Pub. L. 102–550, Oct. 28, 1992, 106 Stat. 3941, which is classified principally to this chapter. For complete classification of title XIII to the Code, see Short Title note set out under section 4501 of this title and Tables.

### Amendments

2008—Subsecs. (a), (b). Pub. L. 110–289, § 1151(1), added subsecs. (a) and (b) and struck out former subsecs. (a) and (b) which related to grounds for issuance against adequately capitalized enterprises and grounds for issuance against undercapitalized, significantly undercapitalized, and critically undercapitalized enterprises, respectively.

Subsec. (c)(1). Pub. L. 110–289, § 1151(2)(A), (3)(C), substituted “practice” for “conduct” in two places and inserted “, 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” before period at end.

Subsec. (c)(2). Pub. L. 110–289, § 1151(2)(B), (3)(A), (C), inserted “or entity-affiliated party” before “consents” and substituted “director, or entity-affiliated party” for “or director”, “the regulated entity” for “the enterprise” in two places, and “practice” for “conduct” wherever appearing.

Subsec. (d). Pub. L. 110–289, § 1151(3)(B), (C), (4)(A), in introductory provisions, substituted “a regulated entity” for “an enterprise”, “director, or entity-affiliated party” for “or director”, and “practice” for “conduct”, and inserted “to require a regulated entity or entity-affiliated party” after “includes the authority”.

Subsec. (d)(1). Pub. L. 110–289, § 1151(4)(B)(i), (ii), in introductory provisions, struck out “to require an executive officer or a director to” before “make restitution” and substituted “loss, if” for “loss to the enterprise to the extent that such person”.

Subsec. (d)(1)(A). Pub. L. 110–289, § 1151(3)(C), (4)(B)(iii), inserted “such entity or party or finance facility” before “was unjustly” and substituted “practice” for “conduct”.

Subsec. (d)(1)(B). Pub. L. 110–289, § 1151(4)(B)(iv), added subpar. (B) and struck out former subpar. (B) which read as follows: “engaged in conduct or a violation that would subject such person to a civil penalty pursuant to section 4636(b)(3) of this title;”.

Subsec. (d)(2). Pub. L. 110–289, § 1151(3)(B), substituted “a regulated entity” for “an enterprise”.

Subsec. (d)(3). Pub. L. 110–289, § 1151(3)(A), substituted “the regulated entity” for “the enterprise”.

Subsec. (d)(4). Pub. L. 110–289, § 1151(3)(A), (4)(C), substituted “the regulated entity” for “the enterprise” and inserted “loan or” before “asset”.

Subsec. (d)(5) to (7). Pub. L. 110–289, § 1151(3)(A), substituted “the regulated entity” for “the enterprise”.

Subsec. (e). Pub. L. 110–289, § 1151(3)(A), (5), substituted “the regulated entity” for “the enterprise” in two places and inserted “or entity-affiliated party” before “or any executive” and before period at end.

Subsec. (f). Pub. L. 110–289, § 1151(6), substituted “regulated entity, finance facility,” for “enterprise” and “director, or entity-affiliated party” for “or director”.