---
kind: "section"
citation: "12 U.S.C. § 4636a"
title: "12"
title_heading: "Banks and Banking"
number: "4636a"
heading: "Removal and prohibition authority"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/4636a"
units:
  - "Chapter 46 — Government Sponsored Enterprises"
  - "Subchapter III — Enforcement Provisions"
---

# §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, or prohibit any further participation 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;
        - (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, or prohibit such party from further participation 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/12/5481.md?p=19) subject to an order issued under this section shall not—
  - (1) participate 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/12/5481.md?p=19) who, pursuant to an order issued under this section, has been removed or suspended from office 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 in, or participate 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 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/12/5481.md?p=19) 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, 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 or prohibited from participation 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 Court for the District of Columbia, or the United States district court for the judicial district 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 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 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 or prohibit such party from further participation 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 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 or prohibiting such party from further participation 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 or to prohibit further participation 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/12/4502.md?p=4) 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/12/4502.md?p=4) 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/12/4502.md?p=4) not so suspended, until such time as there shall be a quorum of the [board](/usc/12/4502.md?p=4) 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.
  - (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 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 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 or prohibiting such party from further participation 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.

## Source credit

(Pub. L. 102–550, title XIII, § 1377, as added Pub. L. 110–289, div. A, title I, § 1153(a)(2), July 30, 2008, 122 Stat. 2770.)

## Notes

### Editorial Notes

### Prior Provisions

A prior section 1377 of Pub. L. 102–550 was renumbered section 1379 and is classified to section 4637 of this title.