12 U.S.C. § 4631
If, in the opinion of the Director, a regulated entity or any entity-affiliated party is engaging or has engaged, or the Director has reasonable cause to believe that the regulated entity or any entity-affiliated party is about to engage, in an unsafe or unsound practice in conducting the business of the regulated entity or the Office of Finance, or is violating or has violated, or the Director has reasonable cause to believe is about to violate, a law, rule, regulation, or order, or any condition imposed in writing by the Director in connection with the granting of any application or other request by the regulated entity or the Office of Finance or any written agreement entered into with the Director, the Director may issue and serve upon the regulated entity or entity-affiliated party a notice of charges in respect thereof.
The Director 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 or 4567 of this title, with subsection (m) or (n) of section 1723a of this title, with subsection (e) or (f) of section 1456 of this title, or with paragraph (5) of section 1430(j) of this title.
If a regulated entity receives, in its most recent report of examination, a less-than-satisfactory rating for asset quality, management, earnings, or liquidity, the Director may (if the deficiency is not corrected) deem the regulated entity to be engaging in an unsafe or unsound practice for purposes of subsection (a).
Each notice of charges under this section shall contain a statement of the facts constituting the alleged practice or violation 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 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.
If the Director finds on the record made at such hearing that any practice or violation specified in the notice of charges has been established (or the regulated entity or entity-affiliated party consents pursuant to section 4633(a)(4) of this title), the Director may issue and serve upon the regulated entity, executive officer, director, or entity-affiliated party an order requiring such party to cease and desist from any such practice or violation and to take affirmative action to correct or remedy the conditions resulting from any such practice or violation.
The authority under this section and section 4632 of this title to issue any order requiring a regulated entity, executive officer, director, or entity-affiliated party to take affirmative action to correct or remedy any condition resulting from any practice or violation with respect to which such order is issued includes the authority to require a regulated entity or entity-affiliated party-
The authority to issue an order under this section or section 4632 of this title includes the authority to place limitations on the activities or functions of the regulated entity or entity-affiliated party or any executive officer or director of the regulated entity or entity-affiliated party.
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, finance facility,,2 executive officer, director, or entity-affiliated party 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 or otherwise, as provided in this subchapter.
1 So in original. Probably should be "to make".
2 So in original.
12 U.S.C. § 4631
EDITORIAL NOTES
REFERENCES IN TEXTThis chapter, referred to in subsec. (a)(2), was in the original "this title", meaning title XIII of Pub. L. 102-550, 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.
AMENDMENTS2008-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".
- Director
- The term "Director" means the Director of the Bureau.
- Office of Finance
- The term "Office of Finance" means the Office of Finance of the Federal Home Loan Bank System (or any successor thereto).
- enterprise
- The term "enterprise" means-(A) the Federal National Mortgage Association and any affiliate thereof; and(B) the Federal Home Loan Mortgage Corporation and any affiliate thereof.
- entity-affiliated party
- The term "entity-affiliated party" means-(A) any director, officer, employee, or controlling stockholder of, or agent for, a regulated entity;(B) any shareholder, affiliate, consultant, or joint venture partner of a regulated entity, and any other person, as determined by the Director (by regulation or on a case-by-case basis) that participates in the conduct of the affairs of a regulated entity, provided that a member of a Federal Home Loan Bank shall not be deemed to have participated in the affairs of that Bank solely by virtue of being a shareholder of, and obtaining advances from, that Bank;(C) any independent contractor for a regulated entity (including any attorney, appraiser, or accountant), if-(i) the independent contractor knowingly or recklessly participates in-(I) any violation of any law or regulation;(II) any breach of fiduciary duty; or(III) any unsafe or unsound practice; and(ii) such violation, breach, or practice caused, or is likely to cause, more than a minimal financial loss to, or a significant adverse effect on, the regulated entity;(D) any not-for-profit corporation that receives its principal funding, on an ongoing basis, from any regulated entity; and(E) the Office of Finance.
- executive officer
- The term "executive officer" means, with respect to an enterprise, the chairman of the board of directors, chief executive officer, chief financial officer, president, vice chairman, any executive vice president, and any senior vice president in charge of a principal business unit, division, or function.
- person
- The term "person" means an individual, partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity.
- regulated entity
- The term "regulated entity" means-(A) the Federal National Mortgage Association and any affiliate thereof;(B) the Federal Home Loan Mortgage Corporation and any affiliate thereof; and(C) any Federal Home Loan Bank.
- violation
- The term "violation" includes any action (alone or in combination with another or others) for or toward causing, bringing about, participating in, counseling, or aiding or abetting a violation.