§ 19-4-12 - Order to cease unlawful or unsafe practices – Impairment of capital – Appeal.
SECTION 19-4-12
§ 19-4-12 Order to cease unlawful orunsafe practices – Impairment of capital – Appeal. – (a) Whenever it appears to the director or the director's designee that aregulated institution has violated its agreement to form, or any law orregulation, or is conducting its business in an unauthorized or unsafe manner,or the regulated institution has been notified by its federal deposit insurerof its intent to terminate deposit insurance, the director or the director'sdesignee may exercise any or all of the following powers:
(1) Restrict the withdrawal of deposits when he or she findsthe restriction necessary for the protection of depositors;
(2) Order any person to cease violating any provision of thebanking laws of this state or any rule or regulation issued thereunder, orcease engaging in any unsafe or unsound or deceptive banking or credit unionpractices;
(3) Order that capital be restored, to the extent that thecapital of the financial institution or credit union has been impaired;
(4) Suspend or remove any director, committee member,officer, or employee who becomes ineligible to hold his or her position or who,after receipt of an order to cease under this chapter, violates the bankinglaws of this state or a rule, regulation, or order issued thereunder, or who isreckless or incompetent in the conduct of the financial institution's or creditunion's business. Each suspension or removal order shall specify the groundstherefor, and a copy of the order shall be sent to the financial institution orcredit union concerned.
(b) Any action taken pursuant to subsection (a) may be takenin the director's or the director's designee's discretion before or afteraffording the regulated institution and/or affected individuals an opportunityfor hearing. When an action is not preceded by an opportunity for hearing, suchan opportunity must be afforded to the regulated institution and/or affectedindividuals within a reasonable time after the action; provided further, that arequest for hearing subsequent to an action by the director or the director'sdesignee shall not act to stay the action of the director or the director'sdesignee pending the outcome of the hearing, although the director or thedirector's designee may, in his or her discretion, grant a stay.
(c) Whenever the regulated institution fails to comply withan order of the director or the director's designee, or file required reports,or fails to pay any final judgment recovered against it in any court of thisstate within sixty (60) days after the rendition of the order, or pay fees orforfeitures, or do any other act required under this title, the superintendentmay give notice to the board of bank incorporation and the regulatedinstitution of those failures and may request that the regulated institution'sright to do business be suspended. The board of bank incorporation shall hold ahearing within a reasonable time after issuance of the notice, at which timethe superintendent and the regulated institution shall have the opportunity topresent evidence as to whether the regulated institution's right to do businessshould or should not be suspended. After the hearing, if it appears to theboard of bank incorporation that the regulated institution is in an insolventcondition, or is violating its agreement to form or any law or regulation underthis title, or that it is conducting its business in an unsafe, unauthorized,deceptive, or dishonest manner, the board of bank incorporation may give noticeto the regulated institution that it is no longer authorized to do business.Any of these regulated institutions not in an insolvent condition may bereauthorized by the board of bank incorporation to resume its business uponcomplying with the terms and conditions set forth by the board of bankincorporation pursuant to the laws or regulations under this title. Anyregulated institution aggrieved by an order of the board of bank incorporationmay appeal that order to the superior court pursuant to chapter 35 of title 42.