12 U.S.C. § 4514: Authority to require reports…

Summary

The Director can require a regulated company to send regular or special reports about its finances, condition, management, activities, or operations. These reports can include financial statements showing current fair value. The Director must give the company reasonable advance notice of what information is needed and when it must be filed. The Director cannot demand information the company cannot reasonably obtain. Each report must include a signed statement by an officer (for example, the president, vice president, treasurer, or another officer chosen by the board) saying the report is true to the best of their knowledge. The Director can also require a report after a company declares a capital distribution and before the distribution is made. It is a violation to miss required reporting deadlines or to provide false or misleading reports. Penalties depend on the circumstances: up to $2,000 per day if the company shows the error was unintentional or the report was only slightly late; up to $20,000 per day for other violations; and up to $1,000,000 per day if the company acted knowingly or with reckless disregard. The Director will assess and collect penalties using the usual penalty procedures, and a company can request an agency hearing within 20 days after a penalty notice. The normal hearing rules in the law apply.

Title 12, §4514

Banks and Banking, Source: USLM XML via OLRC

(a)Regular and special reports

(1)Regular reports

The Director may require, by general or specific orders, a regulated entity to submit regular reports, including financial statements determined on a fair value basis, on the condition (including financial condition), management, activities, or operations of the regulated entity, as the Director considers appropriate (in addition to the annual and quarterly reports required under section 1723a(k) of this title and section 1456(c) of this title).

(2)Special reports

The Director may also require, by general or specific orders, a regulated entity to submit special reports on any of the topics specified in paragraph (1) or any other relevant topics, if, in the judgment of the Director, such reports are necessary to carry out the purposes of this chapter.

(3)Limitation

The Director may not require the inclusion, in any report pursuant to paragraph (1) or (2), of any information that is not reasonably obtainable by the regulated entity.

(4)Notice and declaration

The Director shall notify the regulated entity, a reasonable period in advance of the date for submission of any report under this subsection, of any specific information to be contained in the report and the date for the submission of the report. Each report under this subsection shall contain a declaration by the president, vice president, treasurer, or any other officer designated by the board of directors of the regulated entity to make such declaration, that the report is true and correct to the best of such officer’s knowledge and belief.

(b)Capital distributions

The Director may require a regulated entity to submit a report to the Director after the declaration of any capital distribution by the regulated entity and before making the capital distribution. The report shall be made in such form and under such circumstances and shall contain such information as the Director shall require.

(c)Penalties for failure to make reports

(1)Violations

It shall be a violation of this section for any regulated entity—

(A)to fail to make, transmit, or publish any report or obtain any information required by the Director under this section, section 1723a(k) of this title, section 1456(c) of this title, or section 1440 of this title, within the period of time specified in such provision of law or otherwise by the Director; or

(B)to submit or publish any false or misleading report or information under this section.

(2)Penalties

(A)First tier

(i)In general

A violation described in paragraph (1) shall be subject to a penalty of not more than $2,000 for each day during which such violation continues, in any case in which—

(I)the subject regulated entity maintains procedures reasonably adapted to avoid any inadvertent error and the violation was unintentional and a result of such an error; or

(II)the violation was an inadvertent transmittal or publication of any report which was minimally late.

(ii)Burden of proof

For purposes of this subparagraph, the regulated entity shall have the burden of proving that the error was inadvertent or that a report was inadvertently transmitted or published late.

(B)Second tier

A violation described in paragraph (1) shall be subject to a penalty of not more than $20,000 for each day during which such violation continues or such false or misleading information is not corrected, in any case that is not addressed in subparagraph (A) or (C).

(C)Third tier

A violation described in paragraph (1) shall be subject to a penalty of not more than $1,000,000 per day for each day during which such violation continues or such false or misleading information is not corrected, in any case in which the subject regulated entity committed such violation knowingly or with reckless disregard for the accuracy of any such information or report.

(3)Assessments

Any penalty imposed under this subsection shall be in lieu of a penalty under section 4636 of this title, but shall be assessed and collected by the Director in the manner provided in section 4636 of this title for penalties imposed under that section, and any such assessment (including the determination of the amount of the penalty) shall be otherwise subject to the provisions of section 4636 of this title.

(4)Hearing

A regulated entity against which a penalty is assessed under this section shall be afforded an agency hearing if the regulated entity submits a request for a hearing not later than 20 days after the date of the issuance of the notice of assessment. section 4634 of this title shall apply to any such proceedings.

Notes & Related Subsidiaries

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—Pub. L. 110–289, § 1104(a)(1), substituted “regulated entities” for “enterprises” in section catchline. Subsec. (a). Pub. L. 110–289, § 1104(a)(4)(A), substituted “Regular and special reports” for “Special reports and reports of financial condition” in subsec. heading, “Regular reports” for “Financial condition” in par. (1) heading, and “The Director may require, by general or specific orders, a regulated entity to submit regular reports, including financial statements determined on a fair value basis, on the condition (including financial condition), management, activities, or operations of the regulated entity, as the Director considers appropriate” for “The Director may require an enterprise to submit reports of financial condition and operations” in par. (1). Subsec. (a)(2). Pub. L. 110–289, § 1104(a)(4)(B), inserted “, by general or specific orders,” after “may also require” and substituted “on any of the topics specified in paragraph (1) or any other relevant topics, if” for “whenever”. Pub. L. 110–289, § 1104(a)(2), substituted “a regulated entity” for “an enterprise”. Subsec. (a)(3), (4). Pub. L. 110–289, § 1104(a)(3), which directed amendment of this section by substituting “the regulated entity” for “the enterprise”, was executed by making the substitution wherever appearing to reflect the probable intent of Congress. Subsec. (b). Pub. L. 110–289, § 1104(a)(3), which directed amendment of this section by substituting “the regulated entity” for “the enterprise”, was executed by making the substitution wherever appearing to reflect the probable intent of Congress. Pub. L. 110–289, § 1104(a)(2), substituted “a regulated entity” for “an enterprise”. Subsec. (c). Pub. L. 110–289, § 1104(a)(5), added subsec. (c).

§4514 Authority to Require Reports by Regulated Entities