12 U.S.C. § 4618: Notice of classification and…

Summary

The Director must give the regulated entity written notice before taking certain actions. The notice must explain why the action is proposed and show the information used. This rule covers three kinds of actions: changing a company’s capital classification under section 4614, discretionary supervisory actions under section 4615, and discretionary supervisory actions under section 4616 except appointing a conservator under 4616(b)(6). Notices about classification and supervisory actions can be combined into one. After notice, the company has 30 days to send any information it wants considered. The Director may hold an informal hearing. The Director can extend the period by up to 30 more days for good cause or shorten it if needed or if the company agrees. If the company does not respond, it gives up the chance to comment. When the response period ends or when the Director gets the company’s information, the Director must decide and send a written decision and reasons to the company and to the House and Senate banking committees named in the law. The action takes effect when the company receives that decision, unless the decision says otherwise.

Title 12, §4618

Banks and Banking, Source: USLM XML via OLRC

(a)Notice

Before taking any action referred to in subsection (b), the Director shall provide to the regulated entity written notice of the proposed action, which states the reasons for the proposed action and the information on which the proposed action is based.

(b)Applicability

The requirements of subsection (a) shall apply to the following actions:

(1)Classification or reclassification of a regulated entity within a particular capital classification under section 4614 of this title.

(2)Any discretionary supervisory action pursuant to section 4615 of this title.

(3)Any discretionary supervisory action pursuant to section 4616 of this title except a decision to appoint a conservator under section 4616(b)(6) of this title.

Notice of classification under paragraph (1) and notice of supervisory actions under paragraph (2) or (3) may be provided together in a single notice under subsection (a).

(c)Response period

(1)In general

During the 30-day period beginning on the date that a regulated entity is provided notice under subsection (a) of a proposed action, the regulated entity may submit to the Director any information relevant to the action that the regulated entity considers appropriate for consideration by the Director in determining whether to take such action. The Director may, at the discretion of the Director, hold an informal administrative hearing to receive and discuss such information and the proposed determination.

(2)Extended period

The Director may extend the period under paragraph (1) for good cause for not more than 30 additional days.

(3)Shortened period

The Director may shorten the period under paragraph (1) if the Director determines that the condition of the regulated entity so requires or the regulated entity consents.

(4)Failure to respond

The failure of a regulated entity to provide information during the response period under this subsection (as extended or shortened) shall waive any right of the regulated entity to comment on the proposed action of the Director.

(d)Consideration of information and determination

After the expiration of the response period under subsection (c) or upon receipt of information provided during such period by the regulated entity, whichever occurs earlier, the Director shall determine whether to take the action proposed, taking into consideration any relevant information submitted by the regulated entity during the response period. The Director shall provide written notice of a determination to take action and the reasons for such determination to the regulated entity, the Committee on Banking, Finance and Urban Affairs of the House of Representatives, and the Committee on Banking, Housing, and Urban Affairs of the Senate. Such notice shall respond to any information submitted during the response period.

(e)Effective date of actions

An action referred to in subsection (b) shall take effect upon receipt by the regulated entity of notice of the determination of the Director under subsection (d), unless otherwise provided in such notice.

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 4616(b)(6) of this title, referred to in subsec. (b)(3), was repealed and a new par. (6) added by Pub. L. 110–289, div. A, title I, § 1144(5)(C), (D), July 30, 2008, 122 Stat. 2733. The new par. (6) does not relate to appointment of a conservator.

Amendments

2008—Pub. L. 110–289 substituted “a regulated entity” for “an enterprise” and “the regulated entity” for “the enterprise” wherever appearing.

Statutory Notes and Related Subsidiaries

Change of Name

Committee on Banking, Finance and Urban Affairs of House of Representatives treated as referring to Committee on Banking and Financial Services of House of Representatives by section 1(a) of Pub. L. 104–14, set out as a note preceding section 21 of Title 2, The Congress. Committee on Banking and Financial Services of House of Representatives abolished and replaced by Committee on Financial Services of House of Representatives, and jurisdiction over matters relating to securities and exchanges and insurance generally transferred from Committee on Energy and Commerce of House of Representatives by House Resolution No. 5, One Hundred Seventh Congress, Jan. 3, 2001.

§4618 Notice of Classification and Enforcement Action