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Each depositor insured to at least $250,000 per insured bank

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2000 - Rules and Regulations



Subpart E—Rules and Procedures Applicable to Proceedings Relating to Assessment of Civil Penalties for Willful Violations of the Change in Bank Control Act

§ 308.115  Scope.

The rules and procedures of this subpart, subpart B of the Local Rules and the Uniform Rules shall apply to proceedings to assess civil penalties against any person for willful violation of the Change in Bank Control Act of 1978 (12 U.S.C. 1817(j)), or any regulation or order issued pursuant thereto, in connection with the affairs of an insured nonmember bank.

[Codified to 12 C.F.R. § 308.115]

§ 308.116  Assessment of penalties.

(a)  In general.  The civil money penalty shall be assessed upon the service of a Notice of Assessment which shall become final and unappealable unless the respondent requests a hearing pursuant to § 308.19(c)(2).

(b)  Amount.  (1)  Any person who violates any provision of the Change in Bank Control Act or any rule, regulation, or order issued by the FDIC pursuant thereto, shall forfeit and pay a civil money penalty of not more than $5,000 for each day the violation continues.

(2)  Any person who violates any provision of the Change in Bank Control Act or any rule, regulation, or order issued by the FDIC pursuant thereto; or recklessly engages in any unsafe or unsound practice in conducting the affairs of a depository institution; or breaches any fiduciary duty; which violation, practice or breach is part of a pattern of misconduct; or causes or is likely to cause more than a minimal loss to such institution; or results in pecuniary gain or other benefit to such person, shall forfeit and pay a civil money penalty of not more than $25,000 for each day such violation, practice or breach continues.

(3)  Any person who knowingly violates any provision of the Change in Bank Control Act or any rule, regulation, or order issued by the FDIC pursuant thereto; or engages in any unsafe or unsound practice in conducting the affairs of a depository institution; or breaches any fiduciary duty; and knowingly or recklessly causes a substantial loss to such institution or a substantial pecuniary gain or other benefit to such person by reason of such violation, practice or breach, shall forfeit and pay a civil money penalty not to exceed:

(i)  In the case of a person other than a depository institution--$1,000,000 per day for each day the violation, practice or breach continues; or

(ii)  In the case of a depository institution--an amount not to exceed the lesser of $1,000,000 or one percent of the total assets of such institution for each day the violation, practice or breach continues.

(4)  Adjustment of civil money penalties by the rate of inflation pursuant to section 31001(s) of the Debt Collection Improvement Act. After December 31, 2012:

(i)  Any person who engages in a violation as set forth in paragraph (b)(1) of this section shall forfeit and pay a civil money penalty of not more than $7,500 for each day the violation continues.

(ii)  Any person who engages in a violation, unsafe or unsound practice or breach of fiduciary duty, as set forth in in paragraph (b)(2) of this section, shall forfeit and pay a civil money penalty of not more than $37,500 for each day such violation, practice or breach continues.

(iii)  Any person who knowingly engages in a violation, unsafe or unsound practice or breach of fiduciary duty, as set forth in in paragraph (b)(3) of this section, shall forfeit and pay a civil money penalty not to exceed:

(A)  In the case of a person other than a depository institution--$1,425,000 per day for each day the violation, practice or breach continues; or

(B)  In the case of a depositary institution--an amount not to exceed the lesser of $1,425,000 or one percent of the total assets of such institution for each day the violation, practice or breach continues.

(c)  Mitigating factors.  In assessing the amount of the penalty, the Board of Directors or its designee shall consider the gravity of the violation, the history of previous violations, respondent's financial resources, good faith, and any other matters as justice may require.

(d)  Failure to answer.  Failure of a respondent to file an answer required by this section within the time provided constitutes a waiver of his or her right to appear and contest the allegations in the notice of disapproval. If no timely answer is filed, Enforcement Counsel may file a motion for entry of an order of default. Upon a finding that no good cause has been shown for the failure to file a timely answer, the administrative law judge shall file a recommended decision containing the findings and relief sought in the notice. A final order issued by the Board of Directors based upon a respondent's failure to answer is deemed to be an order issued upon consent.

[Codified to 12 C.F.R. § 308.116]

[Section 308.116 amended at 61 Fed. Reg. 57990, November 12, 1996; 65 Fed. Reg. 64887, October 31, 2000; 72 Fed. Reg. 61305, October 18, 2004, effective, December 31, 2004; 73 Fed. Reg. 73157, December 2, 2008, effective December 31, 2008; 77 Fed. Reg. 74577, December 17, 2012, effective December 31, 2012]

§ 308.117  Effective date of, and payment under, an order to pay.

If the respondent both requests a hearing and serves an answer, civil penalties assessed pursuant to this subpart are due and payable 60 days after an order to pay, issued after the hearing or upon default, is served upon the respondent, unless the order provides for a different period of payment. Civil penalties assessed pursuant to an order to pay issued upon consent are due and payable within the time specified therein.

[Codified to 12 C.F.R. § 308.117]

§ 308.118  Collection of penalties.

The FDIC may collect any civil penalty assessed pursuant to this subpart by agreement with the respondent, or the FDIC may bring an action against the respondent to recover the penalty amount in the appropriate United States district court. All penalties collected under this section shall be paid over to the Treasury of the United States.

[Codified to 12 C.F.R. § 308.118]


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