§ 4631. Cease-and-desist proceedings

Footnotes

1. 1 So in original. Probably should be “to make”.
2. 2 So in original.

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1992

   Federal Housing Enterprises Financial Safety and Soundness Act of 1992

   Pub. L. 102–550 title XIII § 1371 · 106 Stat. 3672

   Enacted · 12 U.S.C. § 4631

   Pub. L. 102–550, title XIII, § 1371, Oct. 28, 1992, 106 Stat. 3986

   Source evidence

   Code source credit
   Pub. L. 102–550, title XIII, § 1371, Oct. 28, 1992, 106 Stat. 3986

   Enacted provision · exact public law section
   SEC. 1371. CEASE-AND-DESIST PROCEEDINGS. (a) Grounds for Issuance Against Adequately Capitalized Enterprises.— The Director may issue and serve a notice of charges under this section upon an enterprise that is classified (for purposes of subtitle B) as adequately capitalized or upon any executive officer or director of such an enterprise, if in the determination of the Director, the enterprise, executive officer, or director is engaging or has engaged, or the Director has reasonable cause to believe that the enterprise, executive officer, or director is about to engage, in— (1) any conduct that threatens to cause a significant depletion of the core capital of the enterprise; (2) any conduct or violation that may result in the issuance of an order described in subsection (d)(1); or (3) any conduct that violates— (A) any provision of this title, the Federal National Mortgage Association Charter Act, the Federal Home Loan Mortgage Corporation Act, or any order, rule, or regulation under any such title or Act, except that the Director may not enforce compliance with any housing goal established under subpart B of part 2 of subtitle A of this title, with section 1336 or 1337 of this title, or with subsection (m) or (n) of section 309 of the Federal National Mortgage Association Charter Act or subsection (e) or (0 of section 307 of the Federal Home Loan Mortgage Corporation Act; or (B) any written agreement entered into by the enterprise with the Director. (b) Grounds for Issuance Against Undercapitalized, Significantly Undercapitalized, and Critically Undercapitalized Enterprises.— The Director may issue and serve a notice of charges under this section upon an enterprise classified (for purposes of subtitle B) as undercapitalized, significantly undercapitalized, or critically undercapitalized, or any executive officer or director of any such enterprise, if in the determination of the Director the enterprise, executive officer, or director is engaging or has engaged, or the Director has reasonable cause to believe that the enterprise, executive officer, or director is about to engage, in— (1) any conduct likely to result in a material depletion of the core capital of the enterprise, or (2) any conduct or violation described in paragraph (2) or (3) of subsection (a), except that the Director may not enforce compliance with any housing goal established under subpart B of part 2 of subtitle A of this title, with section 1336 or 1337 of this title, or with subsection (m) or (n) of section 309 of the Federal National Mortgage Association Charter Act or subsection (e) or (f) of section 307 of the Federal Home Loan Mortgage Corporation Act. (c) Procedure.— (1) Notice of charges.— Each notice of charges under this section shall contain a statement of the facts constituting the alleged conduct 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 conduct or violation should issue. (2) Issuance of order.— If the Director finds on the record made at such hearing that any conduct or violation specified in the notice of charges has been established (or the enterprise consents pursuant to section 1373(a)(4)), the Director may issue and serve upon the enterprise, executive officer, or director an order requiring such party to cease and desist from any such conduct or violation and to take affirmative action to correct or remedy the conditions resulting from any such con-duct or violation. (d) Affirmative Action To Correct Conditions Resulting From Violations or Activities.— The authority under this section and section 1372 to issue any order requiring an enterprise, executive officer, or director to take affirmative action to correct or remedy any condition resulting from any conduct or violation with respect to which such order is issued includes the authority— (1) to require an executive officer or a director to make restitution to, or provide reimbursement, indemnification, or guarantee against loss to the enterprise to the extent that such person— (A) was unjustly enriched in connection with such con-duct or violation; or (B) engaged in conduct or a violation that would subject such person to a civil penalty pursuant to section 1376(b)(3); (2) to require an enterprise to seek restitution, or to obtain reimbursement, indemnification, or guarantee against loss; (3) to restrict the growth of the enterprise; (4) to require the enterprise to dispose of any asset involved; (5) to require the enterprise to rescind agreements or contracts; (6) to require the enterprise to employ qualified officers or employees (who may be subject to approval by the Director at the direction of the Director); and (7) to require the enterprise to take such other action as the Director determines appropriate. (e) Authority To Limit Activities.— The authority to issue an order under this section or section 1372 includes the authority to place limitations on the activities or functions of the enterprise or any executive officer or director of the enterprise. (f) Effective Date.— 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 enterprise, executive officer, or director 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 subtitle.

2. 2008

   Federal Housing Finance Regulatory Reform Act of 2008

   Pub. L. 110–289 § 1151(1) · 122 Stat. 2654

   1. Added · 12 U.S.C. § 4631(a); 12 U.S.C. § 4631(b)

      Pub. L. 110–289, § 1151(1), added subsecs. (a) and (b)

   2. Struck · 12 U.S.C. § 4631(a); 12 U.S.C. § 4631(b)

      Pub. L. 110–289, § 1151(1), 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

   Source evidence

   Code amendment note
   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.

   Enacted provision · exact public law section
   (1) by striking subsections (a) and (b) and inserting the following: “(a) Issuance for Unsafe or Unsound Practices and Violations.— “(1) Authority of director.— 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. “(2) Limitation.— The Director may not, pursuant to this section, enforce compliance with any housing goal established under subpart B of part 2 of subtitle A of this title, with section 1336 or 1337 of this title, with subsection (m) or (n) of section 309 of the Federal National Mortgage Association Charter Act (12 U.S.C. 1723a(m), (n)), with subsection (e) or (f) of section 307 of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1456(e), (f)), or with paragraph (5) of section 10(j) of the Federal Home Loan Bank Act (12 U.S.C. 1430(j)). “(b) Issuance for Unsatisfactory Rating.— 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).” ;

3. 2008

   Federal Housing Finance Regulatory Reform Act of 2008

   Pub. L. 110–289 § 1151(2)(A) · 122 Stat. 2654

   1. Substituted · 12 U.S.C. § 4631(c)(1)

      Pub. L. 110–289, § 1151(2)(A), (3)(C), substituted “practice” for “conduct” in two places

   2. Inserted · 12 U.S.C. § 4631(c)(1)

      Pub. L. 110–289, § 1151(2)(A), (3)(C), 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

   Source evidence

   Code amendment note
   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.

   Enacted provision · exact public law section
   (A) in paragraph (1), by inserting before the period at the end the following: “, 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”; and

4. 2008

   Federal Housing Finance Regulatory Reform Act of 2008

   Pub. L. 110–289 § 1151(2)(B) · 122 Stat. 2654

   1. Inserted · 12 U.S.C. § 4631(c)(2)

      Pub. L. 110–289, § 1151(2)(B), (3)(A), (C), inserted “or entity-affiliated party” before “consents”

   2. Substituted · 12 U.S.C. § 4631(c)(2)

      Pub. L. 110–289, § 1151(2)(B), (3)(A), (C), substituted “director, or entity-affiliated party” for “or director” wherever appearing

   3. Substituted · 12 U.S.C. § 4631(c)(2)

      Pub. L. 110–289, § 1151(2)(B), (3)(A), (C), substituted “the regulated entity” for “the enterprise” wherever appearing

   4. Substituted · 12 U.S.C. § 4631(c)(2)

      Pub. L. 110–289, § 1151(2)(B), (3)(A), (C), substituted “practice” for “conduct” wherever appearing

   Source evidence

   Code amendment note
   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.

   Enacted provision · exact public law section
   (B) in paragraph (2)— (i) by striking “or director” and inserting “director, or entity-affiliated party”; and (ii) by inserting “or entity-affiliated party” before “consents”;

5. 2008

   Federal Housing Finance Regulatory Reform Act of 2008

   Pub. L. 110–289 § 1151(3)(B) · 122 Stat. 2654

   1. Substituted · 12 U.S.C. § 4631(d)

      Pub. L. 110–289, § 1151(3)(B), (C), (4)(A), in introductory provisions, substituted “a regulated entity” for “an enterprise”

   2. Substituted · 12 U.S.C. § 4631(d)

      Pub. L. 110–289, § 1151(3)(B), (C), (4)(A), in introductory provisions, substituted “director, or entity-affiliated party” for “or director”

   3. Substituted · 12 U.S.C. § 4631(d)

      Pub. L. 110–289, § 1151(3)(B), (C), (4)(A), in introductory provisions, substituted “practice” for “conduct”

   4. Inserted · 12 U.S.C. § 4631(d)

      Pub. L. 110–289, § 1151(3)(B), (C), (4)(A), in introductory provisions, inserted “to require a regulated entity or entity-affiliated party” after “includes the authority”

   Source evidence

   Code amendment note
   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”.

   Enacted provision · exact public law section
   (B) by striking “an enterprise” each place that term appears and inserting “a regulated entity”; and

6. 2008

   Federal Housing Finance Regulatory Reform Act of 2008

   Pub. L. 110–289 § 1151(4)(B)(i) · 122 Stat. 2654

   1. Struck · 12 U.S.C. § 4631(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”

   2. Substituted · 12 U.S.C. § 4631(d)(1)

      Pub. L. 110–289, § 1151(4)(B)(i), (ii), in introductory provisions, substituted “loss, if” for “loss to the enterprise to the extent that such person”

   Source evidence

   Code amendment note
   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”.

   Enacted provision · exact public law section
   (i) by striking “to require an executive officer or a director to”; and

7. 2008

   Federal Housing Finance Regulatory Reform Act of 2008

   Pub. L. 110–289 § 1151(3)(C) · 122 Stat. 2654

   1. Inserted · 12 U.S.C. § 4631(d)(1)(A)

      Pub. L. 110–289, § 1151(3)(C), (4)(B)(iii), inserted “such entity or party or finance facility” before “was unjustly”

   2. Substituted · 12 U.S.C. § 4631(d)(1)(A)

      Pub. L. 110–289, § 1151(3)(C), (4)(B)(iii), substituted “practice” for “conduct”

   Source evidence

   Code amendment note
   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”.

   Enacted provision · exact public law section
   (C) by striking “conduct” each place that term appears and inserting “practice”;

8. 2008

   Federal Housing Finance Regulatory Reform Act of 2008

   Pub. L. 110–289 § 1151(4)(B)(iv) · 122 Stat. 2654

   1. Added · 12 U.S.C. § 4631(d)(1)(B)

      Pub. L. 110–289, § 1151(4)(B)(iv), added subpar. (B)

   2. Struck · 12 U.S.C. § 4631(d)(1)(B)

      Pub. L. 110–289, § 1151(4)(B)(iv), 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;”

   Source evidence

   Code amendment note
   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;”.

   Enacted provision · exact public law section
   (iv) by striking subparagraph (B) and inserting the following: “(B) the violation or practice involved a reckless disregard for the law or any applicable regulations or prior order of the Director;” ; and

9. 2008

   Federal Housing Finance Regulatory Reform Act of 2008

   Pub. L. 110–289 § 1151(3)(B) · 122 Stat. 2654

   Substituted · 12 U.S.C. § 4631(d)(2)

   Pub. L. 110–289, § 1151(3)(B), substituted “a regulated entity” for “an enterprise”

   Source evidence

   Code amendment note
   Subsec. (d)(2). Pub. L. 110–289, § 1151(3)(B), substituted “a regulated entity” for “an enterprise”.

   Enacted provision · exact public law section
   (B) by striking “an enterprise” each place that term appears and inserting “a regulated entity”; and

10. 2008

    Federal Housing Finance Regulatory Reform Act of 2008

    Pub. L. 110–289 § 1151(3)(A) · 122 Stat. 2654

    Substituted · 12 U.S.C. § 4631(d)(3)

    Pub. L. 110–289, § 1151(3)(A), substituted “the regulated entity” for “the enterprise”

    Source evidence

    Code amendment note
    Subsec. (d)(3). Pub. L. 110–289, § 1151(3)(A), substituted “the regulated entity” for “the enterprise”.

    Enacted provision · exact public law section
    (A) by striking “the enterprise” each place that term appears and inserting “the regulated entity”;

11. 2008

    Federal Housing Finance Regulatory Reform Act of 2008

    Pub. L. 110–289 § 1151(3)(A) · 122 Stat. 2654

    1. Substituted · 12 U.S.C. § 4631(d)(4)

       Pub. L. 110–289, § 1151(3)(A), (4)(C), substituted “the regulated entity” for “the enterprise”

    2. Inserted · 12 U.S.C. § 4631(d)(4)

       Pub. L. 110–289, § 1151(3)(A), (4)(C), inserted “loan or” before “asset”

    Source evidence

    Code amendment note
    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”.

    Enacted provision · exact public law section
    (A) by striking “the enterprise” each place that term appears and inserting “the regulated entity”;

12. 2008

    Federal Housing Finance Regulatory Reform Act of 2008

    Pub. L. 110–289 § 1151(3)(A) · 122 Stat. 2654

    Substituted · 12 U.S.C. § 4631(d)(5)(7)

    Pub. L. 110–289, § 1151(3)(A), substituted “the regulated entity” for “the enterprise”

    Source evidence

    Code amendment note
    Subsec. (d)(5) to (7). Pub. L. 110–289, § 1151(3)(A), substituted “the regulated entity” for “the enterprise”.

    Enacted provision · exact public law section
    (A) by striking “the enterprise” each place that term appears and inserting “the regulated entity”;

13. 2008

    Federal Housing Finance Regulatory Reform Act of 2008

    Pub. L. 110–289 § 1151(3)(A) · 122 Stat. 2654

    1. Substituted · 12 U.S.C. § 4631(e)

       Pub. L. 110–289, § 1151(3)(A), (5), substituted “the regulated entity” for “the enterprise” in two places

    2. Inserted · 12 U.S.C. § 4631(e)

       Pub. L. 110–289, § 1151(3)(A), (5), inserted “or entity-affiliated party” before “or any executive” and before period at end

    Source evidence

    Code amendment note
    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.

    Enacted provision · exact public law section
    (A) by striking “the enterprise” each place that term appears and inserting “the regulated entity”;

14. 2008

    Federal Housing Finance Regulatory Reform Act of 2008

    Pub. L. 110–289 § 1151(6) · 122 Stat. 2654

    1. Substituted · 12 U.S.C. § 4631(f)

       Pub. L. 110–289, § 1151(6), substituted “regulated entity, finance facility,” for “enterprise”

    2. Substituted · 12 U.S.C. § 4631(f)

       Pub. L. 110–289, § 1151(6), substituted “director, or entity-affiliated party” for “or director”

    Source evidence

    Code amendment note
    Subsec. (f). Pub. L. 110–289, § 1151(6), substituted “regulated entity, finance facility,” for “enterprise” and “director, or entity-affiliated party” for “or director”.

    Enacted provision · exact public law section
    (6) in subsection (f)— (A) by striking “enterprise” and inserting “regulated entity, finance facility,”; and (B) by striking “or director” and inserting “director, or entity-affiliated party”.

28 of 28 references resolved to an enrolled provision