§ 505. Civil money penalty

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. 1913

   Financial Institutions Regulatory and Interest Rate Control Act of 1978

   Pub. L. 95–630 title I § 102 · 92 Stat. 3641

   Enacted · 12 U.S.C. § 505

   Dec. 23, 1913, ch. 6, § 19(l), formerly § 19(j), as added Pub. L. 95–630, title I, § 102, Nov. 10, 1978, 92 Stat. 3642

   Source evidence

   Code source credit
   Dec. 23, 1913, ch. 6, § 19(l), formerly § 19(j), as added Pub. L. 95–630, title I, § 102, Nov. 10, 1978, 92 Stat. 3642

   Enacted provision · exact public law section
   Sec. 102. Section 19 of the Federal Reserve Act is amended by adding at the end thereof the following new subsection: “(j) (1) Any member bank which violates or any officer, director, employee, agent, or other person participating in the conduct of the affairs of such member bank who violates any provision of this section, or any regulation or order issued by the Board pursuant thereto, shall forfeit and pay a civil money penalty of not more than $100 per day Notice. “Violates.” for each day during which such violation continues. The penalty shall be assessed and collected by the Board by written notice. As used in this section, the term ‘violates’ includes without any limitation any action (alone or with another or others) for or toward causing, bringing about, participating in, counseling, or aiding or abetting a violation. “(2) In determining the amount of the penalty the Board shall take into account the appropriateness of the penalty with respect to the size of financial resources and good faith of the member bank or person charged, the gravity of the violation, the history of previous violations, and such other matters as justice may require. “(3) The member bank or person assessed shall be afforded an opportunity for agency hearing, upon request made within ten days after issuance of the notice of assessment. In such hearing, all issues shall be determined on the record pursuant to section 554 of title 5, United States Code. The agency determination shall be made by final order which may be reviewed only as provided in paragraph (4). If no hearing is requested as herein provided, the assessment shall constitute a final and unappealable order. “(4) Any member bank or person against whom an order imposing a civil money penalty has been entered after agency hearing under this section may obtain review by the United States court of appeals for the circuit in which the home office of the member bank is located, or the United States Court of Appeals for the District of Columbia Circuit, by filing a notice of appeal in such court within ten days from the date of such order, and simultaneously sending a copy of such Certification. notice by registered or certified mail to the Board. The Board shall promptly certify and file in such court the record upon which the penalty was imposed, as provided in section 2112 of title 28. United States Code. The findings of the Board shall be set aside if found to be unsupported by substantial evidence as provided by section 706 (2)(E) of title 5, United States Code. “(5) If any member bank or person fails to pay an assessment after it has become a final and unappealable order or after the court of appeals has entered final judgment in favor of the agency, the Board shall refer the matter to the Attorney General, who shall recover the amount assessed by action in the appropriate United States district court. In such action the validity and appropriateness of the final order imposing the penalty shall not be subject to review. “(6) The Board shall promulgate regulations establishing procedures Regulations. necessary to implement this subsection. “(7) All penalties collected under authority of this subsection shall be covered into the Treasury of the United States.”.

2. 1982

   Garn-St Germain Depository Institutions Act of 1982

   Pub. L. 97–320 § 424(a) · 96 Stat. 1469

   1. Inserted · 12 U.S.C. § 505(1)

      Pub. L. 97–320, § 424(a), (d)(2), inserted proviso giving Board discretionary authority to compromise, etc., any civil money penalty imposed under this section

   2. Substituted · 12 U.S.C. § 505(1)

      Pub. L. 97–320, § 424(a), (d)(2), substituted “may be assessed” for “shall be assessed”

   Source evidence

   Code amendment note
   Par. (1). Pub. L. 97–320, § 424(a), (d)(2), inserted proviso giving Board discretionary authority to compromise, etc., any civil money penalty imposed under this section, and substituted “may be assessed” for “shall be assessed”.

   Enacted provision · exact public law section
   (a) Section 19(l)(1) of the Federal Reserve Act (12 U.S.C. 505(1)); section 5(d)(8)(B)(i) of the Home Owners’ Loan Act of 1933 (12 U.S.C. 1464(d)(8)(B)(i)); section 8(b)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. 1847(b)(1)); and section 206(j)(2)(A) of the Federal Credit Union Act (12 U.S.C. 1786(j)(2)(A)) are amended by inserting before the period at the end of the first sentence thereof the following: “: Provided, That the Board may, in its discretion, compromise, modify, or remit any civil money penalty which is subject to imposition or has been imposed under authority of this subsection”.

3. 1982

   Garn-St Germain Depository Institutions Act of 1982

   Pub. L. 97–320 § 424(e) · 96 Stat. 1469

   Substituted · 12 U.S.C. § 505(4)

   Pub. L. 97–320, § 424(e), substituted “twenty days from the service” for “ten days from the date”

   Source evidence

   Code amendment note
   Par. (4). Pub. L. 97–320, § 424(e), substituted “twenty days from the service” for “ten days from the date”.

   Enacted provision · exact public law section
   (e) Sections 29(d) and 19(l)(4) of the Federal Reserve Act (12 U.S.C. 504(d) and 505(4)), 18(j)(3)(D) and 8(i)(2)(iv) of the Federal Deposit Insurance Act (12 U.S.C. 1828(j)(3)(D) and 1818(i)(2)(iv)), 407(k)(3)(D) of the National Housing Act (12 U.S.C. 1730(k)(3)(D)), 5(d)(8)(B)(iv) of the Home Owners’ Loan Act of 1933 (12 U.S.C. 1464(d)(8)(B)(iv)), 206(j)(2)(D) of the Federal Credit Union Act (12 U.S.C. 1786(j)(2)(D)), and 106(b)(2)(F)(iv) of the Bank Holding Company Act Amendments of 1970 (12 U.S.C. 1972(2)(F)(iv)) are amended by striking out “ten days from the date” in each section and inserting in lieu thereof “twenty days from the service”.

4. 1989

   Financial Institutions Reform, Recovery, and Enforcement Act of 1989

   Pub. L. 101–73 title IX § 907(h) · 103 Stat. 183

   Amended · 12 U.S.C. § 505

   Pub. L. 101–73 amended section generally, revising and restating as pars. (1) to (9) provisions of former pars. (1) to (7) which related to civil penalty respecting depository, reserve, etc., requirements; amount; hearing; review; action by Attorney General; and regulations

   Source evidence

   Code amendment note
   Pub. L. 101–73 amended section generally, revising and restating as pars. (1) to (9) provisions of former pars. (1) to (7) which related to civil penalty respecting depository, reserve, etc., requirements; amount; hearing; review; action by Attorney General; and regulations.

   Enacted provision · exact public law section
   (h) Member Bank.— Section 19(1) of the Federal Reserve Act (12 U.S.C. 505(1)) is amended to read as follows: “(l) Civil Money Penalty.— “(1) First tier.— Any member bank which, and any institution-affiliated party (within the meaning of section 3(u) of the Federal Deposit Insurance Act) with respect to such member bank who, violates any provision of this section, or any regulation issued pursuant thereto, shall forfeit and pay a civil penalty of not more than $5,000 for each day during which such violation continues. “(2) Second tier.— Notwithstanding paragraph (1), any member bank which, and any institution-affiliated party (within the meaning of section 3(u) of the Federal Deposit Insurance Act) with respect to such member bank who— “(A) (i) commits any violation described in paragraph (1); “(ii) recklessly engages in an unsafe or unsound practice in conducting the affairs of such member bank; or “(ii) breaches any fiduciary duty; “(B) which violation, practice, or breach— “(i) is part of a pattern of misconduct; “(ii) causes or is likely to cause more than a minimal loss to such member bank; or “(iii) results in pecuniary gain or other benefit to such party, shall forfeit and pay a civil penalty of not more than $25,000 for each day during which such violation, practice, or breach continues. “(3) Third tier.— Notwithstanding paragraphs (1) and (2), any member bank which, and any institution-affiliated party (within the meaning of section 3(u) of the Federal Deposit Insurance Act) with respect to such member bank who— “(A) knowingly— “(i) commits any violation described in paragraph (1); “(ii) engages in any unsafe or unsound practice in conducting the affairs of such member bank; or “(iii) breaches any fiduciary duty; and “(B) knowingly or recklessly causes a substantial loss to such member bank or a substantial pecuniary gain or other benefit to such party by reason of such violation, practice, or breach, shall forfeit and pay a civil penalty in an amount not to exceed the applicable maximum amount determined under paragraph (4) for each day during which such violation, practice, or breach continues. “(4) Maximum amounts of penalties for any violation described in paragraph (3).— The maximum daily amount of any civil penalty which may be assessed pursuant to paragraph (3) for any violation, practice, or breach described in such paragraph is— “(A) in the case of any person other than a member bank, an amount not to exceed $1,000,000; and “(B) in the case of a member bank, an amount not to exceed the lesser of— “(i) $1,000,000; or “(ii) 1 percent of the total assets of such member bank. “(5) Assessment; etc.— Any penalty imposed under paragraph (1), (2), or (3) may be assessed and collected by the Board in the manner provided in subparagraphs (E), (F), (G), and (I) of section 8(i)(2) of the Federal Deposit Insurance Act for penalties imposed (under such section) and any such assessment shall be subject to the provisions of such section. “(6) Hearing.— The member bank or other person against whom any penalty is assessed under this subsection shall be afforded an agency hearing if such member bank or person submits a request for such hearing within 20 days after the issuance of the notice of assessment. Section 8(h) of the Federal Deposit Insurance Act shall apply to any proceeding under this subsection. “(7) Disbursement.— All penalties collected under authority of this subsection shall be deposited into the Treasury. “(8) Violate defined.— For purposes of this section, the term ‘violate’ includes any action (alone or with another or others) for or toward causing, bringing about, participating in, counseling, or aiding or abetting a violation. “(9) Regulations.— The Board shall prescribe regulations establishing such procedures as may be necessary to carry out this subsection.”.

   Effective date note
   Amendment by Pub. L. 101–73 applicable to conduct engaged in after Aug. 9, 1989, except that increased maximum penalties of $5,000 and $25,000 may apply to conduct engaged in before such date if such conduct is not already subject to a notice issued by the appropriate agency and occurred after completion of the last report of the examination of the institution by the appropriate agency occurring before Aug. 9, 1989, see section 907(l) of Pub. L. 101–73, set out as a note under section 93 of this title.

5 of 5 references resolved to an enrolled provision