12 U.S.C. § 2261 — Cease and desist proceedings

Page 1363 TITLE 12—BANKS AND BANKING § 2262 bonds, debentures, and other obligations under this chapter. (Pub. L. 92–181, title V, § 5.24, formerly § 5.25, Dec. 10, 1971, 85 Stat. 624; renumbered § 5.24, Pub. L. 99–205, title II, § 203(b), Dec. 23, 1985, 99 Stat. 1694.) Editorial Notes PRIOR PROVISIONS A prior section 5.24 of Pub. L. 92–181 was renumbered section 5.23 and is classified to section 2258 of this title. § 2260. Transferred Editorial Notes CODIFICATION Section, Pub. L. 92–181, title V, § 5.30, as added Pub. L. 96–592, title V, § 509, Dec. 24, 1980, 94 Stat. 3450, which re- lated to audit and report to Congress by the Comp- troller General, was renumbered section 5.44 of Pub. L. 92–181 by Pub. L. 99–205, title II, § 205(a)(2), Dec. 23, 1985, 99 Stat. 1703, transferred to section 2275 of this title, and repealed by Pub. L. 115–334, title V, § 5411(36), Dec. 20, 2018, 132 Stat. 4683. PART C—ENFORCEMENT POWERS OF FARM CREDIT ADMINISTRATION § 2261. Cease and desist proceedings (a) If, in the opinion of the Farm Credit Ad- ministration, any institution in the Farm Credit System, or any director, officer, employee, agent, or other person participating in the con- duct of the affairs of such an institution is en- gaging or has engaged, or the Farm Credit Ad- ministration has reasonable cause to believe that the institution or any director, officer, em- ployee, agent, or other person participating in the conduct of the affairs of such institution is about to engage, in an unsafe or unsound prac- tice in conducting the business of such institu- tion, or is violating or has violated, or the Farm Credit Administration has reasonable cause to believe that the institution or any director, offi- cer, employee, agent, or other person partici- pating in the conduct of the affairs of such insti- tution is about to violate, a law, rule, or regula- tion, or any condition imposed in writing by the Farm Credit Administration in connection with the granting of any application or other request by the institution or any written agreement en- tered into with the Farm Credit Administration, the Farm Credit Administration may issue and serve upon the institution or such director, offi- cer, employee, agent, or other person a notice of charges in respect thereof. The notice shall con- tain a statement of the facts constituting the alleged violation or violations or the unsafe or unsound practice or practices, and shall fix a time and place at which a hearing will be held to determine whether an order to cease and de- sist therefrom should issue against the institu- tion or the director, officer, employee, agent, or other person participating in the conduct of the affairs of such institution. Such hearing shall be fixed for a date not earlier than thirty days nor later than sixty days after service of such notice unless an earlier or a later date is set by the Farm Credit Administration at the request of any party so served. Unless the party or parties so served shall appear at the hearing personally or by a duly authorized representative, they shall be deemed to have consented to the issuance of the cease and desist order. In the event of such consent, or if upon the record made at any such hearing, the Farm Credit Ad- ministration shall find that any violation or un- safe or unsound practice specified in the notice of charges has been established, the Farm Credit Administration may issue and serve upon the in- stitution or the director, officer, employee, agent, or other person participating in the con- duct of the affairs of such institution an order to cease and desist from any such violation or practice. Such order may, by provisions that may be mandatory or otherwise, require the in- stitution or its directors, officers, employees, agents, and other persons participating in the conduct of the affairs of such institution to cease and desist from the same, and, further, to take affirmative action to correct the condi- tions resulting from any such violation or prac- tice. (b) A cease and desist order shall become effec- tive at the expiration of thirty days after the service of such order upon the institution or other person concerned (except in the case of a cease and desist order issued upon consent, which shall become effective at the time speci- fied therein), and shall remain effective and en- forceable as provided therein except to such ex- tent as it is stayed, modified, terminated, or set aside by action of the Farm Credit Administra- tion or a reviewing court. (Pub. L. 92–181, title V, § 5.25, as added Pub. L. 99–205, title II, § 204, Dec. 23, 1985, 99 Stat. 1694.) Editorial Notes PRIOR PROVISIONS A prior section 5.25 of Pub. L. 92–181 was renumbered section 5.24 and is classified to section 2259 of this title. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective thirty days after Dec. 23, 1985, see section 401 of Pub. L. 99–205, set out as an Effective Date of 1985 Amendment note under section 2001 of this title. § 2262. Temporary cease and desist orders (a) Whenever the Farm Credit Administration shall determine that the violation or threatened violation or the unsafe or unsound practice or practices, specified in the notice of charges served upon the institution or any director, offi- cer, employee, agent, or other person partici- pating in the conduct of the affairs of such insti- tution under section 2261 of this title, or the continuation thereof, is likely to cause insol- vency or substantial dissipation of assets or earnings of the institution, or is likely to seri- ously weaken the condition of the institution or otherwise seriously prejudice the interests of the investors in Farm Credit System obligations or shareholders in the institution prior to the completion of the proceedings conducted under section 2261 of this title, the Farm Credit Ad- ministration may issue a temporary order re- quiring the institution or such director, officer,