12 U.S.C. § 2268 — Penalty

Page 1369 TITLE 12—BANKS AND BANKING § 2268 after the date on which the party ceased to be an institution-affiliated party with respect to the applicable Farm Credit System institution. (d) Applicability The date on which a party ceases to be an in- stitution-affiliated party described in subsection (c) may occur before, on, or after December 20, 2018. (Pub. L. 92–181, title V, § 5.31A, as added Pub. L. 115–334, title V, § 5407, Dec. 20, 2018, 132 Stat. 4677.) § 2268. Penalty (a) Forfeiture and payment; compromise, modi- fication, or remitting by Farm Credit Admin- istration; assessment and collection by writ- ten notice Any institution in the System that violates or any officer, director, employee, agent, or other person participating in the conduct of the af- fairs of such an institution who violates the terms of any order that has become final and was issued under section 2261 or 2262 of this title, shall forfeit and pay a civil penalty of not more than $1,000 per day for each day during which such violation continues. Any such institution or person who violates any provision of this chapter or any regulation issued under this chapter shall forfeit and pay a civil penalty of not more than $500 per day for each day during which such violation continues. Notwith- standing the preceding sentences, the Farm Credit Administration may, in its discretion, compromise, modify, or remit any civil money penalty that is subject to imposition or has been imposed under such authority. The penalty may be assessed and collected by the Farm Credit Administration by written notice. (b) Factors determining amount Before determining whether to assess a civil money penalty and determining the amount of such penalty, the Farm Credit Administration shall notify the institution or person to be as- sessed of the violation or violations alleged to have occurred or to be occurring, and shall so- licit the views of the institution or person re- garding the imposition of such penalty. In deter- mining the amount of the penalty, the Farm Credit Administration shall take into account the appropriateness of the penalty with respect to the size of financial resources and good faith of the System institution or person charged, the gravity of the violation, the history of previous violations, and such other matters as justice may require. (c) Notice and hearing; final orders The System institution or person assessed shall be afforded an opportunity for a hearing by the Farm Credit Administration, upon request made within ten days after issuance of the no- tice of assessment. In such hearing all issues shall be determined on the record pursuant to section 554 of title 5. The Farm Credit Adminis- tration determination shall be made by final order which may be reviewed only as provided in subsection (d). If no hearing is requested as herein provided, the assessment shall constitute a final and unappealable order. (d) Judicial review Any System institution or person against whom an order imposing a civil money penalty has been entered after a Farm Credit Adminis- tration hearing under this section may obtain review by the United States court of appeals for the circuit in which the home office of the Sys- tem institution 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 twenty days after the service of such order, and simultaneously sending a copy of such notice by registered or certified mail to the Farm Credit Administration. The Farm Credit Administration shall promptly certify and file in such Court the record upon which the penalty was imposed, as provided in section 2112 of title 28. Final orders of the Farm Credit Administra- tion issued under subsection (c) shall be review- able under chapter 7 of title 5. (e) Action by Attorney General to recover amount assessed If any System institution or person fails to pay an assessment after it has become a final and unappealable order, or after the court of ap- peals has entered final judgment in favor of the Farm Credit Administration, the Farm Credit Administration shall refer the matter to the At- torney General, who shall recover the amount assessed by action in the appropriate United States district court. In such action, the valid- ity and appropriateness of the final order impos- ing the penalty shall not be subject to review. (f) Rules and regulations The Farm Credit Administration shall promul- gate regulations establishing procedures nec- essary to implement section 2267 of this title and this section. (g) Payment into Treasury All penalties collected under authority of this section shall be covered into the Treasury of the United States. (h) Directives as final orders For purposes of this section, any directive issued under section 2154(b)(2), 2154a(e), or 2202a(h) of this title shall be treated as an order that has become final and was issued under sec- tion 2261 of this title. (Pub. L. 92–181, title V, § 5.32, as added Pub. L. 99–205, title II, § 204, Dec. 23, 1985, 99 Stat. 1700; amended Pub. L. 100–233, title IV, § 423, title VIII, §§ 804(a)(2), 805(dd), Jan. 6, 1988, 101 Stat. 1656, 1714, 1717; Pub. L. 115–334, title V, § 5411(33), Dec. 20, 2018, 132 Stat. 4683.) Editorial Notes AMENDMENTS 2018—Subsec. (h). Pub. L. 115–334 substituted ‘‘2202a(h)’’ for ‘‘2202a(i)’’. 1988—Subsec. (a). Pub. L. 100–233, § 423(a), substituted ‘‘continues. Any such institution or person who vio- lates any provision of this chapter or any regulation issued under this chapter shall forfeit and pay a civil penalty of not more than $500 per day for each day dur- ing which such violation continues. Notwithstanding the preceding sentences,’’ for ‘‘continues, but’’. Subsec. (b). Pub. L. 100–233, § 423(b), inserted ‘‘Before determining whether to assess a civil money penalty Page 1370 TITLE 12—BANKS AND BANKING § 2269 and determining the amount of such penalty, the Farm Credit Administration shall notify the institution or person to be assessed of the violation or violations al- leged to have occurred or to be occurring, and shall so- licit the views of the institution or person regarding the imposition of such penalty.’’ Subsec. (d). Pub. L. 100–233, § 423(c), substituted ‘‘Final orders of the Farm Credit Administration issued under subsection (c) shall be reviewable under chapter 7 of title 5’’ for ‘‘The findings of the Farm Credit Ad- ministration shall be set aside if found to be unsup- ported by substantial evidence as provided by section 706(2)(E) of title 5’’. Subsec. (f). Pub. L. 100–233, § 805(dd), substituted ‘‘sec- tion 2267 of this title and this section’’ for ‘‘sections 2267 and 2268 of this title’’. Subsec. (h). Pub. L. 100–233, § 804(a)(2), added subsec. (h). 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. § 2269. Further penalties Any director or officer, or former director or officer of a System institution, or any other per- son, against whom there is outstanding and ef- fective any notice or order (which is an order which has become final) served upon such direc- tor, officer, or other person under section 2264 or 2265 of this title, and who (1) participates in any manner in the conduct of the affairs of the insti- tution involved, or directly or indirectly solicits or procures, or transfers or attempts to transfer, or votes or attempts to vote, any proxies, con- sents, or authorizations in respect of any voting rights in such institution, or (2) without the prior written approval of the Farm Credit Ad- ministration, votes for a director, serves or acts as a director, officer, or employee of any System institution, shall upon conviction be fined not more than $5,000 or imprisoned for not more than one year, or both. (Pub. L. 92–181, title V, § 5.33, as added Pub. L. 99–205, title II, § 204, Dec. 23, 1985, 99 Stat. 1701.) 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. § 2270. Replacement of suspended or removed di- rectors If at any time, because of the suspension or re- moval of one or more directors pursuant to sec- tion 2264 or 2265 of this title, there shall be on the board of directors of a System institution less than a quorum of directors not so sus- pended, the Chairman shall appoint persons to serve temporarily as directors in their place and stead so as to establish a quorum until such time as those who have been removed are rein- stated or their respective successors are duly elected and take office. (Pub. L. 92–181, title V, § 5.34, as added Pub. L. 99–205, title II, § 204, Dec. 23, 1985, 99 Stat. 1701.) 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. § 2271. Definitions As used in this part— (1) the terms ‘‘cease and desist order that has become final’’ and ‘‘order which has be- come final’’ mean a cease and desist order, or an order, issued by the Farm Credit Adminis- tration with the consent of the System insti- tution or the director or officer or other per- son concerned, or with respect to which no pe- tition for review of the action of the Farm Credit Administration has been filed and per- fected in a court of appeals as specified in sec- tion 2266(b) of this title, or with respect to which the action of the court in which such petition is so filed is not subject to further re- view by the Supreme Court of the United States in proceedings provided for in section 2266(b) of this title, or an order issued under section 2265 of this title; (2) the term ‘‘violation’’ includes without limitation any action (alone or with another or others) for or toward causing, bringing about, participating in, counseling, or aiding or abetting a violation; (3) the terms ‘‘institution in the System’’, ‘‘System institution’’, and ‘‘institution’’ mean all institutions enumerated in section 2002 of this title, any service organization chartered under part E of subchapter IV of this chapter, and the Financial Assistance Corporation; (4) the term ‘‘institution-affiliated party’’ means— (A) a director, officer, employee, share- holder, or agent of a System institution; (B) an independent contractor (including an attorney, appraiser, or accountant) who knowingly or recklessly participates in— (i) a violation of law (including regula- tions) that is associated with the oper- ations and activities of 1 or more System institutions; (ii) a breach of fiduciary duty; or (iii) an unsafe practice that causes or is likely to cause more than a minimum fi- nancial loss to, or a significant adverse ef- fect on, a System institution; and (C) any other person, as determined by the Farm Credit Administration (by regulation or on a case-by-case basis) who participates in the conduct of the affairs of a System in- stitution; and (5) the term ‘‘unsafe or unsound practice’’ shall— (A) have the meaning given to it by the Farm Credit Administration by regulation, rule, or order; and (B) mean any significant noncompliance by a System institution (as determined by the Farm Credit Administration, in con- sultation with the Farm Credit System In- surance Corporation) with any term or con- dition imposed on the institution by the