12 U.S.C. § 93 — Violation of provisions of chapter

Page 52 TITLE 12—BANKS AND BANKING § 93 1 So in original. The words ‘‘, commits any violation described in paragraph (1) which’’ probably should not appear. 2 So in original. The word ‘‘any’’ probably should not appear. 3 So in original. Probably should be ‘‘not to’’. mit. On and after the date of enactment of this Act the exercise of fiduciary powers by national banks shall be subject to the provisions of this Act and the require- ments of regulations issued by the Comptroller of the Currency pursuant to the authority granted by this Act.’’ § 93. Violation of provisions of chapter (a) Forfeiture of franchise; personal liability of directors If the directors of any national banking asso- ciation shall knowingly violate, or knowingly permit any of the officers, agents, or servants of the association to violate any of the provisions of title 62 of the Revised Statutes, all the rights, privileges, and franchises of the association shall be thereby forfeited. Such violation shall, however, be determined and adjudged by a prop- er district or Territorial court of the United States in a suit brought for that purpose by the Comptroller of the Currency, in his own name, before the association shall be declared dis- solved. And in cases of such violation, every di- rector who participated in or assented to the same shall be held liable in his personal and in- dividual capacity for all damages which the as- sociation, its shareholders, or any other person, shall have sustained in consequence of such vio- lation. (b) Civil money penalty (1) First tier Any national banking association which, and any institution-affiliated party (within the meaning of section 1813(u) of this title) with respect to such association who, violates any provision of title 62 of the Revised Stat- utes or any of the provisions of section 92a of this title, 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 national banking association which, and any institu- tion-affiliated party (within the meaning of section 1813(u) of this title) with respect to such association who, commits any violation described in paragraph (1) which— 1 (A)(i) commits any violation described in any 2 paragraph (1); (ii) recklessly engages in an unsafe or un- sound practice in conducting the affairs of such association; or (iii) 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 association; 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 national banking association which, and any institution-affiliated party (within the mean- ing of section 1813(u) of this title) with respect to such association 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 association; or (iii) breaches any fiduciary duty; and (B) knowingly or recklessly causes a sub- stantial loss to such association or a sub- stantial pecuniary gain or other benefit to such party by reason of such violation, prac- tice, 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, prac- tice, or breach continues. (4) Maximum amounts of penalties for any vio- lation 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 national banking association, an amount to not 3 exceed $1,000,000; and (B) in the case of a national banking asso- ciation, an amount not to exceed the lesser of— (i) $1,000,000; or (ii) 1 percent of the total assets of such association. (5) Assessment; etc. Any penalty imposed under paragraph (1), (2), or (3) shall be assessed and collected by the Comptroller of the Currency in the manner provided in subparagraphs (E), (F), (G), and (I) of section 1818(i)(2) of this title for penalties imposed (under such section) and any such as- sessment shall be subject to the provisions of such section. (6) Hearing The association or other person against whom any penalty is assessed under this sub- section shall be afforded an agency hearing if such association or person submits a request for such hearing within 20 days after the issuance of the notice of assessment. Section 1818(h) of this title shall apply to any pro- ceeding 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 ‘‘vio- late’’ includes any action (alone or with an- other or others) for or toward causing, bring- ing about, participating in, counseling, or aid- ing or abetting a violation. Page 53 TITLE 12—BANKS AND BANKING § 93 4 So in original. No pars. (9) to (11) have been enacted. 5 So in original. Probably should be ‘‘(e)’’. (12) 4 Regulations The Comptroller shall prescribe regulations establishing such procedures as may be nec- essary to carry out this subsection. (c) Notice under this section after separation from service The resignation, termination of employment or participation, or separation of an institution- affiliated party (within the meaning of section 1813(u) of this title) with respect to such an asso- ciation (including a separation caused by the closing of such an association) shall not affect the jurisdiction and authority of the Comp- troller of the Currency to issue any notice and proceed under this section against any such party, if such notice is served before the end of the 6-year period beginning on the date such party ceased to be such a party with respect to such association (whether such date occurs be- fore, on, or after August 9, 1989). (d) Forfeiture of franchise for money laundering or cash transaction reporting offenses (1) In general (A) Conviction of title 18 offenses (i) Duty to notify If a national bank, a Federal branch, or Federal agency has been convicted of any criminal offense under section 1956 or 1957 of title 18, the Attorney General shall pro- vide to the Comptroller of the Currency a written notification of the conviction and shall include a certified copy of the order of conviction from the court rendering the decision. (ii) Notice of termination; pretermination hearing After receiving written notification from the Attorney General of such a conviction, the Comptroller of the Currency shall issue to the national bank, Federal branch, or Federal agency a notice of the Comp- troller’s intention to terminate all rights, privileges, and franchises of the bank, Fed- eral branch, or Federal agency and sched- ule a pretermination hearing. (B) Conviction of title 31 offenses If a national bank, a Federal branch, or a Federal agency is convicted of any criminal offense under section 5322 or 5324 of title 31, after receiving written notification from the Attorney General, the Comptroller of the Currency may issue to the national bank, Federal branch, or Federal agency a notice of the Comptroller’s intention to terminate all rights, privileges, and franchises of the bank, Federal branch, or Federal agency and schedule a pretermination hearing. (C) Judicial review Section 1818(h) of this title shall apply to any proceeding under this subsection. (2) Factors to be considered In determining whether a franchise shall be forfeited under paragraph (1), the Comptroller of the Currency shall take into account the following factors: (A) The extent to which directors or senior executive officers of the national bank, Fed- eral branch, or Federal agency knew of, or were involved in, the commission of the money laundering offense of which the bank, Federal branch, or Federal agency was found guilty. (B) The extent to which the offense oc- curred despite the existence of policies and procedures within the national bank, Fed- eral branch, or Federal agency which were designed to prevent the occurrence of any such offense. (C) The extent to which the national bank, Federal branch, or Federal agency has fully cooperated with law enforcement authorities with respect to the investigation of the money laundering offense of which the bank, Federal branch, or Federal agency was found guilty. (D) The extent to which the national bank, Federal branch, or Federal agency has im- plemented additional internal controls (since the commission of the offense of which the bank, Federal branch, or Federal agency was found guilty) to prevent the oc- currence of any other money laundering of- fense. (E) The extent to which the interest of the local community in having adequate deposit and credit services available would be threatened by the forfeiture of the franchise. (3) Successor liability This subsection shall not apply to a suc- cessor to the interests of, or a person who ac- quires, a bank, a Federal branch, or a Federal agency that violated a provision of law de- scribed in paragraph (1), if the successor suc- ceeds to the interests of the violator, or the acquisition is made, in good faith and not for purposes of evading this subsection or regula- tions prescribed under this subsection. (4) ‘‘Senior executive officer’’ defined The term ‘‘senior executive officer’’ has the same meaning as in regulations prescribed under section 1831i(f) of this title. (d) 5 Authority The Comptroller of the Currency may act in the Comptroller’s own name and through the Comptroller’s own attorneys in enforcing any provision of title 62 of the Revised Statutes, reg- ulations thereunder, or any other law or regula- tion, or in any action, suit, or proceeding to which the Comptroller of the Currency is a party. (R.S. § 5239; Mar. 3, 1911, ch. 231, § 291, 36 Stat. 1167; Pub. L. 95–630, title I, § 103, Nov. 10, 1978, 92 Stat. 3643; Pub. L. 97–320, title IV, § 424(d)(3), (f), (g), Oct. 15, 1982, 96 Stat. 1523; Pub. L. 97–457, § 24, Jan. 12, 1983, 96 Stat. 2510; Pub. L. 101–73, title IX, §§ 905(e), 907(e), Aug. 9, 1989, 103 Stat. 460, 469; Pub. L. 102–550, title XV, § 1502(a), Oct. 28, 1992, 106 Stat. 4045; Pub. L. 103–322, title XXXIII, § 330017(b)(2), Sept. 13, 1994, 108 Stat. 2149; Pub. L. 103–325, title III, § 331(b)(3), title IV, §§ 411(c)(2)(C), 413(b)(2), Sept. 23, 1994, 108 Stat. 2232, 2253, 2254.) Page 54 TITLE 12—BANKS AND BANKING § 93a Editorial Notes REFERENCES IN TEXT Title 62 of the Revised Statutes, referred to in sub- secs. (a), (b)(1), and (d), was in the original ‘‘this Title’’ meaning title LXII of the Revised Statutes, consisting of R.S. §§ 5133 to 5244, which are classified to this sec- tion and sections 16, 21, 22 to 24a, 25a, 25b, 26, 27, 29, 35 to 37, 39, 43, 52, 53, 55 to 57, 59 to 62, 66, 71, 72 to 76, 81, 83 to 86, 90, 91, 93a, 94, 141 to 144, 161, 164, 181, 182, 192 to 194, 196, 215c, 481 to 485, 501, 541, 548, and 582 of this title. See, also, sections 8, 333, 334, 475, 656, 709, 1004, and 1005 of Title 18, Crimes and Criminal Procedure. For com- plete classification of R.S. §§ 5133 to 5244 to the Code, see Tables. CODIFICATION R.S. § 5239 derived from act June 3, 1864, ch. 106, § 53, 13 Stat. 116, which was the National Bank Act. See sec- tion 38 of this title. Act Mar. 3, 1911, conferred the powers and duties of the former circuit courts upon the district courts. AMENDMENTS 1994—Subsec. (c). Pub. L. 103–322, § 330017(b)(2), and Pub. L. 103–325, § 413(b)(2), amended section identically, redesignating subsec. (c), relating to forfeiture of fran- chise for money laundering, as (d). Subsec. (d). Pub. L. 103–322, § 330017(b)(2), and Pub. L. 103–325, § 413(b)(2), amended section identically, redesig- nating subsec. (c), relating to forfeiture of franchise for money laundering, as (d). Pub. L. 103–325, § 331(b)(3), added subsec. (d) relating to authority. Subsec. (d)(1)(B). Pub. L. 103–325, § 411(c)(2)(C), sub- stituted ‘‘section 5322 or 5324 of title 31’’ for ‘‘section 5322 of title 31’’. 1992—Subsec. (c). Pub. L. 102–550 added subsec. (c) re- lating to forfeiture of franchise for money laundering. 1989—Subsec. (b). Pub. L. 101–73, § 907(e), amended sub- sec. (b) generally, revising and restating as pars. (1) to (8) and (12) provisions of former pars. (1) to (8). Subsec. (c). Pub. L. 101–73, § 905(e), added subsec. (c) relating to notice after separation from service. 1982—Subsec. (b)(1). Pub. L. 97–320, as amended by Pub. L. 97–457, inserted ‘‘or any of the provisions of sec- tion 92a of this title’’, and substituted ‘‘may be as- sessed’’ for ‘‘shall be assessed’’ and ‘‘title’’ for ‘‘chap- ter’’. 1978—Pub. L. 95–630 designated existing provisions as subsec. (a) and added subsec. (b). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1989 AMENDMENT Pub. L. 101–73, title IX, § 907(l), Aug. 9, 1989, 103 Stat. 476, provided that: ‘‘The amendments made by this sec- tion [amending this section and sections 481, 504, 505, 1467a, 1786, 1817, 1818, 1828, 1847, and 1972 of this title] shall apply with respect to conduct engaged in by any person after the date of the enactment of this Act [Aug. 9, 1989], except that the increased maximum civil pen- alties of $5,000 and $25,000 per violation or per day may apply to such conduct engaged in before such date if such conduct— ‘‘(1) is not already subject to a notice (initiating an administrative proceeding) issued by the appropriate Federal banking agency (as defined in section 3(q) of the Federal Deposit Insurance Act [12 U.S.C. 1813(q)]) or the National Credit Union Administration Board; and ‘‘(2) occurred after the completion of the last report of examination of the institution involved by the ap- propriate Federal banking agency (as so defined) oc- curring before the date of the enactment of this Act.’’ EFFECTIVE DATE OF 1978 AMENDMENT Pub. L. 95–630, title I, § 109, Nov. 10, 1978, 92 Stat. 3665, provided that: ‘‘Any amendment made by this title which provides for the imposition of civil penalties [en- acting sections 504 and 505 of this title and amending this section and sections 1464, 1730, 1730a, 1786, 1818, 1828, and 1847 of this title] shall apply only to viola- tions occurring or continuing after the date of its en- actment [Nov. 10, 1978].’’ Executive Documents EXCEPTION AS TO TRANSFER OF FUNCTIONS Functions vested by any provision of law in Comp- troller of the Currency, referred to in this section, not included in transfer of functions to Secretary of the Treasury, see note set out under section 1 of this title. § 93a. Authority to prescribe rules and regula- tions Except to the extent that authority to issue such rules and regulations has been expressly and exclusively granted to another regulatory agency, the Comptroller of the Currency is au- thorized to prescribe rules and regulations to carry out the responsibilities of the office, ex- cept that the authority conferred by this section does not apply to section 36 of this title or to se- curities activities of National Banks under the Act commonly known as the ‘‘Glass-Steagall Act’’. (R.S. § 5239A, as added Pub. L. 96–221, title VII, § 708, Mar. 31, 1980, 94 Stat. 188.) Editorial Notes REFERENCES IN TEXT The Glass-Steagall Act, referred to in text, probably refers to act June 16, 1933, ch. 89, 48 Stat. 162, also known as the Banking Act of 1933 or the Glass-Steagall Act, 1933, rather than to act Feb. 27, 1932, ch. 58, 47 Stat. 56, known as the Glass-Steagall Act, 1932. Section 16 of the 1933 act, which amended section 24 (Seventh) of this title, related in part to securities activities of national banks. For complete classification of these Acts to the Code, see Tables. § 94. Venue of suits Any action or proceeding against a national banking association for which the Federal De- posit Insurance Corporation has been appointed receiver, or against the Federal Deposit Insur- ance Corporation as receiver of such association, shall be brought in the district or territorial court of the United States held within the dis- trict in which that association’s principal place of business is located, or, in the event any State, county, or municipal court has jurisdiction over such an action or proceeding, in such court in the county or city in which that association’s principal place of business is located. (R.S. § 5198; Feb. 18, 1875, ch. 80, § 1, 18 Stat. 320; Mar. 3, 1911, ch. 231, § 291, 36 Stat. 1167; Pub. L. 97–320, title IV, § 406, Oct. 15, 1982, 96 Stat. 1512; Pub. L. 97–457, § 20(a), Jan. 12, 1983, 96 Stat. 2509.) Editorial Notes CODIFICATION The last sentence of R.S. § 5198, as added by act Feb. 18, 1875, ch. 80, § 1, 18 Stat. 320, appears to have been de- rived from act June 3, 1864, ch. 106, § 57, 13 Stat. 116, which was the National Bank Act. See section 38 of this title. Section is comprised of last sentence of R.S. § 5198 as added by act Feb. 18, 1875, ch. 80, § 1, 18 Stat. 320. The