12 U.S.C. § 92a — Trust powers

Page 50 TITLE 12—BANKS AND BANKING § 92a 1 So in original. Probably should be ‘‘enumerated’’. of section 13 now constitute the ninth to twelfth pars. The ninth par. amended former section 82 of this title, and the tenth to twelfth pars. are classified to sections 361, 92, and 373, respectively, of this title. AMENDMENTS 1982—Pub. L. 97–320 struck out ‘‘; and may also act as the broker or agent for others in making or procuring loans on real estate located within one hundred miles of the place in which said bank may be located, receiv- ing for such services a reasonable fee or commission’’ after ‘‘may act as agent’’ and ‘‘guarantee either the principal or interest of any such loans or’’ after ‘‘shall in any case’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1982 AMENDMENT Amendment by Pub. L. 97–320 effective upon the expi- ration of 180 days after Oct. 15, 1982, see section 403(c) of Pub. L. 97–320, set out as a note under section 371 of this title. MORATORIUM Pub. L. 100–86, title II, § 201(a), (b)(5), Aug. 10, 1987, 101 Stat. 581, 583, provided that, during period beginning Mar. 6, 1987, and ending Mar. 1, 1988, national banks and Federal branches or agencies of foreign banks could not expand their insurance agency activities pursuant to this section into places where they were not conducting such activities as of Mar. 5, 1987. § 92a. Trust powers (a) Authority of Comptroller of the Currency The Comptroller of the Currency shall be au- thorized and empowered to grant by special per- mit to national banks applying therefor, when not in contravention of State or local law, the right to act as trustee, executor, administrator, registrar of stocks and bonds, guardian of es- tates, assignee, receiver, or in any other fidu- ciary capacity in which State banks, trust com- panies, or other corporations which come into competition with national banks are permitted to act under the laws of the State in which the national bank is located. (b) Grant and exercise of powers deemed not in contravention of State or local law Whenever the laws of such State authorize or permit the exercise of any or all of the foregoing powers by State banks, trust companies, or other corporations which compete with national banks, the granting to and the exercise of such powers by national banks shall not be deemed to be in contravention of State or local law within the meaning of this section. (c) Segregation of fiduciary and general assets; separate books and records; access of State banking authorities to reports of examina- tions, books, records, and assets National banks exercising any or all of the powers enumerating 1 in this section shall seg- regate all assets held in any fiduciary capacity from the general assets of the bank and shall keep a separate set of books and records show- ing in proper detail all transactions engaged in under authority of this section. The State bank- ing authorities may have access to reports of ex- amination made by the Comptroller of the Cur- rency insofar as such reports relate to the trust department of such bank, but nothing in this section shall be construed as authorizing the State banking authorities to examine the books, records, and assets of such bank. (d) Prohibited operations; separate investment account; collateral for certain funds used in conduct of business No national bank shall receive in its trust de- partment deposits of current funds subject to check or the deposit of checks, drafts, bills of exchange, or other items for collection or ex- change purposes. Funds deposited or held in trust by the bank awaiting investment shall be carried in a separate account and shall not be used by the bank in the conduct of its business unless it shall first set aside in the trust depart- ment United States bonds or other securities ap- proved by the Comptroller of the Currency. (e) Lien and claim upon bank failure In the event of the failure of such bank the owners of the funds held in trust for investment shall have a lien on the bonds or other securities so set apart in addition to their claim against the estate of the bank. (f) Deposits of securities for protection of private or court trusts; execution of and exemption from bond Whenever the laws of a State require corpora- tions acting in a fiduciary capacity to deposit securities with the State authorities for the pro- tection of private or court trusts, national banks so acting shall be required to make simi- lar deposits and securities so deposited shall be held for the protection of private or court trusts, as provided by the State law. National banks in such cases shall not be required to exe- cute the bond usually required of individuals if State corporations under similar circumstances are exempt from this requirement. National banks shall have power to execute such bond when so required by the laws of the State. (g) Officials’ oath or affidavit In any case in which the laws of a State re- quire that a corporation acting as trustee, ex- ecutor, administrator, or in any capacity speci- fied in this section, shall take an oath or make an affidavit, the president, vice president, cash- ier, or trust officer of such national bank may take the necessary oath or execute the nec- essary affidavit. (h) Loans of trust funds to officers and employ- ees prohibited; penalties It shall be unlawful for any national banking association to lend any officer, director, or em- ployee any funds held in trust under the powers conferred by this section. Any officer, director, or employee making such loan, or to whom such loan is made, may be fined not more than $5,000, or imprisoned not more than five years, or may be both fined and imprisoned, in the discretion of the court. (i) Considerations determinative of grant or de- nial of applications; minimum capital and surplus for issuance of permit In passing upon applications for permission to exercise the powers enumerated in this section, Page 51 TITLE 12—BANKS AND BANKING § 92a 2 So in original. Probably should be ‘‘executor,’’. the Comptroller of the Currency may take into consideration the amount of capital and surplus of the applying bank, whether or not such cap- ital and surplus is sufficient under the cir- cumstances of the case, the needs of the commu- nity to be served, and any other facts and cir- cumstances that seem to him proper, and may grant or refuse the application accordingly: Pro- vided, That no permit shall be issued to any na- tional banking association having a capital and surplus less than the capital and surplus re- quired by State law of State banks, trust compa- nies, and corporations exercising such powers. (j) Surrender of authorization; board resolution; Comptroller certification; activities affected; regulations Any national banking association desiring to surrender its right to exercise the powers grant- ed under this section, in order to relieve itself of the necessity of complying with the require- ments of this section, or to have returned to it any securities which it may have deposited with the State authorities for the protection of pri- vate or court trusts, or for any other purpose, may file with the Comptroller of the Currency a certified copy of a resolution of its board of di- rectors signifying such desire. Upon receipt of such resolution, the Comptroller of the Cur- rency, after satisfying himself that such bank has been relieved in accordance with State law of all duties as trustee, executory,2 adminis- trator, registrar of stocks and bonds, guardian of estates, assignee, receiver, or other fiduciary, under court, private, or other appointments pre- viously accepted under authority of this section, may, in his discretion, issue to such bank a cer- tificate certifying that such bank is no longer authorized to exercise the powers granted by this section. Upon the issuance of such a certifi- cate by the Comptroller of the Currency, such bank (1) shall no longer be subject to the provi- sions of this section or the regulations of the Comptroller of the Currency made pursuant thereto, (2) shall be entitled to have returned to it any securities which it may have deposited with the State authorities for the protection of private or court trusts, and (3) shall not exercise thereafter any of the powers granted by this sec- tion without first applying for and obtaining a new permit to exercise such powers pursuant to the provisions of this section. The Comptroller of the Currency is authorized and empowered to promulgate such regulations as he may deem necessary to enforce compliance with the provi- sions of this section and the proper exercise of the powers granted therein. (k) Revocation; procedures applicable (1) In addition to the authority conferred by other law, if, in the opinion of the Comptroller of the Currency, a national banking association is unlawfully or unsoundly exercising, or has un- lawfully or unsoundly exercised, or has failed for a period of five consecutive years to exercise, the powers granted by this section or otherwise fails or has failed to comply with the require- ments of this section, the Comptroller may issue and serve upon the association a notice of intent to revoke the authority of the association to ex- ercise the powers granted by this section. The notice shall contain a statement of the facts constituting the alleged unlawful or unsound ex- ercise of powers, or failure to exercise powers, or failure to comply, and shall fix a time and place at which a hearing will be held to determine whether an order revoking authority to exercise such powers should issue against the associa- tion. (2) Such hearing shall be conducted in accord- ance with the provisions of section 1818(h) of this title, and subject to judicial review as pro- vided in such section, and 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 later date is set by the Comptroller at the request of any association so served. (3) Unless the association so served shall ap- pear at the hearing by a duly authorized rep- resentative, it shall be deemed to have con- sented to the issuance of the revocation order. In the event of such consent, or if upon the record made at any such hearing, the Comp- troller shall find that any allegation specified in the notice of charges has been established, the Comptroller may issue and serve upon the asso- ciation an order prohibiting it from accepting any new or additional trust accounts and revok- ing authority to exercise any and all powers granted by this section, except that such order shall permit the association to continue to serv- ice all previously accepted trust accounts pend- ing their expeditious divestiture or termination. (4) A revocation order shall become effective not earlier than the expiration of thirty days after service of such order upon the association so served (except in the case of a revocation order issued upon consent, which shall become effective at the time specified therein), and shall remain effective and enforceable, except to such extent as it is stayed, modified, terminated, or set aside by action of the Comptroller or a re- viewing court. (Pub. L. 87–722, § 1, Sept. 28, 1962, 76 Stat. 668; Pub. L. 96–221, title VII, § 704, Mar. 31, 1980, 94 Stat. 187; Pub. L. 112–231, § 2(b)(1), Dec. 28, 2012, 126 Stat. 1619.) Editorial Notes AMENDMENTS 2012—Subsec. (a). Pub. L. 112–231, § 2(b)(1)(A), struck out ‘‘committee of estates of lunatics,’’ before ‘‘or in any other fiduciary capacity’’. Subsec. (j). Pub. L. 112–231, § 2(b)(1)(B), struck out ‘‘committee of estates of lunatics’’ before ‘‘or other fi- duciary, under court, private,’’. 1980—Subsec. (k). Pub. L. 96–221 added subsec. (k). Statutory Notes and Related Subsidiaries SAVINGS PROVISION Pub. L. 87–722, § 2, Sept. 28, 1962, 76 Stat. 669, provided that: ‘‘Nothing contained in this Act [enacting this sec- tion, amending sections 581 and 584(a)(2) of Title 26, and repealing section 248(k) of this title] shall be deemed to affect or curtail the right of any national bank to act in fiduciary capacities under a permit granted before the date of enactment of this Act [Sept. 28, 1962] by the Board of Governors of the Federal Reserve System, nor to affect the validity of any transactions entered into at any time by any national bank pursuant to such per- 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.