§11601. Enforcement powers of Commissioner

Link to law: http://legislature.vermont.gov/statutes/section/08/201/11601
Published: 2015

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The Vermont Statutes Online



Title

08

:
Banking and Insurance






Chapter

201

:
SUPERVISION; DEFINITIONS






Subchapter

006
:
ENFORCEMENT










 

§

11601. Enforcement powers of Commissioner

(a) The

Commissioner may:

(1) Restrict the

withdrawal of deposits from a Vermont financial institution, a state financial

institution, or a branch of a foreign bank licensed under this title when the Commissioner

finds that extraordinary circumstances make the restriction necessary for the

proper protection of depositors in the affected institution.

(2) Order the

holders of equity interests in a Vermont financial institution or financial

institution regulated under this title to refrain from voting on any matter if

the Commissioner finds that the order is necessary to protect the institution

against reckless, incompetent, or careless management, safeguard the funds of

depositors, or prevent the willful violation of this act or of any lawful order

issued under it, and in such a case the equity interests of such a holder shall

not be counted in determining the existence of a quorum or a percentage of the

outstanding interests necessary to take any action by the financial

institution.

(3) Order any

person to cease violating this title, a lawful regulation or order of the

Commissioner issued under it or to cease engaging in any unsafe or unsound

practice.

(4) Except as

provided in subdivision (5) of this subsection, impose an administrative

penalty of not more than $15,000.00 for each violation of this title, a lawful

regulation or order of the Commissioner issued under it, upon any person:

(A) who

knowingly violates this title or a lawful regulation or order issued under it;

(B) who has

knowingly engaged or participated in any materially unsafe or unsound practice

in connection with a financial institution; or

(C) who has

knowingly committed or engaged in any act, omission, or practice which

constitutes a breach of fiduciary duty to the financial institution, including,

violations of section 14110 of this title.

(5) Impose an

administrative penalty of not more than $1,000.00 per day on any person who

fails without good cause to file any report or other filing under chapters 73,

77, and 200 through 210 of this title when due.

(6) Remove from

a Vermont financial institution or state financial institution regulated under

this title any person:

(A) who

knowingly violates this title or a lawful regulation or order issued under it;

(B) who is

convicted of a crime involving dishonesty;

(C) who has

knowingly engaged or participated in any materially unsafe or unsound practice

in connection with the financial institution; or

(D) who has

knowingly committed or engaged in any act, omission, or practice which

constitutes a breach of fiduciary duty to the financial institution.

(b) In

determining the amount of any administrative penalty assessed pursuant to this

section, the Commissioner shall consider the following factors:

(1) the

appropriateness of the administrative penalty with respect to the financial

resources and good faith of the person or financial institution charged;

(2) the gravity

of the violation or practice;

(3) the history

of previous violations or practices of a similar nature;

(4) the economic

benefit, if any, derived by any person from the violation or practice;

(5) whether the

financial institution has suffered or probably will suffer financial loss or

other damage;

(6) whether the

interest of depositors could be seriously prejudiced by such violation,

practice or breach of fiduciary duty; or

(7) other

factors as justice may require.

(c)(1) Except as

provided in subdivision (2) of this subsection, the Commissioner shall provide

notice of any enforcement order proposed pursuant to this section and the

grounds therefor by mail to the financial institution and to any affected

person. The financial institution or any person so served may, within 30 days

of service on the financial institution, request that a hearing be held by the

Commissioner. If no hearing is requested, the proposed order shall become final

30 days after service on the financial institution. The provisions of 3 V.S.A.

chapter 25 shall govern any hearing held by the Commissioner under this section.

An appeal under this section shall be filed within 30 days of the date of the

Commissioner's decision and shall be to the Washington Superior Court.

(2)

Notwithstanding subdivision (1) of this subsection, the Commissioner may, ex

parte without notice, issue any enforcement order under this section in any

case in which the Commissioner determines such action is necessary to:

(A) conserve the

assets of any financial institution; or

(B) protect the

interests of the depositors.

(d) The hearing

on a removal order shall be private unless the Commissioner determines that a

public hearing is necessary to protect the public interest. If it is deemed

necessary to assure the continued safety and soundness of the financial

institution, the Commissioner may order an immediate suspension of any person

pending completion of further administrative proceedings on his or her removal.

(e) An executive

officer, director, or holder of principal equity interests who fails to comply

with a standard established by subsection 14110(a) of this title shall be

subject to the civil penalties established by 12 U.S.C. sections 504, 505, and

506, as amended, as if he or she had violated Regulation O directly. (Added

1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2013, No. 29, § 17,

eff. May 13, 2013.)
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