(b) Examinations.
(1) The Board of Directors shall appoint
examiners and claims agents.
(2) Any examiner appointed under paragraph
(1) shall have power, on behalf of the Corporation, to examine—
(A) any insured State nonmember bank or insured State branch of any
foreign bank;
(B)
any savings association, State nonmember bank, or State branch of
a foreign bank, or other depository institution which files an application
with the Corporation to become an insured depository institution;
and
(C) any insured
depository institution in default,
whenever the Board of Directors determines an examination
of any such depository institution is necessary.
(3) (A)
In addition to the examinations authorized under paragraph (2), any
examiner appointed under paragraph (1) shall have power, on behalf
of the Corporation, to make any special examination of any insured
depository institution or nonbank financial company supervised by
the Board of Governors or a bank holding company described in section
165(a) of the Financial Stability Act of 2010, whenever the Board
of Directors determines that a special examination of any such depository
institution is necessary to determine the condition of such depository
institution for insurance purposes, or of such nonbank financial company
supervised by the Board of Governors or bank holding company described
in section 165(a) of the Financial Stability Act of 2010, for the
purpose of implementing its authority to provide for orderly liquidation
of any such company under title II of that Act, provided that such
authority may not be used with respect to any such company that is
in a generally sound condition.
(B) Before conducting a special examination
of a nonbank financial company supervised by the Board of Governors
or a bank holding company described in section 165(a) of the Financial
Stability Act of 2010, the Corporation shall review any available
and acceptable resolution plan that the company has submitted in accordance
with section 165(d) of that Act, consistent with the nonbinding effect
of such plan, and available reports of examination, and shall coordinate
to the maximum extent practicable with the Board of Governors, in
order to minimize duplicative or conflicting examinations.
1-384.1
(4) (A)
In making any examination under paragraph (2) or (3), any examiner
appointed under paragraph (1) shall have power, on behalf of the Corporation,
to make such examinations of the affairs of any affiliate of any depository
institution as may be necessary to disclose fully—
(i) the relationship
between such depository institution and any such affiliate; and
(ii) the effect of such
relationship on the depository institution.
(B) No branch or depository
institution subsidiary of a foreign bank may become an insured depository
institution unless such foreign bank submits a written binding commitment
to the Board of Directors to permit any examination of any affiliate
of such branch or depository institution subsidiary pursuant to subparagraph
(A) to the extent determined by the Board of Directors to be necessary
to carry out the purposes of this Act.
1-384.11
(5) The Board of Directors shall—
(A) coordinate
examinations of insured State branches of foreign banks with examinations
conducted by the Board of Governors of the Federal Reserve System
under section 7(c)(1) of the International Banking Act of 1978; and
(B) to the extent
possible, participate in any simultaneous examination of the United
States operations of a foreign bank requested by the Board under such
section.
1-384.2
(6) Each
examiner appointed under paragraph (1) shall—
(A) have
power to make a thorough examination of any insured depository institution
or affiliate under paragraph (2), (3), (4), or (5); and
(B) shall make a full and
detailed report of condition of any insured depository institution
or affiliate examined to the Corporation.
(7) Each claim agent appointed
under paragraph (1) shall have power to investigate and examine all
claims for insured deposits.
[12 USC 1820(b). As
amended by acts of Oct. 16, 1966 (80 Stat. 1053); Dec. 31, 1970 (84
Stat. 1811); Nov. 10, 1978 (92 Stat. 3677); Oct. 15, 1982 (96 Stat.
1474); Aug. 9, 1989 (103 Stat. 217); Dec. 19, 1991 (105 Stat. 2248,
2292); Sept. 23, 1994 (108 Stat. 2289); Oct. 30, 2004 (118 Stat. 2231);
and July 21, 2010 (124 Stat. 1438-1439).]
1-385
(c) Oaths and affirmations; evidence; subpena powers. In connection with examinations of insured banks, and any State
nonmember bank, savings association, or other institution making application
to become insured banks, and affiliates thereof, or with other types
of investigations to determine compliance with applicable law and
regulations, the appropriate Federal banking agency, or its designated
representatives, are authorized to administer oaths and affirmations,
and to examine and to take and preserve testimony under oath as to
any matter in respect to the affairs or ownership of any such bank
or institution or affiliate thereof, and to exercise such other powers
as are set forth in section 8(n) of this Act.
[12 USC 1820(c). As
amended by acts of Oct. 16, 1966 (80 Stat. 1053); Dec. 31, 1970 (84
Stat. 1811); Nov. 10, 1978 (92 Stat. 3677); and Aug. 9, 1989 (103
Stat. 218).]
1-385.01
(d) Annual
on-site examinations of all insured depository institutions required.
(1) The appropriate Federal
banking agency shall, not less than once during each 12-month period,
conduct a full-scope, on-site examination of each insured depository
institution.
(2) Paragraph
(1) shall not apply during any 12-month period in which the Corporation
has conducted a full-scope, on-site examination of the insured depository
institution.
(3) The
examinations required by paragraph (1) may be conducted in alternate
12-month periods, as appropriate, if the appropriate Federal banking
agency determines that an examination of the insured depository institution
conducted by the State during the intervening 12-month period carries
out the purpose of this subsection.
1-385.02
(4) Paragraphs (1), (2), and (3) shall
apply with “18-month” substituted for “12-month” if—
(A) the insured depository
institution has total assets of less than $3,000,000,000;
(B) the institution is
well capitalized, as defined in section 38;
(C) when the institution was most recently
examined, it was found to be well managed, and its composite condition—
(i) was found to be outstanding; or
(ii) was found to be outstanding or good, in the case of an insured
depository institution that has total assets of not more than $200,000,000;
(D)
the insured institution is not currently subject to a formal enforcement
proceeding or order by the Corporation or the appropriate Federal
banking agency; and
(E) no person acquired control of the institution during the 12-month
period in which a full-scope, on-site examination would be required
but for this paragraph.
(5) Paragraph (1) does not apply to—
(A) any institution for which the Corporation is conservator; or
(B) any bridge depository
institution, none of the voting securities of which are owned by a
person or agency other than the Corporation.
1-385.03
(6) To minimize the disruptive effects
of examinations on the operations of insured depository institutions—
(A) each appropriate Federal banking agency shall, to the extent
practicable and consistent with principles of safety and soundness
and the public interest—
(i) coordinate examinations to be conducted
by that agency at an insured depository institution and its affiliates;
(ii) coordinate with the
other appropriate Federal banking agencies in the conduct of such
examinations;
(iii) work
to coordinate with the appropriate State bank supervisor—
(I) the conduct of all examinations made
pursuant to this subsection; and
(II) the number, types, and frequency of
reports required to be submitted to such agencies and supervisors
by insured depository institutions, and the type and amount of information
required to be included in such reports; and
(iv) use copies of reports of
examinations of insured depository institutions made by any other
Federal banking agency or appropriate State bank supervisor to eliminate
duplicative requests for information; and
(B) not later than 2 years
after the date of enactment of the Riegle Community Development and
Regulatory Improvement Act of 1994, the Federal banking agencies shall
jointly establish and implement a system for determining which one
of the Federal banking agencies or State bank supervisors shall be
the lead agency responsible for managing a unified examination of
each insured depository institution and its affiliates, as required
by this subsection.
1-385.04
(7) Notwithstanding paragraph (6), each
appropriate Federal banking agency may conduct a separate examination
in an emergency or under other exigent circumstances, or when the
agency believes that a violation of law may have occurred.
(8) At the time the system
provided for in paragraph (6) is established, the Federal banking
agencies shall submit a joint report describing the system to the
Committee on Banking, Housing, and Urban Affairs of the Senate and
the Committee on Banking, Finance and Urban Affairs of the House of
Representatives. Thereafter, the Federal banking agencies shall annually
submit a joint report to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Banking, Finance and Urban
Affairs of the House of Representatives regarding the progress of
the agencies in implementing the system and indicating areas in which
enhancements to the system, including legislature improvements, would
be appropriate.
1-385.05
(9) The
Federal Financial Institutions Examination Council shall issue guidelines
establishing standards to be used at the discretion of the appropriate
Federal banking agency for purposes of making a determination under
paragraph (3).
(10) At any time
after the end of the 2-year period beginning on the date of enactment
of the Riegle Community Development and Regulatory Improvement Act
of 1994, the appropriate Federal banking agency, in the agency’s discretion,
may increase the maximum amount limitation contained in paragraph
(4)(C)(ii), by regulation, from $200,000,000 to an amount not to exceed
$3,000,000,000 for purposes of such paragraph, if the agency determines
that the greater amount would be consistent with the principles of
safety and soundness for insured depository institutions.
[12 USC 1820(d). As added by act of Dec. 19, 1991 (105 Stat.
2240) and amended by acts of Oct. 28, 1992 (106 Stat.
4078); Sept. 23, 1994 (108 Stat. 2216, 2217, 2242); Sept. 30, 1996
(110 Stat. 3009-414, 419); Oct. 13, 2006 (120 Stat. 1981); Jan. 11,
2007 (120 Stat. 3561); July 30, 2008 (122 Stat. 2829); July 21, 2010
(124 Stat. 1552); Dec. 4, 2015 (129 Stat. 1796); and May 24, 2018
(132 Stat. 1316).]
1-385.051
(f) Preservation of agency
records.
(1) A Federal banking agency may cause
any and all records, papers, or documents kept by the agency or in
the possession or custody of the agency to be—
(A) photographed
or microphotographed or otherwise reproduced upon film; or
(B) preserved in any electronic
medium or format which is capable of--
(i) being read or scanned
by computer; and
(ii) being
reproduced from such electronic medium or format by printing any other
form of reproduction of electronically stored data.
(2) Any photographs,
microphotographs, or photographic film or copies thereof described
in paragraph (l)(A) or reproduction of electronically stored data
described in paragraph (l)(B) shall be deemed to be an original record
for all purposes, including introduction in evidence in all State
and Federal courts or administrative agencies, and shall be admissible
to prove any act, transaction, occurrence, or event therein recorded.
(3) Any photographs, microphotographs,
or photographic film or copies thereof described in paragraph (l)(A)
or reproduction of electronically stored data described in paragraph
(l)(B) shall be preserved in such manner as the Federal banking agency
shall prescribe, and the original records, papers, or documents may
be destroyed or otherwise disposed of as the Federal banking agency
may direct.
[12 USC 1820(f). As
amended by act of Oct. 13, 2006 (120 Stat. 2000).]
1-385.06
(h) Coordination of examination
authority.
(1) (A) The appropriate
State bank supervisor of the home State of an insured State bank has
authority to examine and supervise the bank.
(B) The State bank supervisor of the
home State of an insured State bank and any State bank supervisor
of an appropriate host State shall exercise its respective authority
to supervise and examine the branches of the bank in a host State
in accordance with the terms of any applicable cooperative agreement
between the home State bank supervisor and the State bank supervisor
of the relevant host State.
(C) Except as expressly provided in
a cooperative agreement between the State bank supervisors of the
home State and any host State of an insured State bank, only the State
bank supervisor of the home State of an insured State bank may levy
or charge State supervisory fees on the bank.
(2) (A)
With respect to a branch operated in a host State by an out-of-State
insured State bank that resulted from an interstate merger transaction
approved under section 44, or that was established in such State pursuant
to section 5155(g) of the Revised Statutes of the United States, the
third undesignated paragraph of section 9 of the Federal Reserve Act
or section 18(d)(4) of this Act, the appropriate State bank supervisor
of such host State may—
(i) with written notice to the State bank
supervisor of the bank’s home State and subject to the terms of any
applicable cooperative agreement with the State bank supervisor of
such home State, examine such branch for the purpose of determining
compliance with host State laws that are applicable pursuant to section
24(j), including those that govern community reinvestment, fair lending,
and consumer protection; and
(ii) if expressly permitted under and subject to the terms of a cooperative
agreement with the State bank supervisor of the bank’s home State
or if such out-of-State insured State bank has been determined to
be in a troubled condition by either the State bank supervisor
of the bank’s home State or the bank’s appropriate Federal banking
agency, participate in the examination of the bank by the State bank
supervisor of the bank’s home State to ascertain that the activities
of the branch in such host State are not conducted in an unsafe or
unsound manner.
(B) (i) The State bank supervisor
of the home State of an insured State bank shall notify the State
bank supervisor of each host State of the bank if there has been a
final determination that the bank is in a troubled condition.
(ii) The State bank supervisor
of the home State of an insured State bank shall provide notice under
clause (i) as soon as is reasonably possible, but in all cases not
later than 15 business days after the date on which the State bank
supervisor has made such final determination or has received written
notification of such final determination.
1-385.061
(3) If the State bank supervisor
of a host State determines that a branch of an out-of- State insured
State bank is violating any law of the host State that is applicable
to such branch pursuant to section 24(j), including a law that governs
community reinvestment, fair lending, or consumer protection, the
State bank supervisor of the host State or, to the extent authorized
by the law of the host State, a host State law enforcement officer
may, with written notice to the State bank supervisor of the bank’s
home State and subject to the terms of any applicable cooperative
agreement with the State bank supervisor of the bank’s home State,
undertake such enforcement actions and proceedings as would be permitted
under the law of the host State as if the branch were a bank chartered
by that host State.
(4) (A) The State bank supervisors
from 2 or more States may enter into cooperative agreements to facilitate
State regulatory supervision of State banks, including cooperative
agreements relating to the coordination of examinations and joint
participation in examinations.
(B) For purposes of this subsection,
the term “cooperative agreement” means a written agreement that is
signed by the home State bank supervisor and the host State bank supervisor
to facilitate State regulatory supervision of State banks, and includes
nationwide or multi-State cooperative agreements and cooperative agreements
solely between the home State and host State.
(C) Except for State bank supervisors,
no provision of this subsection relating to such cooperative agreements
shall be construed as limiting in any way the authority of home State
and host State law enforcement officers, regulatory supervisors, or
other officials that have not signed such cooperative agreements to
enforce host State laws that are applicable to a branch of an out-of-State
insured State bank located in the host State pursuant to section 24(j).
(5) No provision
of this subsection shall be construed as limiting in any way the authority
of any Federal banking agency.
(6) No provision of this subsection shall
be construed as affecting the authority of any State or political
subdivision of any State to adopt, apply, or administer any tax or
method of taxation to any bank, bank holding company, or foreign bank,
or any affiliate of any bank, bank holding company, or foreign bank,
to the extent that such tax or tax method is otherwise permissible
by or under the Constitution of the United States or other Federal
law.
1-385.062
(7) For purpose of this
section, the following definitions shall apply:
(A) The
terms “host State”, “home State”, and “out-of-State bank” have the
same meanings as in section 44(g).
(B) The term “State supervisory fees”
means assessments, examination fees, branch fees, license fees, and
all other fees that are levied or charged by a State bank supervisor
directly upon an insured State bank or upon branches of an insured
State bank.
(C) Solely
for purposes of paragraph (2)(B), an insured State bank has been determined
to be in “troubled condition” if the bank—
(i) has a composite rating,
as determined in its most recent report of examination, of 4 or 5
under the Uniform Financial Institutions Ratings System;
(ii) is subject to a proceeding
initiated by the Corporation for termination or suspension of deposit
insurance; or
(iii) is
subject to a proceeding initiated by the State bank supervisor of
the bank’s home State to vacate, revoke, or terminate the charter
of the bank, or to liquidate the bank, or to appoint a receiver for
the bank.
(D) For purposes of paragraph (2)(B),
the term ″final determination″ means the transmittal of a report of
examination to the bank or transmittal of official notice of proceedings
to the bank.
[12 USC 1820(h). As
added by act of Sept. 29, 1994 (108 Stat. 2357) and amended by act
of Oct. 13, 2006 (120 Stat. 1991).]
1-385.07
(i) Flood insurance compliance by insured depository
institutions.
(1) The appropriate Federal banking agency
shall, during each scheduled on-site examination required by this
section, determine whether the insured depository institution is complying
with the requirements of the national flood insurance program.
(2) (A) Not later than 1 year after
September 23, 1994, and biennially thereafter for the next 4 years,
each appropriate Federal banking agency shall submit a report to the
Congress on compliance by insured depository institutions with the
requirements of the national flood insurance program.
(B) Each report submitted
under this paragraph shall include a description of the methods used
to determine compliance, the number of institutions examined during
the reporting year, a listing and total number of institutions found
not to be in compliance, actions taken to correct incidents of noncompliance,
and an analysis of compliance, including a discussion of any trends,
patterns, and problems, and recommendations regarding reasonable actions
to improve the efficiency of the examinations processes.
[12
USC 1820(i). As added by act of September 23, 1994 (108 Stat. 2266).]
1-385.08
(j) Consultation among
examiners.
(1) Each appropriate Federal banking agency
shall take such action as may be necessary to ensure that examiners
employed by the agency—
(A) consult on examination activities
with respect to any depository institution; and
(B) achieve an agreement and resolve
any inconsistencies in the recommendations to be given to such institution
as a consequence of any examinations.
(2) Each appropriate Federal banking agency
shall consider appointing an examiner-in-charge with respect to a
depository institution to ensure consultation on examination activities
among all of the examiners of that agency involved in examinations
of the institution.
[12 USC 1820(j). As
added by act of Sept. 30, 1996 (110 Stat. 3009-419).]
1-385.09
(k) One-year restrictions on federal examiners
of financial institutions.
(1) In addition to other applicable restrictions
set forth in title 18, United States Code, the penalties set forth
in paragraph (6) of this subsection shall apply to any person who—
(A) was an officer or employee (including any special Government
employee) of a Federal banking agency or a Federal reserve bank;
(B) served 2 or more
months during the final 12 months of his or her employment with such
agency or entity as the senior examiner (or a functionally equivalent
position) of a depository institution or depository institution holding company
with continuing, broad responsibility for the examination (or inspection)
of that depository institution or depository institution holding company
on behalf of the relevant agency or Federal reserve bank; and
(C) within 1 year after
the termination date of his or her service or employment with such
agency or entity, knowingly accepts compensation as an employee, officer,
director, or consultant from—
(i) such depository institution,
any depository institution holding company that controls such depository
institution, or any other company that controls such depository institution;
or
(ii) such depository
institution holding company or any depository institution that is
controlled by such depository institution holding company.
(2) For purposes
of this subsection—
(A) the term “depository institution”
includes an uninsured branch or agency of a foreign bank, if such
branch or agency is located in any State; and
(B) the term “depository institution
holding company” includes any foreign bank or company described in
section 8(a) of the International Banking Act of 1978.
(3) For purposes of this
subsection, a foreign bank shall be deemed to control any branch or
agency of the foreign bank, and a person shall be deemed to act as
a consultant for a depository institution, depository institution
holding company, or other company, only if such person directly works
on matters for, or on behalf of, such depository institution, depository
institution holding company, or other company.
(4) (A)
Each Federal banking agency shall prescribe rules or regulations to
administer and carry out this subsection, including rules, regulations,
or guidelines to define the scope of persons referred to in paragraph
(1)(B).
(B) The
Federal banking agencies shall consult with each other for the purpose
of assuring that the rules and regulations issued by the agencies
under subparagraph (A) are, to the extent possible, consistent, comparable,
and practicable, taking into account any differences in the supervisory
programs utilized by the agencies for the supervision of depository
institutions and depository institution holding companies.
(5) (A) A Federal banking agency
may grant a waiver, on a case by case basis, of the restriction imposed
by this subsection to any officer or employee (including any special
Government employee) of that agency, and the Board of Governors of
the Federal Reserve System may grant a waiver of the restriction imposed
by this subsection to any officer or employee of a Federal reserve
bank, if the head of such agency certifies in writing that granting
the waiver would not affect the integrity of the supervisory program
of the relevant Federal banking agency.
(B) For purposes of this paragraph,
the head of an agency is—
(i) the Comptroller of the Currency, in the
case of the Office of the Comptroller of the Currency;
(ii) the Chairman of the Board
of Governors of the Federal Reserve System, in the case of the Board
of Governors of the Federal Reserve System; and
(iii) the Chairperson of the Board of Directors,
in the case of the Corporation.
1-385.091
(6) (A)
In addition to any other administrative, civil, or criminal remedy
or penalty that may otherwise apply, whenever a Federal banking agency
determines that a person subject to paragraph (1) has become associated,
in the manner described in paragraph (1)(C), with a depository institution,
depository institution holding company, or other company for which
such agency serves as the appropriate Federal banking agency, the
agency shall impose upon such person one or more of the following
penalties:
(i) The Federal banking agency shall serve
a written notice or order in accordance with and subject to the provisions
of section 8(e)(4) for written notices or orders under paragraph (1)
or (2) of section 8(e), upon such person of the intention of the agency—
(I) to remove such person from office or
to prohibit such person from further participation in the conduct
of the affairs of the depository institution, depository institution
holding company, or other company for a period of up to 5 years; and
(II) to prohibit any further
participation by such person, in any manner, in the conduct of the
affairs of any insured depository institution for a period of up to
5 years.
(ii) The Federal banking agency may, in an administrative proceeding
or civil action in an appropriate United States district court, impose
on such person a civil monetary penalty of not more than $250,000.
Any administrative proceeding under this clause shall be conducted
in accordance with section 8(i). In lieu of an action by the Federal
banking agency under this clause, the Attorney General of the United
States may bring a civil action under this clause in the appropriate
United States district court.
(B) Any person subject to an order issued
under subparagraph (A)(i) shall be subject to paragraphs (6) and (7)
of section 8(e) in the same manner and to the same extent as a person
subject to an order issued under such section.
(C) Solely for purposes of this paragraph,
the “appropriate Federal banking agency” for a company that is not
a depository institution or depository institution holding company
shall be the Federal banking agency on whose behalf the person described
in paragraph (1) performed the functions described in paragraph (1)(B).
[12 USC 1820(k). As
added by act of Dec. 17, 2004 (118 Stat. 3751) and amended by act
of July 21, 2010 (124 Stat. 1552).]
