§ 26–712. Administrative procedure; cease and desist orders.

(a)(1) If, in the opinion of the Superintendent [Commissioner of the Department of Insurance, Securities, and Banking], a District banking corporation or a director, officer, employee, agent, or other person who participates in the conduct of the affairs of the banking corporation, engages in an unsafe or unsound practice in conducting the business of the bank or violates or is about to violate a law, rule, regulation, written condition imposed by the Superintendent [Commissioner] in connection with the grant of any application or request, or any written agreement entered into with the Superintendent [Commissioner], the Superintendent [Commissioner] may institute an administrative action against the bank or person by the issuance of a Notice of Charges.

(2) If, in the opinion of the Superintendent [Commissioner], a person or a director, officer, employee, agent, or other person who participates in the conduct of the affairs of the person violates or is about to violate a law, rule, regulation, written condition imposed by the Superintendent [Commissioner] in connection with the grant of any application or request, or any written agreement entered into with the Superintendent [Commissioner], the Superintendent [Commissioner] may institute an administrative action against the person by the issuance of a Notice of Charges.

(b) The Notice of Charges shall set forth the basis for the administrative action and shall set a time and place for a hearing to determine whether a cease and desist order shall issue based on the Notice of Charges. The hearing shall be held within 60 days after the service of the Notice of Charges unless another date is set by the hearing officer at the request of 1 of the parties.

(c) In the event of a consent or default or if, upon the record at the hearing, the Superintendent [Commissioner] finds that any violation or practice alleged in the Notice of Charges is established by a preponderance of the evidence, the Superintendent [Commissioner] may issue an order to cease and desist from the violation or practice. The order may require the bank or person or director, officer, employee, agent, or other person who participates in the conduct of the affairs of the bank or person to cease and desist from the violation or practice, and take affirmative action to correct the violation or practice or any condition that results from the violation or practice. The affirmative action may include indemnification, reimbursement, restitution, or any other relief that the Superintendent [Commissioner] deems appropriate.

(d) The cease and desist order shall become effective 30 days after service or, in the case of consent, shall become effective immediately. The order shall remain effective and enforceable unless the order is stayed, modified, terminated, or set aside by the Superintendent [Commissioner] or a reviewing court.

(e) If, in the opinion of the Superintendent [Commissioner], a violation or practice or threatened violation or practice of this subchapter or § 26-103 is likely to cause insolvency, substantial dissipation of the assets or earnings of the bank or person, or serious prejudice to the interests of the depositors or customers of the bank or person, the Superintendent [Commissioner], through the Office of the Corporation Counsel, may:

(1) Petition the court to issue a restraining order to prevent the continuance of the violation or practice or threatened violation or practice, pending completion of the Superintendent’s [Commissioner’s] administrative proceeding;

(2) Petition the court to appoint a receiver with any power or duty that the court may direct to preserve the assets of the corporation or person in accordance with part B of subchapter XII of Chapter 3 of Title 29. Notwithstanding part B of subchapter XII of Chapter 3 of Title 29, a court may appoint a receiver to preserve the assets of a person and shall not be required to liquidate the assets of a corporation or person unless warranted;

(3) Petition the court to freeze or seize the assets of the bank or person consistent with applicable law; or

(4) Petition the court for an order for the involuntary dissolution of a corporation pursuant to part B of subchapter XII of Chapter 3 of Title 29 if the corporation exceeded or abused the authority conferred upon the corporation by Chapter 1, 2, or 3 of Title 29.

(Nov. 23, 1985, D.C. Law 6-63, § 10c; as added Aug. 17, 1991, D.C. Law 9-42, § 2(d), 38 DCR 4981; July 2, 2011, D.C. Law 18-378, § 3(g), 58 DCR 1720.)

Prior Codifications

1981 Ed., § 26-811.

Effect of Amendments

D.C. Law 18-378, in subsec. (e)(2), substituted “part B of subchapter XII of Chapter 3 of Title 29” for “§§ 29-391 and 29-392 (‘Business Corporation Act’)” and “the provisions of §§ 29-391 and 29-392”; and, in subsec. (e)(4), substituted “part B of subchapter XII of Chapter 3 of Title 29 if the corporation exceeded or abused the authority conferred upon the corporation by Chapter 1, 2, or 3 of Title 29” for “§ 29-101.189 if the corporation exceeded or abused the authority conferred upon the corporation by Chapter 1 of Title 29”.

Editor's Notes

Because of the codification of D.C. Law 11-142 as subchapter II of Chapter 8 subchapter II of Chapter 7, 2001 Ed., and designation of the preexisting text as subchapter I, “subchapter” has been substituted for “chapter” in the introductory language of (e).