26-509 ENGAGING IN UNSAFE OR UNSOUND PRACTICES -- CEASE AND DESIST ORDERS -- INJUNCTION. - Idaho Statutes

TITLE 26

BANKS AND BANKING

CHAPTER 5

BANK HOLDING COMPANIES

26-509. Engaging in unsafe or unsound practices -- Cease and desist orders -- Injunction. (1) If, in the opinion of the director, any bank holding company is engaging or has engaged, or the director has reasonable cause to believe that the bank holding company is about to engage in an unsafe or unsound practice in conducting the business of such bank holding company or a bank owned or controlled by the bank holding company or is violating or has violated, or the director has reasonable cause to believe that the bank holding company is about to violate a law, rule, or any condition imposed in writing by the director in connection with the granting of any application or other request by the bank holding company or any written agreement entered into with the director, the director may issue and serve upon the bank holding company a notice of charges in respect thereof. The notice shall contain a statement of the facts constituting the alleged violation or violations or the unsafe or unsound practice or practices, and shall fix a time and place at which a hearing will be held to determine whether an order to cease and desist therefrom should issue against the bank holding company. Such hearing shall be fixed for a date not earlier than twenty (20) days nor later than sixty (60) days after service of such notice unless an earlier or a later date is set by the department of finance at the request of the bank holding company. Unless the bank holding company shall appear at the hearing by a duly authorized representative, it shall be deemed to have consented to the issuance of the cease and desist order. In the event of such consent, or if upon the record made at the hearing, the director shall find that any violation or unsafe or unsound practice has occurred or will occur, the director may issue and serve upon the bank holding company an order to cease and desist from any such violation or practice. Such order may, by provisions which may be mandatory or otherwise, require the bank holding company and its directors, officers, employees, and agents to cease and desist from the same and further to take affirmative action to correct the conditions resulting from any such violation or practice.

(2) A cease and desist order shall become effective at the time specified therein and shall remain effective and enforceable as provided therein, except to such extent as it is stayed, modified, terminated, or set aside by action of the director or a reviewing court.

(3) Whenever the director shall determine that the violation or threatened violation or the unsafe unsound practice or practices, specified in the notice of charges served upon the bank holding company pursuant to paragraph (1) of this section, or the continuation thereof, is likely to cause insolvency or substantial dissipation of assets or earnings of a bank owned or controlled by the bank holding company or is likely to otherwise seriously prejudice the interests of such bank’s depositors, the director may issue a temporary order requiring the bank holding company to cease and desist from any such violation or practice. Such order shall become effective upon service upon the bank holding company and, unless set aside, limited, or suspended by a court in proceedings, authorized by paragraph (2) of this section, shall remain effective and enforceable pending the completion of the administrative proceedings pursuant to such notice and until such time as the director shall dismiss the charges specified in such notice, or if a cease and desist order is issued against the bank, until the effective date of any such order.

(4) Within ten (10) days after the bank holding company concerned has been served with a temporary cease and desist order, the bank holding company may apply to the district court for the judicial district in which the home office of the bank holding company is located, for an injunction setting aside, limiting, or suspending the enforcement, operation, or effectiveness of such order pending the completion of the administrative proceedings pursuant to the notice of charges served upon the bank holding company under paragraph (1) of this section, and such court shall have jurisdiction to issue such injunction.

(5) In the case of violation or threatened violation of, or failure to obey, a temporary cease and desist order issued pursuant to paragraph (3) of this section, the director may apply to the district court within the jurisdiction of which the home office of the bank holding company is located, for an injunction to enforce such order, and if the court shall determine that there has been such violation or threatened violation or failure to obey, it shall be the duty of the court to issue an injunction.