
[Code of Federal Regulations]
[Title 12, Volume 1]
[Revised as of January 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR6]

[Page 118-120]
 
                       TITLE 12--BANKS AND BANKING
 
   CHAPTER I--COMPTROLLER OF THE CURRENCY, DEPARTMENT OF THE TREASURY
 
PART 6--PROMPT CORRECTIVE ACTION--Table of Contents
 
Subpart B--Directives To Take Prompt Corrective Action

Sec. 6.20  Scope.

    The rules and procedures set forth in this subpart apply to insured 
national banks, insured federal branches and senior executive officers 
and directors of banks that are subject to the provisions of section 38 
of the Federal Deposit Insurance Act (section 38) and subpart A of this 
part.

Sec. 6.21  Notice of intent to issue a directive.

    (a) Notice of intent to issue a directive--(1) In general. The OCC 
shall provide an undercapitalized, significantly undercapitalized, or 
critically undercapitalized bank prior written notice of the

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OCC's intention to issue a directive requiring such bank or company to 
take actions or to follow proscriptions described in section 38 that are 
within the OCC's discretion to require or impose under section 38 of the 
FDI Act, including section 38 (e)(5), (f)(2), (f)(3), or (f)(5). The 
bank shall have such time to respond to a proposed directive as provided 
under Sec. 6.22.
    (2) Immediate issuance of final directive. If the OCC finds it 
necessary in order to carry out the purposes of section 38 of the FDI 
Act, the OCC may, without providing the notice prescribed in paragraph 
(a)(1) of this section, issue a directive requiring a bank immediately 
to take actions or to follow proscriptions described in section 38 that 
are within the OCC's discretion to require or impose under section 38 of 
the FDI Act, including section 38 (e)(5), (f)(2), (f)(3), or (f)(5). A 
bank that is subject to such an immediately effective directive may 
submit a written appeal of the directive to the OCC. Such an appeal must 
be received by the OCC within 14 calendar days of the issuance of the 
directive, unless the OCC permits a longer period. The OCC shall 
consider any such appeal, if filed in a timely matter, within 60 days of 
receiving the appeal. During such period of review, the directive shall 
remain in effect unless the OCC, in its sole discretion, stays the 
effectiveness of the directive.
    (b) Contents of notice. A notice of intention to issue a directive 
shall include:
    (1) A statement of the bank's capital measures and capital levels;
    (2) A description of the restrictions, prohibitions or affirmative 
actions that the OCC proposes to impose or require;
    (3) The proposed date when such restrictions or prohibitions would 
be effective or the proposed date for completion of such affirmative 
actions; and
    (4) The date by which the bank subject to the directive may file 
with the OCC a written response to the notice.

Sec. 6.22  Response to notice.

    (a) Time for response. A bank may file a written response to a 
notice of intent to issue a directive within the time period set by the 
OCC. The date shall be at least 14 calendar days from the date of the 
notice unless the OCC determines that a shorter period is appropriate in 
light of the financial condition of the bank or other relevant 
circumstances.
    (b) Content of response. The response should include:
    (1) An explanation why the action proposed by the OCC is not an 
appropriate exercise of discretion under section 38;
    (2) Any recommended modification of the proposed directive; and
    (3) Any other relevant information, mitigating circumstances, 
documentation, or other evidence in support of the position of the bank 
regarding the proposed directive.
    (c) Failure to file response. Failure by a bank to file with the 
OCC, within the specified time period, a written response to a proposed 
directive shall constitute a waiver of the opportunity to respond and 
shall constitute consent to the issuance of the directive.

Sec. 6.23  Decision and issuance of a prompt corrective action 
          directive.

    (a) OCC consideration of response. After considering the response, 
the OCC may:
    (1) Issue the directive as proposed or in modified form;
    (2) Determine not to issue the directive and so notify the bank; or
    (3) Seek additional information or clarification of the response 
from the bank, or any other relevant source.
    (b) [Reserved]

Sec. 6.24  Request for modification or rescission of directive.

    Any bank that is subject to a directive under this subpart may, upon 
a change in circumstances, request in writing that the OCC reconsider 
the terms of the directive, and may propose that the directive be 
rescinded or modified. Unless otherwise ordered by the OCC, the 
directive shall continue in place while such request is pending before 
the OCC.

Sec. 6.25  Enforcement of directive.

    (a) Judicial remedies. Whenever a bank fails to comply with a 
directive issued

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under section 38, the OCC may seek enforcement of the directive in the 
appropriate United States district court pursuant to section 8(i)(1) of 
the FDI Act.
    (b) Administrative remedies. Pursuant to section 8(i)(2)(A) of the 
FDI Act, the OCC may assess a civil money penalty against any bank that 
violates or otherwise fails to comply with any final directive issued 
under section 38 and against any institution-affiliated party who 
participates in such violation or noncompliance.
    (c) Other enforcement action. In addition to the actions described 
in paragraphs (a) and (b) of this section, the OCC may seek enforcement 
of the provisions of section 38 or this part through any other judicial 
or administrative proceeding authorized by law.
