
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 12USC2264]

 
                       TITLE 12--BANKS AND BANKING
 
                     CHAPTER 23--FARM CREDIT SYSTEM
 
          SUBCHAPTER V--FARM CREDIT ADMINISTRATION ORGANIZATION
 
        Part C--Enforcement Powers of Farm Credit Administration
 
Sec. 2264. Suspension or removal of director or officer


(a) Written notice of intention to remove; violation of law, rule, 
        regulation, or final cease and desist order; unsafe or unsound 
        practice; breach of fiduciary duty

    Whenever, in the opinion of the Farm Credit Administration, any 
director or officer of any institution in the Farm Credit System has 
committed any violation of law, rule, or regulation or of a cease and 
desist order that has become final, or has engaged or participated in 
any unsafe or unsound practice in connection with the institution, or 
has committed or engaged in any act, omission, or practice which 
constitutes a breach of a fiduciary duty as such director or officer, 
and the Farm Credit Administration determines that the institution has 
suffered or will probably suffer substantial financial loss or other 
damage or that the interests of its shareholders or investors in Farm 
Credit System obligations could be seriously prejudiced by reason of 
such violation or practice or breach of fiduciary duty, or that the 
director or officer has received financial gain by reason of such 
violation or practice or breach of fiduciary duty, and that such 
violation or practice or breach of fiduciary duty is one involving 
personal dishonesty on the part of such director or officer, or one that 
demonstrates a willful or continuing disregard for the safety or 
soundness of the System institution, the Farm Credit Administration may 
serve upon such director or officer a written notice of its intention to 
remove him from office.

(b) Written notice of intention to remove or suspend director, officer 
        or other person; personal dishonesty; willful or continuing 
        disregard; unfitness to continue in office or to participate in 
        affairs of institution

    Whenever, in the opinion of the Farm Credit Administration, any 
director or officer of an institution in the Farm Credit System, by 
conduct or practice with respect to another institution in the Farm 
Credit System or other business institution that resulted in substantial 
financial loss or other damage, has evidenced either his personal 
dishonesty or a willful or continuing disregard for its safety and 
soundness and, in addition, has evidenced his unfitness to continue as a 
director or officer, and whenever, in the opinion of the Farm Credit 
Administration, any other person participating in the conduct of the 
affairs of an institution in the Farm Credit System, by the conduct or 
practice with respect to such institution or other institution in the 
Farm Credit System or other business institution that resulted in 
substantial financial loss or other damage, has evidenced either 
personal dishonesty or a willful or continuing disregard for its safety 
and soundness and, in addition, has evidenced his unfitness to 
participate in the conduct of the affairs of such institution, the Farm 
Credit Administration may serve upon such director, officer, or other 
person a written notice of its intention to remove that director, 
officer, or other person from office or to prohibit his further 
participation in any manner in the conduct of the affairs of the 
institution.

(c) Suspension from office; prohibition from further participation in 
        conduct of affairs of institution; service of notice

    In respect to any director or officer of an institution in the Farm 
Credit System or any other person referred to in subsection (a) or (b) 
of this section, the Farm Credit Administration may, if it deems it 
necessary for the protection of the institution or the interests of its 
shareholders and the investors in the Farm Credit System obligations, by 
written notice to such effect served upon such director, officer, or 
other person, suspend such director, officer, or other person from 
office or prohibit such director, officer, or other person from further 
participation in any manner in the conduct of the affairs of the 
institution. Such suspension or prohibition shall become effective upon 
service of such notice and, unless stayed by a court in proceedings 
authorized by subsection (e) of this section, shall remain in effect 
pending the completion of the administrative proceedings pursuant to the 
notice served under subsection (a) or (b) of this section and until such 
time as the Farm Credit Administration shall dismiss the charges 
specified in such notice, or, if an order of removal or prohibition is 
issued against the director or officer or other person, until the 
effective date of any such order. Copies of any such notice shall also 
be served upon the institution of which the person is a director or 
officer or in the conduct of whose affairs the person has participated.

(d) Statement of grounds for removal or prohibition; notice and hearing; 
        order of suspension, removal or prohibition; service of order

    A notice of intention to remove a director, officer, or other person 
from office or to prohibit such director's, officer's, or other person's 
participation in the conduct of the affairs of an institution in the 
Farm Credit System, shall contain a statement of the facts constituting 
grounds therefor, and shall fix a time and place at which a hearing will 
be held thereon. Such hearing shall be fixed for a date not earlier than 
thirty days nor later than sixty days after the date of service of such 
notice, unless an earlier or a later date is set by the Farm Credit 
Administration at the request of (1) such director or officer or other 
person, and for good cause shown, or (2) the Attorney General of the 
United States. Unless such director, officer, or other person shall 
appear at the hearing in person or by a duly authorized representative, 
such director, officer, or other person shall be deemed to have 
consented to the issuance of an order of such removal or prohibition. In 
the event of such consent, or if upon the record made at any such 
hearing the Farm Credit Administration shall find that any of the 
grounds specified in such notice have been established, the Farm Credit 
Administration may issue such orders of suspension or removal from 
office, or prohibition from participation in the conduct of the affairs 
of the institution, as it may deem appropriate. A copy of an order 
issued under this subsection shall be served upon the institution 
concerned. Any such order shall become effective at the expiration of 
thirty days after service upon such institution and the director, 
officer, or other person concerned (except in the case of an order 
issued upon consent, which shall become effective at the time specified 
therein). Such order shall remain effective and enforceable except to 
such extent as it is stayed, modified, terminated, or set aside by 
action of the agency or a reviewing court.

(e) Stay of suspension or prohibition

    Within ten days after any director, officer, or other person has 
been suspended from office or prohibited from participation in the 
conduct of the affairs of a System institution under subsection (c) of 
this section, such director, officer, or other person may apply to the 
United States district court for the judicial district in which the home 
office of the institution is located, or the United States district 
court for the District of Columbia, for a stay of either such suspension 
or prohibition, or both, pending the completion of the administrative 
proceedings pursuant to the notice served upon such director, officer, 
or other person under subsection (a) or (b) of this section, and such 
court shall have jurisdiction to stay either such suspension or 
prohibition, or both.

(Pub. L. 92-181, title V, Sec. 5.28, as added Pub. L. 99-205, title II, 
Sec. 204, Dec. 23, 1985, 99 Stat. 1696; amended Pub. L. 100-233, title 
VIII, Sec. 805(aa), Jan. 6, 1988, 101 Stat. 1717; Pub. L. 100-399, title 
VII, Sec. 702(d), Aug. 17, 1988, 102 Stat. 1006.)


                            Prior Provisions

    A prior section 5.28 of Pub. L. 92-181 was renumbered section 5.42 
and is set out as a note under section 2001 of this title.


                               Amendments

    1988--Subsec. (a). Pub. L. 100-233, Sec. 805(aa)(1), designated 
provisions preceding subsec. (b) as subsec. (a).
    Subsec. (e). Pub. L. 100-399 substituted ``subsection (c)'' for 
``subsection (d)''.
    Pub. L. 100-233, Sec. 805(aa)(2), substituted ``subsection (d) of 
this section'' for ``subsection (d)(3) of this section''.


                    Effective Date of 1988 Amendment

    Amendment by Pub. L. 100-399 effective as if enacted immediately 
after enactment of Pub. L. 100-233, which was approved Jan. 6, 1988, see 
section 1001(a) of Pub. L. 100-399, set out as a note under section 2002 
of this title.


                             Effective Date

    Section effective thirty days after Dec. 23, 1985, see section 401 
of Pub. L. 99-205, set out as an Effective Date of 1985 Amendment note 
under section 2001 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 2265, 2269, 2270 of this 
title.
