12 U.S.C. § 1772d — Forfeiture of organization certificate for money laundering or cash transaction reporting offenses

This section gives the Board^* a process for potentially forfeiting a credit^* union's rights, privileges, and franchise after certain criminal convictions. It requires the Board to consider the involvement of responsible people, existing controls, cooperation, new controls, and effects on the local community.

(a) Forfeiture of franchise for money laundering or cash transaction reporting offenses.

(1) Conviction of title 18 offenses.

(A) Duty to notify. If a credit union is convicted of any criminal offense under section 1956 or 1957 of title 18, the Attorney General must give the Board written notice of the conviction. The notice must include a certified copy of the conviction order from the court that issued the decision.

(B) Notice of termination; pretermination hearing. After receiving the Attorney General's written notice of the conviction, the Board must give the credit union notice that the Board intends to terminate all of the credit union's rights, privileges, and franchises. The Board must also schedule a hearing before termination.

(2) Conviction of title 31 offenses. If a credit union is convicted of any criminal offense under section 5322 or 5324 of title 31 after receiving written notice from the Attorney General, the Board may give the credit union notice that it intends to terminate all of the credit union's rights, privileges, and franchises. The Board may also schedule a hearing before termination.

(3) Judicial review. Section 1786(j) of this title applies to every proceeding under this section. This section does not define “judicial review.”

(b) Factors to be considered. When deciding whether a franchise should be forfeited under subsection (a), the Board must consider the following factors:

(1) The extent to which the credit union's directors, committee members, or senior executive officers knew about, or were involved in, the money-laundering offense for which the credit union was found guilty. “Senior executive officers” is defined by the Board in regulations that the Board must issue; this section does not otherwise define that term.

(2) The extent to which the offense occurred even though the credit union had policies and procedures designed to prevent such an offense.

(3) The extent to which the credit union fully cooperated with law-enforcement authorities in investigating the money-laundering offense for which the credit union was found guilty.

(4) The extent to which, since the offense, the credit union has put additional internal controls in place to prevent another money-laundering offense.

(5) The extent to which forfeiting the franchise would threaten the local community's interest in having adequate deposit and credit services available.

(c) Successor liability. This section does not apply to a successor to the interests of, or a person^* who acquires, a credit union that violated a law described in subsection (a), if the successor succeeded to the violator's interests in good faith or the acquisition was made in good faith. The protection applies only if the succession or acquisition was not made to evade this section or regulations issued under it.