12 U.S.C. § 1820 — Administration of Corporation

(a) Board of Directors; use of mails; cooperation with other Federal agencies. The Corporation’s Board of Directors must administer the Corporation’s affairs fairly, impartially, and without discrimination. It decides how the Corporation takes on obligations and allows and pays its expenses. The Corporation may use the United States mail free of charge in the same way as the Government’s executive departments. With the consent of a Federal Reserve bank^* or a federal board, commission, independent agency, executive department, or one of their field offices, the Corporation may use that entity’s information, services, and facilities to carry out this chapter.

(b) Examinations. (1) Appointment of examiners and claims agents. The Board must appoint examiners and claims agents. (2) Regular examinations. An examiner appointed under paragraph (1) may, for the Corporation, examine: (A) an insured State bank^* that is not a member of the Federal Reserve System, or an insured State^* branch of a foreign bank; (B) a depository institution that applies to the Corporation to become insured; and (C) an insured depository institution in default, whenever the Board decides an examination is necessary. (3) Special examination of any insured depository institution. (A) In general. In addition to paragraph (2) examinations, an appointed examiner may, for the Corporation, conduct a special examination of an insured depository institution, a nonbank financial company supervised by the Board of Governors, or a bank holding company described in section 165(a) of the Financial Stability Act of 2010, whenever the Board decides it is necessary. The examination may determine the institution’s condition for insurance purposes. For the nonbank company or bank holding company, it may implement the Corporation’s authority to provide for that company’s orderly liquidation under title II of that Act. This authority may not be used for a company that is in a generally sound condition. (B) Limitation. Before a special examination of such a nonbank company or bank holding company, the Corporation must review any available and acceptable resolution plan the company submitted under section 165(d) of that Act, while recognizing that the plan is nonbinding, and available examination reports. It must coordinate as much as practicable with the Board of Governors to reduce duplicative or conflicting examinations. (4) Examination of affiliates. (A) In general. During an examination under paragraph (2) or (3), an appointed examiner may examine an affiliate^* of a depository institution as needed to fully show (i) the relationship between the institution and the affiliate and (ii) how that relationship affects the institution. (B) Commitment by foreign banks to allow examinations of affiliates. A branch or depository-institution subsidiary of a foreign bank may not become insured unless the foreign bank gives the Board a written, binding promise to allow examinations of the branch or subsidiary’s affiliates under subparagraph (A), to the extent the Board decides is needed to carry out this chapter. (5) Examination of insured State branches. The Board must (A) coordinate examinations of insured State branches of foreign banks with examinations by the Federal Reserve Board under section 3105(c)(1) of this title; and (B), as far as possible, participate in any simultaneous examination of the foreign bank’s United States operations that the Federal Reserve Board requests under that section. (6) Power and duty of examiners. Each appointed examiner (A) may thoroughly examine an insured depository institution or affiliate under paragraphs (2), (3), (4), or (5); and (B) must give the Corporation a full, detailed report on the condition of each examined institution or affiliate. (7) Power of claim agents. Each appointed claims agent may investigate and examine every claim for insured deposits.

(c) Administration of oaths and affirmations; evidence; subpoena powers. In examinations of insured depository institutions, State banks that are not Federal Reserve members, savings associations, other institutions applying for insurance, and their affiliates, or in other investigations of compliance with applicable laws and regulations, the appropriate Federal banking agency^* and its representatives may administer oaths and affirmations. They may examine people and take and preserve sworn testimony about the affairs or ownership of such a bank, institution, or affiliate. They may also use the other powers listed in section 1818(n) of this title.

(d) Annual on-site examinations of all insured depository institutions required. (1) In general. The appropriate Federal banking agency must conduct a full-scope, on-site examination of every insured depository institution at least once in each 12-month period. (2) Examinations by Corporation. This requirement does not apply during a 12-month period in which the Corporation conducts such an examination. (3) State examinations acceptable. The agency may conduct the required examinations in alternating 12-month periods if it decides that a State examination during the intervening period serves this subsection’s purpose. (4) 18-month rule for certain small institutions. Replace “12-month” with “18-month” in paragraphs (1), (2), and (3) if: (A) the institution has less than $6,000,000,000 in total assets; (B) it is “well capitalized^*,” as defined in section 1831o; (C) its latest examination found it well managed and found its composite condition (i) outstanding, or (ii) outstanding or good if its total assets are $200,000,000 or less; (D) it is not currently subject to a formal enforcement proceeding or order by the Corporation or the appropriate Federal banking agency; and (E) no person^* acquired control of it during the 12-month period in which a full-scope, on-site examination would otherwise be required. (5) Certain Government-controlled institutions exempted. Paragraph (1) does not apply to (A) an institution for which the Corporation is conservator; or (B) a bridge depository institution whose voting securities are all owned by the Corporation. (6) Coordinated examinations. To reduce disruption to insured depository institutions: (A) each appropriate Federal banking agency must, as practicable and consistent with safety, soundness, and the public interest, (i) coordinate its examinations of an institution and its affiliates; (ii) coordinate those examinations with other appropriate Federal banking agencies; (iii) work with the appropriate State bank supervisor to coordinate (I) all examinations under this subsection and (II) the number, types, and frequency of reports institutions must submit to the agencies and supervisors, as well as the information required in them; and (iv) use other federal-agency or State-supervisor examination reports to avoid duplicate information requests; and (B) within 2 years after September 23, 1994, the Federal banking agencies must jointly establish and implement a system identifying which federal agency or State supervisor will be the lead agency managing one unified examination of each insured institution and its affiliates, as this subsection requires. (7) Separate examinations permitted. Despite paragraph (6), an agency may conduct a separate examination in an emergency or other exigent circumstance, or when it believes a law may have been violated. (8) Report. When the paragraph (6) system is established, the agencies must jointly report its description to the Senate Banking, Housing, and Urban Affairs Committee and the House Banking, Finance and Urban Affairs Committee. After that, they must report jointly every year on implementation progress and areas where improvements, including legislative improvements, would be appropriate. (9) Standards for determining adequacy of State examinations. The Federal Financial Institutions Examination Council must issue guidelines setting standards that an appropriate Federal banking agency may use when deciding under paragraph (3) whether a State examination is adequate. (10) Agencies authorized to increase maximum asset amount. After the 2-year period beginning September 23, 1994, an agency may by regulation raise paragraph (4)(C)(ii)’s $200,000,000 maximum to an amount no higher than $6,000,000,000 if it decides the higher amount is consistent with safety and soundness.

(e) Examination fees. (1) Regular and special examinations of depository institutions. The Corporation may charge a depository institution or an entity described in section 1813(q)(2) for the cost of a regular or special examination under subsection (b)(2), (b)(3), or (d), to pay the Corporation’s examination expenses. (2) Examination of affiliates. The Corporation may charge each examined affiliate of an insured depository institution for the cost of its subsection (b)(4) examination. (3) Assessment against depository institution if affiliate refuses to pay. (A) If an affiliate refuses a paragraph (2) assessment or does not pay within 60 days after receiving notice, the Corporation may charge and collect that cost from the depository institution, subject to (B). (B) If the affiliate is affiliated with more than one insured depository institution, the Corporation may divide the assessment among those institutions in proportions it considers appropriate. (4) Civil money penalty for affiliate’s refusal to cooperate. (A) If an affiliate refuses to let a Board-appointed examiner conduct an examination, or refuses to provide information that must be disclosed during one, the depository institution must forfeit and pay up to $5,000 for each day the refusal continues. (B) The Corporation assesses and collects that penalty as section 1818(i)(2) provides. (5) Deposits of examination assessment. Money the Corporation receives under this subsection, other than paragraph (4), may be deposited as section 1823 provides.

(f) Preservation of agency records. (1) In general. A Federal banking agency may have any records, papers, or documents it keeps or possesses (A) photographed, microphotographed, or otherwise copied onto film; or (B) preserved in an electronic medium or format that (i) a computer can read or scan and (ii) can reproduce by printing or another form of reproduction of stored electronic data. (2) Treatment as original records. The photographs, film, copies, or electronic reproductions described in paragraph (1) count as original records for every purpose. This includes introducing them as evidence in any State or Federal court or administrative agency. They may prove any recorded act, transaction, occurrence, or event. (3) Authority of the Federal banking agencies. The agency must preserve those copies or reproductions as it directs. It may direct that the original records, papers, or documents be destroyed or otherwise disposed of.

(g) Authority to prescribe regulations and definitions. Unless this chapter gives the authority to another Federal banking agency instead of the Corporation, the Corporation may (1) issue regulations to carry out this chapter; and (2) define terms by regulation as needed to carry it out.

(h) Coordination of examination authority. (1) State bank supervisors of home and host States. (A) Home State of bank. The appropriate State supervisor of an insured State bank’s home State may examine and supervise the bank. (B) Host State branches. The home-State supervisor and each appropriate host-State supervisor must use their respective authority to supervise and examine the bank’s host-State branches according to any applicable cooperative agreement. (C) Supervisory fees. Unless a cooperative agreement expressly says otherwise, only the home-State supervisor may impose or charge State supervisory fees on the bank. (2) Host State examination. (A) In general. For a branch in a host State operated by an out-of-State insured State bank because of an approved interstate merger or because it was established under the listed provisions, the host-State supervisor may (i), after written notice to the home-State supervisor and subject to any cooperative agreement, examine the branch for compliance with host-State laws that apply under section 1831a(j), including community-reinvestment, fair-lending, and consumer^*-protection laws; and (ii), if a cooperative agreement expressly allows it and its terms are followed, or if the home or appropriate Federal supervisor has found the bank to be in “troubled condition,” participate in the home-State supervisor’s examination to determine that the branch operates safely and soundly. (B) Notice of determination. (i) The home-State supervisor must notify every host-State supervisor if there is a final determination that the bank is in “troubled condition.” (ii) It must give notice as soon as reasonably possible, and no later than 15 business days after making the final determination or receiving written notice of it. (3) Host State enforcement. If the host-State supervisor decides the branch violates an applicable host-State law, including a community-reinvestment, fair-lending, or consumer-protection law, the host-State supervisor or, if host-State law allows, a host-State law-enforcement officer may take the enforcement actions and proceedings host-State law would allow if the branch were chartered there. The officer must give written notice to the home-State supervisor and follow any applicable cooperative agreement. (4) Cooperative agreement. (A) Supervisors from two or more States may make cooperative agreements to support State supervision of State banks, including coordinated and joint examinations. (B) For this subsection, a “cooperative agreement” is a written agreement signed by the home-State and host-State supervisors to support State supervision of State banks. It includes nationwide or multi-State agreements and agreements only between a home State and host State. (C) Except for State bank supervisors, this subsection does not limit the authority of home- or host-State law-enforcement officers, regulatory supervisors, or other officials who did not sign such an agreement to enforce applicable host-State laws against a branch of an out-of-State insured State bank in the host State. (5) Federal regulatory authority. This subsection does not limit any Federal banking agency’s authority. (6) State taxation authority not affected. This subsection does not affect a State’s or political subdivision’s authority to adopt, apply, or administer a tax or tax method for a bank, bank holding company, foreign bank, or affiliate, to the extent the tax is otherwise allowed by the United States Constitution or Federal law. (7) Definitions. (A) “Host State,” “home State,” and “out-of-State bank” have the meanings in section 1831u(g). (B) “State supervisory fees” means assessments, examination fees, branch fees, license fees, and every other fee a State bank supervisor charges directly to an insured State bank or its branches. (C) Only for paragraph (2)(B), an insured State bank is in “troubled condition” if (i) its latest examination gives it a composite rating of 4 or 5 under the Uniform Financial Institutions Ratings System; (ii) the Corporation has begun a proceeding to terminate or suspend its deposit insurance; or (iii) the home-State supervisor has begun a proceeding to vacate, revoke, or terminate its charter, liquidate it, or appoint a receiver. (D) For paragraph (2)(B), “final determination” means sending the bank an examination report or official notice of proceedings.

(i) Flood insurance compliance by insured depository institutions. (1) Examinations. During each scheduled on-site examination required by this section, the appropriate Federal banking agency must determine whether the insured institution complies with the national flood insurance program. (2) Report. (A) Requirement. No later than 1 year after September 23, 1994, and every two years after that for the next 4 years, each appropriate Federal banking agency must report to Congress on insured institutions’ compliance with the program. (B) Contents. Each report must describe the methods used to determine compliance; state how many institutions were examined during the reporting year; list and total the institutions found not to comply; describe corrective actions; analyze compliance, including trends, patterns, and problems; and recommend reasonable actions to make examination processes more efficient.

(j) Consultation among examiners. (1) In general. Each appropriate Federal banking agency must take needed action to ensure that its examiners (A) consult about examination activities concerning each depository institution and (B) reach agreement and resolve inconsistencies in recommendations given to the institution because of examinations. (2) Examiner-in-charge. Each agency must consider appointing an examiner-in-charge for an institution to ensure consultation among all of the agency’s examiners involved in examining it.

(k) One-year restrictions on Federal examiners of financial institutions. (1) In general. In addition to other restrictions in title 18, the penalties in paragraph (6) apply to a person who (A) was an officer or employee, including a special Government employee, of a Federal banking agency or Federal Reserve bank; (B) during at least 2 months of the last 12 months of that employment, served as the senior examiner, or functionally equivalent official, for a depository institution or holding company, with continuing broad responsibility for its examination or inspection for the relevant agency or Reserve bank; and (C) knowingly accepts compensation within 1 year after leaving that agency or entity as an employee, officer, director^*, or consultant from (i) that institution, a holding company controlling it, or another company controlling it; or (ii) that holding company or an institution it controls. (2) Definitions. For this subsection, “depository institution” includes an uninsured branch or agency of a foreign bank located in a State. “Depository institution holding company” includes a foreign bank or company described in section 3106(a). (3) Rules of construction. A foreign bank is considered to control each of its branches and agencies. A person is considered a consultant for an institution, holding company, or other company only if the person directly works on matters for or on behalf of that entity. (4) Regulations. (A) Each Federal banking agency must issue rules or regulations to administer this subsection, including rules, regulations, or guidelines defining the people covered by paragraph (1)(B). (B) The agencies must consult to make their rules as consistent, comparable, and practical as possible, while considering differences in their supervisory programs. (5) Waiver. (A) A Federal banking agency may waive this restriction case by case for its officer or employee, including a special Government employee. The Federal Reserve Board may waive it for an officer or employee of a Federal Reserve bank. The head of the agency must certify in writing that the waiver will not harm the integrity of the relevant supervisory program. (B) “Head of an agency” means (i) the Comptroller of the Currency for the Office of the Comptroller of the Currency; (ii) the Federal Reserve Board Chair for the Federal Reserve Board; and (iii) the Corporation’s Board Chair for the Corporation. (6) Penalties. (A) In general. In addition to other available remedies or penalties, if a Federal banking agency decides that a paragraph (1) person has become associated as described in paragraph (1)(C) with an institution, holding company, or other company for which that agency is the appropriate agency, it must impose one or more of these penalties: (i) Industry-wide prohibition order. Under the procedures and limits in section 1818(e)(4) for notices or orders under section 1818(e)(1) or (2), the agency must serve a written notice or order stating its intent (I) to remove the person from office or bar further participation in that entity’s affairs for up to 5 years and (II) to bar the person from participating in any way in the affairs of any insured depository institution for up to 5 years. (ii) Civil monetary penalty. In an administrative proceeding or civil action in the proper United States district court, the agency may impose a civil penalty of up to $250,000. An administrative proceeding must follow section 1818(i). Instead of the agency bringing the civil action, the United States Attorney General may bring it in the proper district court. (B) Scope of prohibition order. A person subject to an order under (A)(i) is subject to paragraphs (6) and (7) of section 1818(e) in the same way and to the same extent as a person subject to an order under that section. (C) Definitions. Only for this paragraph, the appropriate Federal banking agency for a company that is neither a depository institution nor a depository-institution holding company is the Federal banking agency for which the person performed the paragraph (1)(B) functions.