2005 Idaho Code - 26-1115 — ENGAGING IN UNSAFE OR UNSOUND PRACTICES -- CEASE AND DESIST ORDERS -- INJUNCTION

                                  TITLE  26
                              BANKS AND BANKING
                                  CHAPTER 11
                     SUPERVISION BY DEPARTMENT OF FINANCE
    26-1115.  ENGAGING IN UNSAFE OR UNSOUND PRACTICES -- CEASE AND DESIST
ORDERS -- INJUNCTION. (1) If, in the opinion of the director of the department
of finance, any bank is engaging or has engaged, or the director has
reasonable cause to believe that the bank is about to engage in an unsafe or
unsound practice in conducting the business of such bank, or is violating or
has violated, or the director has reasonable cause to believe that the bank 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 or any written agreement entered into with the director, the
director may issue and serve upon the bank 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.  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.  Unless the bank 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 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 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 of the department of finance shall determine
that the violation or threatened violation or the unsafe or unsound practice
or practices, specified in the notice of charges served upon the bank pursuant
to subsection (a) of this section, or the continuation thereof, is likely to
cause insolvency or substantial dissipation of assets or earnings of the bank,
or is likely to otherwise seriously prejudice the interests of its depositors,
the director may issue a temporary order requiring the bank to cease and
desist from any such violation or practice.  Such order shall become effective
upon service upon the bank and, unless set aside, limited, or suspended by a
court in proceedings, authorized by subsection (b) 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 concerned has been served with a
temporary cease and desist order, the bank may apply to the district court for
the judicial district in which the home office of the bank 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 under
subsection (a) 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 subsection (a) of
this section, the director of the department of finance may apply to the
district court within the jurisdiction of which the home office of the bank 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.