2009 Rhode Island Code
Title 19 - Financial institutions
CHAPTER 19-4 - Regulatory Oversight
§ 19-4-12 - Order to cease unlawful or unsafe practices – Impairment of capital – Appeal.

SECTION 19-4-12

   § 19-4-12  Order to cease unlawful or unsafe practices – Impairment of capital – Appeal. – (a) Whenever it appears to the director or the director's designee that a regulated institution has violated its agreement to form, or any law or regulation, or is conducting its business in an unauthorized or unsafe manner, or the regulated institution has been notified by its federal deposit insurer of its intent to terminate deposit insurance, the director or the director's designee may exercise any or all of the following powers:

   (1) Restrict the withdrawal of deposits when he or she finds the restriction necessary for the protection of depositors;

   (2) Order any person to cease violating any provision of the banking laws of this state or any rule or regulation issued thereunder, or cease engaging in any unsafe or unsound or deceptive banking or credit union practices;

   (3) Order that capital be restored, to the extent that the capital of the financial institution or credit union has been impaired;

   (4) Suspend or remove any director, committee member, officer, or employee who becomes ineligible to hold his or her position or who, after receipt of an order to cease under this chapter, violates the banking laws of this state or a rule, regulation, or order issued thereunder, or who is reckless or incompetent in the conduct of the financial institution's or credit union's business. Each suspension or removal order shall specify the grounds therefor, and a copy of the order shall be sent to the financial institution or credit union concerned.

   (b) Any action taken pursuant to subsection (a) may be taken in the director's or the director's designee's discretion before or after affording the regulated institution and/or affected individuals an opportunity for hearing. When an action is not preceded by an opportunity for hearing, such an opportunity must be afforded to the regulated institution and/or affected individuals within a reasonable time after the action; provided further, that a request for hearing subsequent to an action by the director or the director's designee shall not act to stay the action of the director or the director's designee pending the outcome of the hearing, although the director or the director's designee may, in his or her discretion, grant a stay.

   (c) Whenever the regulated institution fails to comply with an order of the director or the director's designee, or file required reports, or fails to pay any final judgment recovered against it in any court of this state within sixty (60) days after the rendition of the order, or pay fees or forfeitures, or do any other act required under this title, the superintendent may give notice to the board of bank incorporation and the regulated institution of those failures and may request that the regulated institution's right to do business be suspended. The board of bank incorporation shall hold a hearing within a reasonable time after issuance of the notice, at which time the superintendent and the regulated institution shall have the opportunity to present evidence as to whether the regulated institution's right to do business should or should not be suspended. After the hearing, if it appears to the board of bank incorporation that the regulated institution is in an insolvent condition, or is violating its agreement to form or any law or regulation under this title, or that it is conducting its business in an unsafe, unauthorized, deceptive, or dishonest manner, the board of bank incorporation may give notice to the regulated institution that it is no longer authorized to do business. Any of these regulated institutions not in an insolvent condition may be reauthorized by the board of bank incorporation to resume its business upon complying with the terms and conditions set forth by the board of bank incorporation pursuant to the laws or regulations under this title. Any regulated institution aggrieved by an order of the board of bank incorporation may appeal that order to the superior court pursuant to chapter 35 of title 42.