9-1807.   Cease and desist orders; institution of proceedings bycommissioner; hearing by board; issuance; temporary orders of commissioner. If the state bank commissioner shall determine that any bank or trustcompany is engaging or has engaged, or the commissioner has reasonablecause to believe that the bank or trust company is about to engage, in anunsafe or unsound practice in conducting the business of such bank or trustcompany, or if the commissioner shall determine that any bank or trustcompany is violating or has violated, or the commissioner has reasonablecause to believe that the bank or trust company is about to violate a law,rule, regulation or order of the commissioner or state banking board, thecommissioner may issue and serve upon the bank or trust company a notice ofcharges in respect thereof. The notice shall contain a statement of thefacts constituting the alleged unsafe or unsound practice or practices orthe alleged violation or violations, and shall state the time and place atwhich a hearing will be held by the board to determine whether an order tocease and desist therefrom should be issued by the board against the bankor trust company. Such hearing shall be fixed for a date not earlier thanthirty (30) days nor later than sixty (60) days after service of suchnotice.

      Unless the bank or trust company shall appear at the hearing by a dulyauthorized representative, it shall be deemed to have consented to theissuance of the cease and desist order. In the event of such consent, or ifupon the record made at any such hearing, the board shall find that anyunsafe or unsound practice or violation specified in the notice of chargeshas been established, the board may issue and serve upon the bank or trustcompany an order to cease and desist from any such practice or violation.Such order may, by provisions which may be mandatory or otherwise, requirethe bank or trust company and its directors, officers, employees and agentsto cease and desist from the same, and, further, to take affirmative actionto correct the conditions resulting from any such practice or violation. Acease and desist order shall become effective at the time specifiedtherein, and shall remain effective and enforceable as provided therein,except to such extent as it is stayed, modified, terminated or set aside byaction of the board.

      Whenever the commissioner shall determine that the unsafe or unsoundpractice or practices or the violation or violations specified in thenotice of charges served upon the bank or trust company, or thecontinuation thereof, is likely to cause insolvency or substantialdissipation of assets or earnings of the bank or trust company, or islikely to otherwise seriously prejudice the interests of its depositors,the commissioner may issue a temporary order requiring the bank or trustcompany to cease and desist from any such practice or practices orviolation or violations. Such order shall be effective upon service thereofupon the bank or trust company, and shall remain effective and enforceablepending the completion of the proceedings pursuant to such notice and untilsuch time as the board shall dismiss the charges specified in such notice,or if a cease and desist order is issued against the bank or trust company,until the effective date of any such order.

      History:   L. 1975, ch. 44, § 1; July 1.