State Codes and Statutes
Statutes > Utah > Title-07 > Chapter-02 > 7-2-17-2-1. Supervisory actions by commissioner -- Grounds -- Mergers or acquisitionsauthorized by commissioner -- Possession of business and property taken by commissioner.
(1) An institution under the jurisdiction of the department is subject to supervisory actionsby the commissioner under this chapter or Chapter 19 if the commissioner, with or without anadministrative hearing, finds that:
(a) the institution is not in a safe and sound condition to transact its business;
(b) an officer of the institution or other person has refused to be examined or has madefalse statements under oath regarding its affairs;
(c) the institution or other person has violated its articles of incorporation or any law, rule,or regulation governing the institution or other person;
(d) the institution or other person is conducting its business in an unauthorized or unsafemanner, or is practicing deception upon its depositors, members, or the public, or is engaging inconduct injurious to its depositors, members, or the public;
(e) the institution or other person has been notified by its primary account insurer of theinsurer's intention to initiate proceedings to terminate insurance;
(f) the institution or other person has failed to maintain a minimum amount of capital asrequired by the department, any state, or the relevant federal regulatory agency;
(g) the institution or other person is a depository institution that has failed or refused topay its depositors in accordance with the terms under which the deposits were received, or has oris about to become insolvent;
(h) the institution or other person or its officers or directors have failed or refused tocomply with the terms of a legally authorized order issued by the commissioner or by any federalauthority or authority of another state having jurisdiction over the institution or other person;
(i) the institution or other person or its officers or directors have failed or refused, uponproper demand, to submit its records, books, papers, and affairs for inspection to thecommissioner or to a supervisor or an examiner of the department;
(j) the institution or other person or its officers or directors, after 30 days written notice,have failed to comply with or have continued to violate this title or any rule or regulation of thedepartment issued under it;
(k) any person who controls the institution or other person subject to the jurisdiction ofthe department has used the control to cause the institution or other person to be or about to be inan unsafe or unsound condition, to conduct its business in an unauthorized or unsafe manner, or toviolate this title or any rule or regulation of the department issued under it; or
(l) the remedies provided in Section 7-1-307, 7-1-308, or 7-1-313 are ineffective orimpracticable to protect the interest of depositors, creditors, or members of the institution or otherperson, or to protect the interests of the public.
(2) The commissioner may take any action described in Subsection (3) if:
(a) he finds that:
(i) any of the conditions set forth in Subsection (1) exist with respect to an institutionunder the jurisdiction of the department; and
(ii) an order issued pursuant to Section 7-1-307, 7-1-308, or 7-1-313 would notadequately protect the interests of the institution's depositors, creditors, members, or otherinterested persons from all dangers presented by the conditions found to exist; or
(b) two-thirds of the voting shares of an institution under the jurisdiction of thedepartment that are eligible to be voted at any regular or special meeting of the shareholders of
the institution are voted at the meeting in favor of a resolution consenting to the commissionertaking or causing to be taken any of the actions described below.
(3) After making the requisite findings or receiving the consenting vote of shareholdersunder Subsection (2), the commissioner may:
(a) without taking possession of the institution, authorize, or by order require or giveeffect to the acquisition of control of, the merger with, the acquisition of all or a portion of theassets of, or the assumption of all or a portion of the liabilities of the institution or other person byany other institution or entity approved or designated by the commissioner in accordance withChapter 19; or
(b) take possession of the institution or other person subject to the jurisdiction of thedepartment with or without a court order if an acquisition of control of, a merger with, anacquisition of all or a portion of the assets of, or an assumption of all or a portion of the liabilitiesof the institution or other person without taking possession does not appear to the commissionerto be practicable.
(4) Upon taking possession of an institution or the person, the commissioner is vested byoperation of law with the title to and the right to possession of all assets, the business, andproperty of the institution or other person subject to court order made under Section 7-2-3. Whilein possession of an institution or other person, the commissioner or any receiver or liquidatorappointed by him may exercise any or all of the rights, powers, and authorities granted to thecommissioner under this chapter, or may give effect to the acquisition of control of, the mergerwith, the acquisition of all or a portion of the assets of, or the assumption of all or a portion of theliabilities of an institution or other person subject to the jurisdiction of the department, under theprovisions of Chapter 19.
(5) An action of the commissioner under this section may only be enjoined or set asideupon a finding, after notice and hearing, that the action is arbitrary, capricious, an abuse ofdiscretion, or otherwise contrary to law.
Amended by Chapter 200, 1994 General Session
