The Vermont Statutes Online

Title 8 : Banking and Insurance

Chapter 201 : Supervision; Definitions

Subchapter 006 : ENFORCEMENT

• § 11601. Enforcement powers of Commissioner

  (a) The Commissioner may:

  (1) Restrict the withdrawal of deposits from a Vermont financial institution, a state financial institution, or a branch of a foreign bank licensed under this title when the Commissioner finds that extraordinary circumstances make the restriction necessary for the proper protection of depositors in the affected institution.

  (2) Order the holders of equity interests in a Vermont financial institution or financial institution regulated under this title to refrain from voting on any matter if the Commissioner finds that the order is necessary to protect the institution against reckless, incompetent, or careless management, safeguard the funds of depositors, or prevent the willful violation of this chapter or of any lawful order issued under it, and in such a case the equity interests of such a holder shall not be counted in determining the existence of a quorum or a percentage of the outstanding interests necessary to take any action by the financial institution.

  (3) Order any person to cease violating this title, a lawful regulation or order of the Commissioner issued under it or to cease engaging in any unsafe or unsound practice.

  (4) Except as provided in subdivision (5) of this subsection, impose an administrative penalty of not more than $15,000.00 for each violation of this title, a lawful regulation or order of the Commissioner issued under it, upon any person:

  (A) who knowingly violates this title or a lawful regulation or order issued under it;

  (B) who has knowingly engaged or participated in any materially unsafe or unsound practice in connection with a financial institution; or

  (C) who has knowingly committed or engaged in any act, omission, or practice that constitutes a breach of fiduciary duty to the financial institution, including violations of section 14110 of this title.

  (5) Impose an administrative penalty of not more than $1,000.00 per day on any person who fails without good cause to file any report or other filing under chapters 73, 77, and 200 through 210 of this title when due.

  (6) Remove from a Vermont financial institution or state financial institution regulated under this title any person:

  (A) who knowingly violates this title or a lawful regulation or order issued under it;

  (B) who is convicted of a crime involving dishonesty;

  (C) who has knowingly engaged or participated in any materially unsafe or unsound practice in connection with the financial institution; or

  (D) who has knowingly committed or engaged in any act, omission, or practice that constitutes a breach of fiduciary duty to the financial institution.

  (7) Revoke the charter of a Vermont financial institution that ceases to exist or ceases to be eligible for a charter.

  (b) In determining the amount of any administrative penalty assessed pursuant to this section, the Commissioner shall consider the following factors:

  (1) the appropriateness of the administrative penalty with respect to the financial resources and good faith of the person or financial institution charged;

  (2) the gravity of the violation or practice;

  (3) the history of previous violations or practices of a similar nature;

  (4) the economic benefit, if any, derived by any person from the violation or practice;

  (5) whether the financial institution has suffered or probably will suffer financial loss or other damage;

  (6) whether the interest of depositors could be seriously prejudiced by such violation, practice, or breach of fiduciary duty; or

  (7) other factors as justice may require.

  (c)(1) Except as provided in subdivision (2) of this subsection, the Commissioner shall provide notice of any enforcement order proposed pursuant to this section and the grounds for the order by mail to the financial institution and to any affected person. The financial institution or any person so served may, within 30 days after service on the financial institution, request that a hearing be held by the Commissioner. If no hearing is requested, the proposed order shall become final 30 days after service on the financial institution. The provisions of 3 V.S.A. chapter 25 shall govern any hearing held by the Commissioner under this section. An appeal under this section shall be filed within 30 days after the date of the Commissioner’s decision and shall be to the Washington Superior Court.

  (2) Notwithstanding subdivision (1) of this subsection, the Commissioner may, ex parte without notice, issue any enforcement order under this section in any case in which the Commissioner determines such action is necessary to:

  (A) conserve the assets of any financial institution; or

  (B) protect the interests of the depositors.

  (d) The hearing on a removal order shall be private unless the Commissioner determines that a public hearing is necessary to protect the public interest. If it is deemed necessary to ensure the continued safety and soundness of the financial institution, the Commissioner may order an immediate suspension of any person pending completion of further administrative proceedings on his or her removal.

  (e) An executive officer, director, or holder of principal equity interests who fails to comply with a standard established by subsection 14110(a) of this title shall be subject to the civil penalties established by 12 U.S.C. sections 504, 505, and 506, as amended, as if he or she had violated Regulation O directly. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2013, No. 29, § 17, eff. May 13, 2013; 2021, No. 105 (Adj. Sess.), § 286, eff. July 1, 2022; 2021, No. 139 (Adj. Sess.), § 4, eff. May 27, 2022.)