Conn. Gen. Stat. § 36a-53

Current with legislation from the 2024 Regular and Special Sessions.

Section 36a-53 - (Formerly Sec. 36-25). Proceedings by commissioner upon violation of banking laws. Civil penalties

(a) As used in this section, (1) "related person" means a director, officer, employee, independent contractor, manager or general partner, and (2) "Connecticut holding company" means a holding company that holds a subsidiary that is a Connecticut bank.

(b)

(1) Whenever the commissioner finds as the result of an investigation that any related person of any Connecticut bank, Connecticut holding company, Connecticut credit union or Connecticut credit union service organization (A) has violated or is violating any provision of the general statutes within the jurisdiction of the commissioner, or any regulation, rule or order adopted or issued thereunder, or any condition imposed in writing by the commissioner, (B) has breached or is breaching any written agreement with the commissioner, (C) has engaged or participated in or is engaging or participating in any unsafe or unsound practice in connection with any bank, Connecticut holding company, Connecticut credit union, federal credit union or credit union service organization, (D) has been or is charged in any information, indictment or complaint with the commission of or participation in a crime which is punishable by imprisonment for a term exceeding one year under state or federal law, and continued service or participation by such related person may pose a threat to the interests of depositors or members, or threatens to impair public confidence in any bank, Connecticut holding company, Connecticut credit union, federal credit union or Connecticut credit union service organization, (E) has used or is using such related person's position in a manner contrary to the interest of any bank, Connecticut holding company, Connecticut credit union, federal credit union or credit union service organization, or its depositors or members, or (F) has been or is negligent in the performance of such related person's duties, after having been warned in writing by the commissioner to discontinue any such continuing delinquency, the commissioner may send notice to such related person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt. The notice shall be deemed received by the related person on the earlier of the date of actual receipt or seven days after mailing or sending. Any such notice shall include:

(i) A statement of the time, place and nature of the hearing;

(ii) a statement of the legal authority and jurisdiction under which the hearing is to be held;

(iii) a reference to the particular sections of the general statutes, regulations, rules or orders alleged to have been violated;

(iv) a short and plain statement of the matters asserted; and

(v) a statement indicating that such related person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice. If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice unless such related person fails to appear at the hearing. After the hearing, if the commissioner finds that any of the grounds set forth in subparagraphs (A) to (F), inclusive, of this subdivision exist with respect to such related person, the commissioner shall order the removal of such related person from office and from any participation in the management of the Connecticut bank, Connecticut holding company, Connecticut credit union or Connecticut credit union service organization. If such related person fails to appear at the hearing, the commissioner shall order the removal of such related person from office and from any participation in the management of the Connecticut bank, Connecticut holding company, Connecticut credit union or Connecticut credit union service organization. If the commissioner finds that the protection of the Connecticut bank, Connecticut holding company or its subsidiary that is a Connecticut bank, Connecticut credit union or Connecticut credit union service organization, or the interest of its depositors, depositors of its subsidiary that is a Connecticut bank or members requires immediate action, the commissioner may suspend any such related person from office and from further participation in the management of the Connecticut bank, Connecticut holding company, Connecticut credit union or Connecticut credit union service organization and require such related person to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this subsection, by incorporating a finding to that effect in such notice. The suspension or prohibition shall become effective upon receipt of such notice and, unless stayed by a court, shall remain in effect until the entry of a permanent order or the dismissal of the matters asserted.

(2) Any related person who has been removed or suspended from office pursuant to an order issued under this subsection may not continue to hold or commence holding office as a related person of any bank, Connecticut credit union, federal credit union, licensee or registrant under this title and title 36b or holding company that holds a subsidiary that is a bank, while such order is in effect, without the written consent of the commissioner.

(c) Whenever it appears to the commissioner that any Connecticut bank, Connecticut holding company, Connecticut credit union, Connecticut credit union service organization or any related person of any such entity (1) is violating, has violated or is about to violate any provision of the general statutes within the jurisdiction of the commissioner, or any regulation, rule or order adopted or issued thereunder, or any condition imposed in writing by the commissioner, (2) is breaching, has breached or is about to breach any written agreement with the commissioner, (3) is engaging, has engaged or is about to engage, in an unsafe or unsound practice, or (4) is using, has used or is about to use such related person's position in a manner contrary to the interest of any bank, Connecticut holding company, Connecticut credit union, federal credit union or credit union service organization, the commissioner may send notice and take action against the Connecticut bank, Connecticut holding company, Connecticut credit union, Connecticut credit union service organization or related person in accordance with section 36a-52. If the commissioner finds that the actual or threatened violation, breach, unsafe or unsound practice or practices or use specified in such notice is likely to cause insolvency or substantial dissipation of assets or earnings of the Connecticut bank, Connecticut holding company, Connecticut credit union or Connecticut credit union service organization, or is likely to otherwise seriously prejudice the interests of its depositors or members, the commissioner may incorporate a finding to that effect in such notice and issue a temporary order requiring the Connecticut bank, Connecticut holding company, Connecticut credit union, Connecticut credit union service organization or related person to cease and desist from any such violation, breach, practice or use and to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this subsection. The temporary order shall become effective upon receipt and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or the dismissal of the matters asserted.

(d)

(1) Whenever the commissioner finds as the result of an investigation that any Connecticut bank, Connecticut holding company, Connecticut credit union, Connecticut credit union service organization or any related person of any such entity has (A) violated any provision of the general statutes within the jurisdiction of the commissioner, or any regulation, rule or order adopted or issued thereunder, or any condition imposed in writing by the commissioner, (B) breached any written agreement with the commissioner, (C) engaged or participated in any unsafe or unsound practice, or (D) used such related person's position in a manner contrary to the interest of any bank, Connecticut holding company, Connecticut credit union, federal credit union or credit union service organization, or its depositors or members, the commissioner may send notice to and take action against such Connecticut bank, Connecticut holding company, Connecticut credit union, Connecticut credit union service organization or related person regarding the violation, breach, unsafe or unsound practice, or misuse of position in accordance with section 36a-50. Any finding made by the commissioner pursuant to this subdivision shall be considered a violation of this subsection for purposes of section 36a-50.

(2) Notwithstanding the provisions of section 36a-50, unless the violation, breach, unsafe or unsound practice, or misuse of position found to have occurred pursuant to this subsection and section 36a-50 is such that it (A) is part of a pattern of misconduct, (B) has caused or is likely to cause a loss other than a de minimis loss to any bank, Connecticut holding company, Connecticut credit union, federal credit union or credit union service organization, (C) will result or has resulted in a pecuniary gain to a related person of any Connecticut bank, Connecticut holding company, Connecticut credit union or Connecticut credit union service organization, or (D) is a violation of sections 36a-53a to 36a-56, inclusive, or sections 36a-746b to 36a-746g, inclusive, the civil penalty the commissioner may impose under this subsection and section 36a-50 shall not exceed ten thousand dollars.

(3) In determining the amount of any penalty imposed under this subsection and section 36a-50, the commissioner shall take into account (A) the size of the financial resources and good faith of the Connecticut bank, Connecticut holding company, Connecticut credit union, Connecticut credit union service organization, or related person, (B) the gravity of the violation, breach, unsafe or unsound practice or misuse of position, (C) the history of previous violations, breaches, unsafe or unsound practices, or misuse of position, and (D) such other matters as justice may require, except that this subdivision does not apply to any violation of section 36a-53a and sections 36a-746b to 36a-746g, inclusive.

(e) In connection with any investigation or proceeding under this section and section 36a-50, the commissioner shall make reasonable efforts to obtain from a federal banking or credit union agency any relevant information that the commissioner knows to be in the possession of such agency.

(f) The resignation, termination of employment or separation, including a separation caused by the closing of the institution, of any related person against whom the commissioner may issue an order under this section, shall not affect the authority of the commissioner to issue any notice and proceed under this section against such related person if such notice is sent before the end of the six-year period beginning on the date of such resignation, termination of employment or separation.

Conn. Gen. Stat. § 36a-53

(1949 Rev., S. 5748; 1967, P.A. 593, S. 1; 1971, P.A. 870, S. 92; P.A. 74-254, S. 1, 2, 11; P.A. 77-141; 77-614, S. 153, 161, 587, 610; P.A. 78-303, S. 85, 136; P.A. 80-482, S. 243, 348; P.A. 87-9, S. 2, 3; P.A. 88-230, S. 1, 12; P.A. 90-98, S. 1, 2; P.A. 92-12, S. 13; P.A. 93-142, S. 4, 7, 8; 93-194, S. 1, 7; P.A. 94-122, S. 29, 340; P.A. 99-158, S. 2; P.A. 01-34, S. 11; 01-48, S.11; P.A. 02-73, S. 4; P.A. 03-259, S. 3; P.A. 05-39, S. 1; P.A. 07-91, S. 15, 16.)

See Secs. 36a-625 et seq. re licensing of business and industrial development corporations.