V.S.A. tit. 8, ch. 201, subch. 6 — Enforcement | Vermont Statutes Annotated (through the 2026 session) — Vermont

8 V.S.A. § 11601 Enforcement powers of Commissioner

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.

8 V.S.A. § 11602 Power of Commissioner to impose corrective action

11602. Power of Commissioner to impose corrective action (a) The Commissioner may, in addition to any other power exercisable by the Commissioner under the provisions in this title, require a Vermont financial institution or state financial institution with a branch in this State to: (1) maintain its accounts in accordance with such rules as he or she may prescribe having regard to the size of the organization; (2) observe methods and standards that he or she may prescribe for determining the value of various types of assets; (3) charge off or sell the whole or part of an asset that was acquired in violation of the financial institutions’ investment policy or an order of the Commissioner; (4) write down an asset to its market value; (5) record liens and other interests in property; (6) obtain a financial statement from a borrower to the extent that the financial institution can do so; (7) obtain insurance against damage to real estate taken as security; (8) search, or obtain insurance of, the title to real estate taken as security; and (9) maintain adequate insurance against such other risks as the Commissioner may deem necessary and appropriate for the protection of depositors and the public. (b) Any order of the Commissioner issued under this section shall be subject to subsection 11601(c) of this title. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2021, No. 105 (Adj. Sess.), § 287, eff. July 1, 2022.

8 V.S.A. § 11603 Criminal penalties

11603. Criminal penalties (a) It shall be a criminal offense, punishable by a fine of not more than $1,000.00 or imprisonment of not more than one year, or both, for any person to violate any existing order of the Commissioner or, after receipt of a removal order, or an order assessing a penalty, to perform any duty or exercise any power of or on behalf of any financial institution until the penalty has been satisfied, or otherwise satisfactorily resolved between the parties, or the removal or penalty order is vacated by the Commissioner or by a court of competent jurisdiction. (b) It shall be a criminal offense, punishable by a fine of not more than $10,000.00 or imprisonment of not more than one year, or both, for any person to willfully violate any existing order of the Commissioner or, after receipt of a removal order, or an order assessing a penalty, to willfully perform any duty or exercise any power of or on behalf of any financial institution until the penalty has been satisfied, or otherwise satisfactorily resolved between the parties, or the removal or penalty order is vacated by the Commissioner or by a court of competent jurisdiction. (c) An executive officer, director, or holder of a principal equity interest of a financial institution subject to the laws of this State under this title who, in violation of a standard established by section 14110 of this title, willfully misapplies any of the monies, funds, or credits of such financial institution, or any of the monies, funds, assets, or securities entrusted to the care or custody of such financial institution, or to the care or custody of such executive officer, director, or holder of a principal equity interest, shall be fined not more than $100,000.00 or imprisoned not more than five years, or both. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.

8 V.S.A. § 11604 Indemnification

11604. Indemnification A financial institution shall not indemnify any person for any penalty or fine imposed under this title. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.

8 V.S.A. § 11605 Commissioner’s coordination of enforcement and corrective action with home state

11605. Commissioner’s coordination of enforcement and corrective action with home state The Commissioner shall promptly give notice to the home state supervisory agency of each enforcement or corrective action proposed to be undertaken against a state financial institution and, to the extent practicable, shall consult and cooperate with the home state regulator in pursuing and resolving such enforcement action. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.