12 U.S.C. § 1813(u).14. 12 U.S.C. § 1818(b).15. 12 U.S.C. § 1818(i)(2).16.

ment for group B banks in particular, noting it will "provide the FDIC with an avenue to establish ongoing dialogue with institutions regarding the informational filing's content, including how the information may be considered when vetting potential resolution strategies."Enforcement: The Proposal explicitly states that a CIDI's failure to resubmit a resolution submission to meet FDIC standards or to comply with engagement and capabilities testing may result in the FDIC taking enforcement action. "The FDIC is proposing this provision in order to emphasize that the FDIC expects each CIDI to fully participate in every engagement and capabilities testing exercise and to inform CIDIs of potential consequences for failure to comply with these requirements." Unlike the current rule, the Proposal asserts that "[v]iolating any provision of this section constitutes a violation of a regulation and may subject the CIDI to enforcement actions under Section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818), including paragraph (t) thereunder." 12 U.S.C. 1818 establishes the Federal banking agencies' enforcement powers generally (e.g., cease and desist orders, prohibitions, civil money penalties, etc.) and paragraph (t) refers to the FDIC's "backup" enforcement power with respect to banks for which it is not the primary Federal regulator (i.e., national banks and state member banks).Issues With the ProposalThe Proposal suffers from a number of potential problems, including problems identified by the two FDIC board members who voted against it. First, the Proposal may exceed the FDIC's statutory authority. FDIC Director Jonathan McKernan highlights two areas in which the Proposal may go beyond any statutory mandate: (i) requiring a bank to demonstrate resolution capabilities, rather than merely to provide information; and (ii) constraining the choice of resolution strategies.Second, the Proposal may create additional burdens for banks without countervailing benefits as a matter of policy

company with $10 billion or more in total consolidated assets to include in its bylaws and articles of incorporation (or their equivalents) forward-looking, corporate governance and accountability standards that promote safety and soundness, executive responsiveness to supervisory matters and responsible corporate management. Such standards would include requirements that senior executives (i) respond to federal and state regulators on supervisory matters in a timely manner, (ii) prudently ensure and oversee reporting and/or information systems and (iii) affirm adherence to appropriate long-term risk management objectives tailored to long-term economic conditions.3. Increased Deterrence. The RECOUP Act would make it easier for the federal government to penalize violators of certain civil money provisions of the Federal Deposit Insurance Act (the “FDIA”) by lowering the requisite mens rea, or intent, for certain violations of the FDIA (i.e., third-tier civil money penalties pursuant to 12 U.S.C. § 1818(i)(2)(C)(i)) from “knowingly” to “recklessly” and would increase the maximum per day civil money penalty regulators may assess for such violations from $1 million to $3 million. 12 U.S.C. § 1818(i)(2)(C) currently authorizes the imposition of a third-tier civil money penalty against an insured depository institution which, and/or an institution-affiliated party who, knowingly (i) violates any law or regulation, certain final orders and temporary orders, written conditions imposed by a federal banking agency, or any written agreements between such depository institution and a federal banking agency, (ii) engages in any unsafe or unsound practice in conducting the affairs of such depository institution or (iii) breaches any fiduciary duty, and knowingly or recklessly causes a substantial loss to such depository institution or a substantial pecuniary gain or other benefit to such party by reason of such violation, practice, or breach.The full legislative text of the RECOUP Act can be found here and

The Office of the Comptroller of the Currency (OCC) has revised its civil money penalty (CMP) manual and will begin using the revised manual on January 1, 2023. The manual establishes general policies and procedures for the OCC’s assessment of CMPs.The OCC’s general CMP authority is provided by12 U.S.C. Sec. 1818(i), which classifies CMPs into three tiers based on the severity of the actionable conduct and level of culpability. The statute also sets maximum CMP amounts that the OCC can assess for each day the actionable conduct continues. The OCC uses the manual’s institution CMP matrix and institution-affiliated party (IAP) CMP matrix to quantify the degree of severity of violations, unsafe or unsound practices, or other actionable conduct. The matrices provide for consideration of various statutory factors set forth in 12 U.S.C. Sec. 1818(i)(2)(G) and assessment factors set forth in the 1998 FFIEC Interagency Policy on CMPs.The matrices only apply to the assessment of tier 1 and tier 2 CMPs. They do not apply to the assessment of tier 3 CMPs which, as described in the manual, are assessed “only in the most severe cases that have a substantial impact on the federal banking system.” The OCC describes the matrices as “only guidance” and indicates that “they do not reduce the CMP process to a mathematical equation and are not a substitute for sound supervisory judgment.” The OCC also notes that “[i]n some cases, consistent with the final statutory factor in 12 U.S.C. 1818(i)(2)(G), [‘such other matters as justice may require,’] it may be appropriate to depart from the matrices to reach a fair and equitable result that achieves the agency’s supervisory objectives.”The OCC’s key revisions to the manual consist of the following:The mitigating factors in the institution CMP matrix (Appendix A) are revised to consist of self-identificat

It noted the executives vigorously defended the litigation.The FRB decision then explored the ALJ findings which were primarily based on the Wyoming court’s vacated ruling. It first found that the executives engaged in multiple breaches of their fiduciary duties constituting misconduct under 12 USC 1818(e). It rejected executives’ arguments that only conduct that has both a reasonably direct effect on an association’s financial soundness and places an abnormal risk of financial loss or damage on a banking institution is unsafe or unsound.

The district court granted the FDIC’s motion to dismiss the case for lack of subject matter jurisdiction, and the bank petitioned the Fifth Circuit to review the final orders. On appeal, the Fifth Circuit examined the statutory review scheme under 12 U.S.C. § 1818, which prescribes a detailed framework for regulatory enforcement proceedings and vests exclusive jurisdiction to review final FDIC orders in the federal circuit courts, subject to certain circumstances. Under the implicit preclusion analysis, the panel first found that the plain and preclusive language of 12 U.S.C. § 1818 provides clear and convincing evidence that Congress intended to deny the district court jurisdiction to review and enjoin administrative proceedings as an explicit jurisdictional bar.

The PPM covers the following topics and changes to the September 9, 2011 PPM (“old PPM”):Types of enforcement actions. The PPM lists the types of informal and formal enforcement actions the OCC can take. (Such actions are described more fully in appendices A and B to the PPM.) The PPM clarifies that all nonpublic enforcement actions are considered “informal enforcement actions,” including commitment letters, MOUs, operating agreements, and certain conditions imposed in writing under 12 U.S.C. § 1818. It specifically identified Individual Minimum Capital Ratios (“IMCRs”) and Notices of Deficiency under 12 CFR § 30 as new categories of informal enforcement actions. Similarly, the PPM clarifies which actions constitute “formal enforcement actions.”

The PPM covers the following topics and changes to the September 9, 2011 PPM (“old PPM”):Types of enforcement actions. The PPM lists the types of informal and formal enforcement actions the OCC can take. (Such actions are described more fully in appendices A and B to the PPM.) The PPM clarifies that all nonpublic enforcement actions are considered “informal enforcement actions,” including commitment letters, MOUs, operating agreements, and certain conditions imposed in writing under 12 U.S.C. § 1818. It specifically identified Individual Minimum Capital Ratios (“IMCRs”) and Notices of Deficiency under 12 CFR § 30 as new categories of informal enforcement actions. Similarly, the PPM clarifies which actions constitute “formal enforcement actions.”

Like the SEC, these agencies can seek disgorgement through courts' “inherent equity power to grant relief ancillary to an injunction,”6 but they can also seek disgorgement using their statutory authorities. The Consumer Financial Protection Bureau (CFPB) is expressly authorized by statute to seek disgorgement as a remedy.7 And under 12 U.S.C. § 1818(b), the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation can order institutions subject to cease-and-desist proceedings to take “affirmative action”—including the provision of “restitution” or “reimbursement”—in order to “remedy any conditions resulting from any violation” of the laws these agencies enforce.8 It is not uncommon for agencies to seek such remedies beyond the 5-year limitation in § 2462. Kokesh calls this approach into serious doubt.

Like the SEC, these agencies can seek disgorgement through courts' “inherent equity power to grant relief ancillary to an injunction,”6 but they can also seek disgorgement using their statutory authorities. The Consumer Financial Protection Bureau (CFPB) is expressly authorized by statute to seek disgorgement as a remedy.7 And under 12 U.S.C. § 1818(b), the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation can order institutions subject to cease-and-desist proceedings to take “affirmative action”—including the provision of “restitution” or “reimbursement”—in order to “remedy any conditions resulting from any violation” of the laws these agencies enforce.8 It is not uncommon for agencies to seek such remedies beyond the 5-year limitation in § 2462. Kokesh calls this approach into serious doubt.At a minimum, other agencies will have to distinguish their disgorgement remedies from SEC disgorgement if they hope to get around the limitations period in § 2462.