§ 524.228 — Emergency cease and desist order — final order — suspension

Iowa § 524.228

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 524: BANKS

Text

1. If it appears to the superintendent that a state bank, or any director, officer, employee,
or substantial shareholder of the state bank is engaging in or is about to engage in an unsafe
or unsound practice or dishonest act in conducting the business of the state bank that is
likely to cause insolvency or substantial dissipation of assets or earnings of the state bank, or
is likely to seriously weaken the condition of the state bank or otherwise seriously prejudice
the interests of its depositors prior to the completion of the proceedings conducted pursuant
to section 524.223, 524.606, subsection 2, or 524.707, subsection 2, the superintendent
may issue an emergency order requiring the state bank, director, officer, employee, or
substantial shareholder to cease and desist from any such practice or act, and to take
affirmative action, including suspension of the director, officer, or employee to prevent such
insolvency, dissipation, condition, or prejudice pending completion of the proceedings. The
emergency order becomes effective upon service upon the state bank, or upon the director,
officer, employee, or substantial shareholder of the state bank. Unless set aside, limited, or
suspended by a court as provided in this chapter, the emergency order remains effective
and enforceable pending the completion of the administrative proceedings pursuant to the
emergency order and until such time as the superintendent dismisses the charges specified
in the emergency order. If a final cease and desist order is issued against the state bank or
the director, officer, employee, or substantial shareholder, the emergency order remains in
effect until the effective date of the final order.
2. Within ten days after the state bank concerned or any director, officer, employee,
or substantial shareholder is served with an emergency order, the state bank or such
director, officer, employee, or substantial shareholder may apply to the district court of Polk
county for an injunction setting aside, limiting, or suspending the enforcement, operation,
or effectiveness of such emergency order pending the completion of the administrative
proceedings. If serious prejudice to the interests of the superintendent, the state bank, the
officer, director, employee, or substantial shareholder would result from such hearing, the
court may order the judicial proceeding to be conducted in camera.
3. The emergency order shall contain a concise statement of the facts constituting the
alleged unsafe or unsound practice or alleged dishonest act, and shall fix a time and place at
which a hearing will be held to determine whether a final order to cease and desist should
issue against the state bank or any director, officer, employee, or substantial shareholder.
The hearing shall be fixed for a date not later than thirty days after service of the emergency
order unless a later date is set at the request of the party so served. If the state bank, or
the director, officer, employee, or substantial shareholder fails to appear at the hearing, the
state bank, or the director, officer, employee, or substantial shareholder is deemed to have
consented to the issuance of a cease and desist order. In the event of such consent, or if upon
the record made at the hearing the superintendent finds that any unsafe or unsound practice
or dishonest act specified in the emergency order has been established, the superintendent
may issue and serve upon the state bank, or the director, officer, employee, or substantial
shareholder a final order to cease and desist from any such practice or act. The order may
require the state bank, or the director, officer, employee, or substantial shareholder to cease
and desist from any such practice or act and, further, to take affirmative action, including
suspension of the director, officer, or employee.
4. A hearing provided for in this section shall be presided over by an administrative law
judge appointed in accordance with section 17A.11. The hearing shall be private, unless
the superintendent determines after full consideration of the views of the party afforded the
hearing, that a public hearing is necessary to protect the public interest. After the hearing,
and within thirty days after the case has been submitted for decision, the superintendent
shall review the proposed order of the administrative law judge and render a final decision,
including findings of fact upon which the decision is predicated, and issue and serve upon
each party to the proceeding an order consistent with this section.
5. Any final order issued by the superintendent pursuant to subsection 3 becomes
effective upon service of the final order on the state bank, director, officer, employee, or
substantial shareholder and shall remain effective except to the extent that it is stayed,

modified, terminated, or set aside by action of the superintendent or of the district court of
Polk county in accordance with the terms of chapter 17A.
6. In the case of violation or threatened violation of, or failure to obey, an emergency
order issued pursuant to subsection 1 or a final order issued pursuant to subsection 3, the
superintendent may apply to the district court of Polk county for the enforcement of the order
and such court shall have jurisdiction and power to order and require compliance with the
emergency order or final order.
7. For purposes of this section, “substantial shareholder” means a shareholder exercising
a controlling influence over the management or policies of a state bank as determined by the
superintendent.