Florida Regulations 69U-100.03852: Disapproval of Directors or Executive Officers
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(1) Florida Statutes § 655.0385, requires state financial institutions to notify OFR of the proposed appointment of any individual to the board of directors or the employment of any individual as an executive officer, or equivalent position, 60 days before such appointment or employment becomes effective, if the applying financial institution:
(a) Has been chartered for less than 2 years;
(b) Has undergone a change in control or conversion within the preceding 2 years;
(c) Is not in compliance with the minimum capital requirements applicable to such financial institution; or
(d) Is otherwise operating in an unsafe or unsound condition, as determined by OFR, on the basis of such financial institution’s most recent report of condition or report of examination.
(2) Notice.
(a) A financial institution shall provide a complete written notice to OFR at least 60 days prior to the effective date of the appointment of a director or the employment of an executive officer, or equivalent position. Each notice shall include a completed Form OFR-U-10 Interagency Biographical and Financial Report, (effective 01/2021), http://www.flrules.org/Gateway/reference.asp?No=Ref-12607 adopted and incorporated herein by reference. Form OFR-U-10 requests that the applicant provide his or her social security number. Please refer to the OFR’s Notice Regarding the Collection and Use of Social Security Numbers (effective 01/2021), http://www.flrules.org/Gateway/reference.asp?No=Ref-12608, adopted and incorporated herein by reference. Form OFR-U-10 must be accompanied by a completed Form OFR-U-10A, Addendum to Form OFR-U-10, Authorization for Release of Confidential Information (effective 01/2021), http://www.flrules.org/Gateway/reference.asp?No=Ref-12610, adopted and incorporated herein by reference.
Notices shall be submitted to, and Forms OFR-U-10 and OFR-U-10A may be obtained by request from, the Division of Financial Institutions, Office of Financial Regulation, 200 East Gaines Street, Tallahassee, Florida 32399-0371, Telephone (850)410-9880. The forms and the Notice Regarding the Collection and Use of Social Security Numbers are also available at OFR’s website, www.flofr.gov.
(b) A notice is not complete until the financial institution provides all the information requested in paragraph (2)(a), including complete explanations where material issues arise regarding the competence, experience, character, or integrity of the proposed director or executive officer, or equivalent position, and any additional information that OFR requests following a determination that the financial institution’s original submission of the notice was not complete.
(c) Each proposed director or executive officer, or equivalent position, shall make certain that the notice submitted on his or her behalf is accurate.
(3) Processing.
(a) OFR shall have 60 days after receipt of a complete notice to issue a letter of disapproval. Such disapproval letter shall be mailed to the financial institution and the disapproval shall be effective upon notification. Any financial institution so notified shall immediately require the individual to disassociate himself or herself from the financial institution.
(b) A financial institution shall not allow an individual who has been proposed to become a member of the board of directors or employed as an executive officer, or equivalent position, to serve in such capacity before the expiration of the 60 day review period unless OFR notifies the financial institution of an intention not to disapprove the individual.
(c) OFR will conduct background investigations on individuals proposed to become directors or executive officers, or equivalent positions. The investigations shall, in general, include contacts with the FBI, local law enforcement and prosecutorial agencies, federal and state financial institution regulatory agencies, and other federal and state government agencies. Background investigations of proposed individuals who are not citizens of the United States will include appropriate foreign and international contacts.
(d) If OFR makes a request for additional information during the review of an incomplete notice, the financial institution must provide the information within 25 days of such request or request in writing that OFR suspend processing of the notice.
(4) Requests for Interim Appointment.
(a) Any financial institution may file a written request with OFR to permit an individual proposed as a director or executive officer, or equivalent position, to assume his or her position on an interim basis prior to the expiration of the 60 day prior notice period.
(b) OFR shall not consider a request for interim appointment or employment of a director or executive officer, or equivalent position, unless OFR has received a completed Form OFR-U-10 for the proposed individual.
(c) OFR shall only grant a request for the interim appointment or employment of a director or executive officer, or equivalent position, if the interim appointment or employment is not likely to cause a risk of harm to the financial institution or the public interest.
(d) The granting of a request for the interim appointment or employment of an individual to the position of director or executive officer, or equivalent position, shall not affect OFR’s ability to subsequently issue a notice of disapproval within the 60 day prior notice period.
(5) Regulatory Standards for Evaluating Requests for Proposed Directors or Executive Officers, or Equivalent Positions.
(a) The financial institution may appoint or employ an individual to begin service as a director or executive officer, or equivalent position, on a permanent basis if:
1. OFR notifies the financial institution of an intent not to disapprove the proposed director or executive officer, or equivalent position, or
2. The 60 day review period expires and during such review period the concerned individual was not disapproved.
(b) OFR shall issue a notice of disapproval if the competence, experience, character, or integrity of the proposed individual to be appointed or employed indicates that it is not in the best interests of the depositors, the members, or the public to permit the individual to be employed by or associated with the state financial institution.
(c) Unless OFR finds, in writing, that the proposed individual has shown rehabilitation, the proposed director or executive officer, or equivalent position, shall not be eligible for permanent appointment or employment, if the individual:
1. Has been convicted of or has entered a plea of guilty or nolo contendere, regardless of adjudication, to a felony or of an offense involving moral turpitude, dishonesty, a breach of trust, a violation of state or federal financial institution law, the Florida Financial Institutions Codes, or fraud;
2. Has been removed by any regulatory agency as a director, officer, or employee of any financial institution;
3. Has performed acts of fraud or dishonesty, or has failed to perform duties, resulting in a loss to a financial institution;
4. Has been convicted or found guilty, regardless of adjudication, of a violation of Florida Statutes § 655.50, relating to the Florida Control of Money Laundering and Terrorist Financing in Financial Institutions Act; chapter 896, F.S., relating to offenses related to financial transactions; or any similar state or federal law;
5. Has had a professional license suspended or revoked by the applicable licensing authority or has been sanctioned by such licensing or regulatory authority for violations of any statutes, rules or policies; or
6. Has demonstrated a lack of responsibility in relation to financial matters which is reflected by the credit-payment history and/or bankruptcy of the person or by such person’s business history.
(d) Material errors or omissions in any information submitted to OFR regarding an individual shall be grounds for a finding by OFR that the individual fails to meet the requisite standards for service as a director or executive officer, or equivalent position, of a state financial institution.
(e) If an individual is proposed for the position of chief executive officer, president, or equivalent position, he or she shall have had at least 1 year of direct experience as an executive officer, financial institution regulator, or director of a financial institution within the last 5 years. A financial institution may request a waiver of this requirement by writing to the Director of the Division of Financial Institutions, Office of Financial Regulation detailing why the proposed officer’s overall experience and expertise compensates for the lack of recent, direct financial institution or financial institution regulator experience. OFR shall grant a request for a waiver only when it is clear that the proposed officer’s overall experience and expertise suggests he or she will perform satisfactorily in office.
(f) If the proposed executive officer, president, or equivalent position is to be employed by a state financial institution that does not meet the minimum capital requirements or is otherwise operating in an unsafe or unsound condition, OFR shall, based on the unique needs of the financial institution, require more extensive financial institution experience.
Rulemaking Authority Florida Statutes § 655.012(2), 655.0385(6) FS. Law Implemented 655.0385, 658.21, 658.33 FS. History-New 12-14-93, Amended 3-20-00, 12-28-00, 2-3-02, Formerly 3C-100.03852, Amended 9-11-18, 1-18-21.
Terms Used In Florida Regulations 69U-100.03852
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Fraud: Intentional deception resulting in injury to another.
- Nolo contendere: No contest-has the same effect as a plea of guilty, as far as the criminal sentence is concerned, but may not be considered as an admission of guilt for any other purpose.
- Plea: In a criminal case, the defendant's statement pleading "guilty" or "not guilty" in answer to the charges, a declaration made in open court.
(b) Has undergone a change in control or conversion within the preceding 2 years;
(c) Is not in compliance with the minimum capital requirements applicable to such financial institution; or
(d) Is otherwise operating in an unsafe or unsound condition, as determined by OFR, on the basis of such financial institution’s most recent report of condition or report of examination.
(2) Notice.
(a) A financial institution shall provide a complete written notice to OFR at least 60 days prior to the effective date of the appointment of a director or the employment of an executive officer, or equivalent position. Each notice shall include a completed Form OFR-U-10 Interagency Biographical and Financial Report, (effective 01/2021), http://www.flrules.org/Gateway/reference.asp?No=Ref-12607 adopted and incorporated herein by reference. Form OFR-U-10 requests that the applicant provide his or her social security number. Please refer to the OFR’s Notice Regarding the Collection and Use of Social Security Numbers (effective 01/2021), http://www.flrules.org/Gateway/reference.asp?No=Ref-12608, adopted and incorporated herein by reference. Form OFR-U-10 must be accompanied by a completed Form OFR-U-10A, Addendum to Form OFR-U-10, Authorization for Release of Confidential Information (effective 01/2021), http://www.flrules.org/Gateway/reference.asp?No=Ref-12610, adopted and incorporated herein by reference.
Notices shall be submitted to, and Forms OFR-U-10 and OFR-U-10A may be obtained by request from, the Division of Financial Institutions, Office of Financial Regulation, 200 East Gaines Street, Tallahassee, Florida 32399-0371, Telephone (850)410-9880. The forms and the Notice Regarding the Collection and Use of Social Security Numbers are also available at OFR’s website, www.flofr.gov.
(b) A notice is not complete until the financial institution provides all the information requested in paragraph (2)(a), including complete explanations where material issues arise regarding the competence, experience, character, or integrity of the proposed director or executive officer, or equivalent position, and any additional information that OFR requests following a determination that the financial institution’s original submission of the notice was not complete.
(c) Each proposed director or executive officer, or equivalent position, shall make certain that the notice submitted on his or her behalf is accurate.
(3) Processing.
(a) OFR shall have 60 days after receipt of a complete notice to issue a letter of disapproval. Such disapproval letter shall be mailed to the financial institution and the disapproval shall be effective upon notification. Any financial institution so notified shall immediately require the individual to disassociate himself or herself from the financial institution.
(b) A financial institution shall not allow an individual who has been proposed to become a member of the board of directors or employed as an executive officer, or equivalent position, to serve in such capacity before the expiration of the 60 day review period unless OFR notifies the financial institution of an intention not to disapprove the individual.
(c) OFR will conduct background investigations on individuals proposed to become directors or executive officers, or equivalent positions. The investigations shall, in general, include contacts with the FBI, local law enforcement and prosecutorial agencies, federal and state financial institution regulatory agencies, and other federal and state government agencies. Background investigations of proposed individuals who are not citizens of the United States will include appropriate foreign and international contacts.
(d) If OFR makes a request for additional information during the review of an incomplete notice, the financial institution must provide the information within 25 days of such request or request in writing that OFR suspend processing of the notice.
(4) Requests for Interim Appointment.
(a) Any financial institution may file a written request with OFR to permit an individual proposed as a director or executive officer, or equivalent position, to assume his or her position on an interim basis prior to the expiration of the 60 day prior notice period.
(b) OFR shall not consider a request for interim appointment or employment of a director or executive officer, or equivalent position, unless OFR has received a completed Form OFR-U-10 for the proposed individual.
(c) OFR shall only grant a request for the interim appointment or employment of a director or executive officer, or equivalent position, if the interim appointment or employment is not likely to cause a risk of harm to the financial institution or the public interest.
(d) The granting of a request for the interim appointment or employment of an individual to the position of director or executive officer, or equivalent position, shall not affect OFR’s ability to subsequently issue a notice of disapproval within the 60 day prior notice period.
(5) Regulatory Standards for Evaluating Requests for Proposed Directors or Executive Officers, or Equivalent Positions.
(a) The financial institution may appoint or employ an individual to begin service as a director or executive officer, or equivalent position, on a permanent basis if:
1. OFR notifies the financial institution of an intent not to disapprove the proposed director or executive officer, or equivalent position, or
2. The 60 day review period expires and during such review period the concerned individual was not disapproved.
(b) OFR shall issue a notice of disapproval if the competence, experience, character, or integrity of the proposed individual to be appointed or employed indicates that it is not in the best interests of the depositors, the members, or the public to permit the individual to be employed by or associated with the state financial institution.
(c) Unless OFR finds, in writing, that the proposed individual has shown rehabilitation, the proposed director or executive officer, or equivalent position, shall not be eligible for permanent appointment or employment, if the individual:
1. Has been convicted of or has entered a plea of guilty or nolo contendere, regardless of adjudication, to a felony or of an offense involving moral turpitude, dishonesty, a breach of trust, a violation of state or federal financial institution law, the Florida Financial Institutions Codes, or fraud;
2. Has been removed by any regulatory agency as a director, officer, or employee of any financial institution;
3. Has performed acts of fraud or dishonesty, or has failed to perform duties, resulting in a loss to a financial institution;
4. Has been convicted or found guilty, regardless of adjudication, of a violation of Florida Statutes § 655.50, relating to the Florida Control of Money Laundering and Terrorist Financing in Financial Institutions Act; chapter 896, F.S., relating to offenses related to financial transactions; or any similar state or federal law;
5. Has had a professional license suspended or revoked by the applicable licensing authority or has been sanctioned by such licensing or regulatory authority for violations of any statutes, rules or policies; or
6. Has demonstrated a lack of responsibility in relation to financial matters which is reflected by the credit-payment history and/or bankruptcy of the person or by such person’s business history.
(d) Material errors or omissions in any information submitted to OFR regarding an individual shall be grounds for a finding by OFR that the individual fails to meet the requisite standards for service as a director or executive officer, or equivalent position, of a state financial institution.
(e) If an individual is proposed for the position of chief executive officer, president, or equivalent position, he or she shall have had at least 1 year of direct experience as an executive officer, financial institution regulator, or director of a financial institution within the last 5 years. A financial institution may request a waiver of this requirement by writing to the Director of the Division of Financial Institutions, Office of Financial Regulation detailing why the proposed officer’s overall experience and expertise compensates for the lack of recent, direct financial institution or financial institution regulator experience. OFR shall grant a request for a waiver only when it is clear that the proposed officer’s overall experience and expertise suggests he or she will perform satisfactorily in office.
(f) If the proposed executive officer, president, or equivalent position is to be employed by a state financial institution that does not meet the minimum capital requirements or is otherwise operating in an unsafe or unsound condition, OFR shall, based on the unique needs of the financial institution, require more extensive financial institution experience.
Rulemaking Authority Florida Statutes § 655.012(2), 655.0385(6) FS. Law Implemented 655.0385, 658.21, 658.33 FS. History-New 12-14-93, Amended 3-20-00, 12-28-00, 2-3-02, Formerly 3C-100.03852, Amended 9-11-18, 1-18-21.