North Dakota Code 6-07.2-17 – Emergency temporary suspension or conservatorship
1. If upon the examination or investigation of an institution regulated by the commissioner, the commissioner determines the laws are not being fully observed, that any irregularities are being practiced, or that the institution’s capital has been or is in danger of being impaired, the commissioner shall give immediate notice of such determination to the officers and directors of the institutions. In addition, if it is deemed necessary in order to conserve the assets of the institution or to protect the interests of depositors and creditors of the institution, the commissioner may do any one or more of the following:
Terms Used In North Dakota Code 6-07.2-17
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Bank: means any national bank, national banking association, corporation, state bank, state banking association, or savings bank, whether organized under the laws of this state or of the United States, engaged in the business of banking. See North Dakota Code 6-01-02
- Banking: means the business of receiving deposits, making loans, discounting commercial paper, issuing drafts, traveler's checks, and similar instruments, handling and making collections, cashing checks and drafts, and buying and selling exchange. See North Dakota Code 6-01-02
- board: when used in this title includes the state banking board and the state credit union board. See North Dakota Code 6-01-03
- capital: as used in this title embraces the amount of outstanding capital notes and debentures legally issued by any banking institution. See North Dakota Code 6-03-42
- Commissioner: means the commissioner of financial institutions. See North Dakota Code 6-01-02
- Credit union: means a cooperative, nonprofit association organized for the purposes of encouraging thrift among its members, creating a source of credit at a fair and reasonable rate of interest, and providing an opportunity for its members to improve their economic and social condition. See North Dakota Code 6-01-02
- following: when used by way of reference to a chapter or other part of a statute means the next preceding or next following chapter or other part. See North Dakota Code 1-01-49
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See North Dakota Code 1-01-49
a. Temporarily suspend the right of the institution to receive any further deposits; b. Temporarily close the bank, for a period not exceeding sixty days, which period may be further extended for one or more sixty-day periods as the commissioner may deem necessary; c. Require the officers and directors of the bank to liquidate its outstanding loans insofar as required; d. Recapitalize the institution; e. Require that any irregularities be corrected promptly; f. Require the institution to make reports, daily or at such other times as may be required to the commissioner; and
g. Without examination, close or appoint a receiver to operate, for such period as the commissioner may deem necessary, an institution facing an emergency due to withdrawal of deposits, a liquidity event in which the institution is unable to continue operations, a cyber- or technology-related incident, or otherwise, or, without closing the institution, grant the institution the right to suspend or limit the withdrawal of deposits, for such period as the commissioner may determine.
2. If an institution fails or refuses to comply with any such order of the commissioner, or if the commissioner determines a receiver for the institution should be appointed, the commissioner may apply for the appointment of a receiver to take charge of the business affairs and assets of the institution and to wind up the institution’s affairs as provided in this chapter.
3. A bank or credit union may request a hearing before the state banking board or state credit union board within ten days of the emergency temporary suspension or conservatorship to review the factual basis used to issue the emergency temporary suspension or conservatorship. The decision made by the state banking board or state credit union board during the hearing is final. If a hearing is not requested, the initial decision of the commissioner is final.