(a) To act with the utmost speed, the commissioner may issue a temporary cease and desist order upon a determination that one or more of the grounds specified in section 412:2-302 are present; provided that, in the case of a Hawaii financial institution or an institution-affiliated party, the commissioner shall not issue a temporary cease and desist order unless the commissioner has also made a determination that the violation, threatened violation, or unsafe or unsound practice is likely to:

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Terms Used In Hawaii Revised Statutes 412:2-304

  • Allegation: something that someone says happened.
  • Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Circuit court: means the court established in each of the judicial circuits of this State pursuant to chapter 603 and which has jurisdiction under § 412:1-108 over a matter. See Hawaii Revised Statutes 412:1-109
  • Commissioner: means the commissioner of financial institutions of this State. See Hawaii Revised Statutes 412:1-109
  • Financial institution: means a Hawaii financial institution, and unless the context indicates otherwise, a federal financial institution or foreign financial institution. See Hawaii Revised Statutes 412:1-109
  • Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
  • Insolvency: means , with respect to a financial institution, that the value of its assets is insufficient to pay its depositors and its creditors. See Hawaii Revised Statutes 412:1-109
  • Institution-affiliated party: means any of the following:

    (1) Any director, officer, employee or controlling shareholder of, or agent for, or other person that controls a financial institution;

    (2) Any person who has filed or is required to file an application to become a financial institution with the commissioner or an application to acquire control of a Hawaii financial institution or financial institution holding company with the commissioner;

    (3) Any shareholder, consultant, joint venture partner, and any other person as determined by the commissioner (by rule or case-by-case) who participates in the conduct of the affairs of a financial institution; or

    (4) Any independent contractor (including any attorney, appraiser, or accountant) who knowingly or recklessly participates in any of the following which caused or is likely to cause more than a minimal financial loss to, or a significant adverse effect on, the financial institution:

    (A) Any violation of law or rule,

    (B) Any breach of fiduciary duty, or

    (C) Any unsafe or unsound practice. See Hawaii Revised Statutes 412:1-109

(1) Cause insolvency or substantial dissipation of assets; or
(2) Seriously weaken the condition of the institution; or
(3) Otherwise seriously prejudice the interests of the depositors during the period in which a permanent cease and desist order can be obtained.

The order shall be accompanied by a notice of charges stating the alleged violation or wrongful practice, a summary of the facts in support of the allegation, and a time and place for a hearing to determine whether the temporary order shall be made permanent. The order may require discontinuance of a violation or practice; require the immediate compliance with all requirements of any applicable agreement, conditions of approval, order, or law; and direct affirmative action as may be necessary to prevent insolvency or to correct the alleged violation or wrongful practice.

(b) The order shall be effective upon service on the affected party. The order shall remain in effect until a permanent cease and desist order is issued after a hearing, a permanent cease and desist order is consented to, or the charges are dismissed upon completion of a hearing. Any affected party contesting the issuance of the temporary cease and desist order may do so by applying to the circuit court for an injunction.
(c) Within ten days after service of a notice of charges, unless an earlier date or later date is set by the commissioner upon request of the affected party, the commissioner shall hold a hearing in accordance with chapter 91. If no appearance is made at the scheduled hearing by the party or its duly authorized representative, the party shall be deemed to have consented to the issuance of the cease and desist order and the commissioner may convert the temporary cease and desist order into a permanent cease and desist order. Any permanent cease and desist order issued after a hearing held in accordance with this subsection shall become effective after service upon the affected party and shall remain effective until modified or terminated by the commissioner. Any appeal of a permanent cease and desist order shall be made to the circuit court in accordance with chapter 91.
(d) Any temporary cease and desist order may be enforced in the circuit court upon application by the commissioner. Any permanent cease and desist order issued in accordance with this section may be enforced as provided in section 412:2-303(c).

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