Maine Revised Statutes Title 9-B Sec. 232 – Removal or prohibition of officer or director
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The superintendent may remove any officer or director of a financial institution organized pursuant to this Title or any officer of a branch of an out-of-state financial institution authorized to do business in this State or any officer or director of a financial institution holding company, in accordance with the procedures and subject to the conditions and limitations set forth in this section. The superintendent may prohibit an officer or director of a financial institution, financial institution holding company or branch of an out-of-state financial institution from participating in any manner in the conduct of the affairs of a financial institution, financial institution holding company or branch of an out-of-state financial institution if the superintendent determines that such action is necessary for the protection of the public, the financial institution, financial institution holding company or out-of-state financial institution or the interests of the institution’s depositors or creditors. [PL 1997, c. 660, Pt. A, §2 (AMD).]
1. Grounds for removal. The superintendent may serve written notice of intent to remove an officer or director from office or to prohibit further participation by the officer or director in any manner in the conduct of the affairs of a financial institution or financial institution holding company if:
A. In the opinion of the superintendent, that officer or director has directly or indirectly:
(1) Violated a law, rule, regulation or cease and desist order that has become final;
(2) Engaged in or participated in any unsafe or unsound practice; or
(3) Committed or engaged in any act, omission, or practice that constitutes a breach of the fiduciary duty of the officer or director; [PL 1993, c. 538, §2 (RPR).]
B. By reason of the violation, practice or breach of fiduciary duty described in paragraph A:
(1) The financial institution or financial institution holding company has suffered or will probably suffer financial loss or other damage;
(2) The interests of the financial institution’s depositors or creditors or the public have been or could be prejudiced; or
(3) The officer or director has received financial gain or other benefit by reason of the violation, practice or breach of fiduciary duty; and [PL 2005, c. 83, §2 (AMD).]
C. The violation, practice or breach of fiduciary duty described in paragraph A involves personal dishonesty on the part of the officer or director or demonstrates willful or continuing disregard by the officer or director for the safety or soundness of the financial institution or financial institution holding company. [PL 2005, c. 83, §2 (AMD).]
D. [PL 2005, c. 83, §3 (RP).]
E. [PL 2005, c. 83, §4 (RP).]
[PL 2005, c. 83, §§2-4 (AMD).]
Terms Used In Maine Revised Statutes Title 9-B Sec. 232
- Agency: means a branch office of a financial institution at which all or part of the business of the institution is conducted, but the records pertaining to such business are maintained at another office of the institution, and not at such agency office. See Maine Revised Statutes Title 9-B Sec. 131
- Appellate: About appeals; an appellate court has the power to review the judgement of another lower court or tribunal.
- Branch: means any office of a financial institution, including a credit union, where the business of banking is conducted other than the institution's main office. See Maine Revised Statutes Title 9-B Sec. 131
- Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
- Conviction: A judgement of guilt against a criminal defendant.
- Director: means a member of the governing body of a financial institution. See Maine Revised Statutes Title 9-B Sec. 131
- Fiduciary: A trustee, executor, or administrator.
- Financial institution: means a universal bank or limited purpose bank organized under the provisions of this Title, and a trust company, nondepository trust company, savings bank, industrial bank or savings and loan association organized under the prior laws of this State. See Maine Revised Statutes Title 9-B Sec. 131
- Financial institution holding company: means any company which is deemed to be a holding company pursuant to the provisions contained in chapter 101. See Maine Revised Statutes Title 9-B Sec. 131
- Indictment: The formal charge issued by a grand jury stating that there is enough evidence that the defendant committed the crime to justify having a trial; it is used primarily for felonies.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Officer: means an employee of a financial institution who has been given managerial or other high-level duties by the governing body of the financial institution. See Maine Revised Statutes Title 9-B Sec. 131
- Out-of-state: means a foreign country or a state other than this State. See Maine Revised Statutes Title 9-B Sec. 131
- Out-of-state financial institution: means a financial institution organized under provisions of law of a foreign country or a state other than this State that maintains, or seeks to establish and maintain, a branch in this State. See Maine Revised Statutes Title 9-B Sec. 131
- Person: means an individual, corporation, partnership, joint venture, trust, estate or unincorporated association. See Maine Revised Statutes Title 9-B Sec. 131
- Superintendent: means the Superintendent of Financial Institutions. See Maine Revised Statutes Title 9-B Sec. 131
- United States: includes territories and the District of Columbia. See Maine Revised Statutes Title 1 Sec. 72
1-A. Additional grounds for removal. The superintendent may serve written notice of intent to remove an officer or director from office or to prohibit further participation by the officer or director in any manner in the conduct of the affairs of a financial institution or financial institution holding company if:
A. In the opinion of the superintendent, that officer or director has evidenced personal dishonesty and unfitness to continue as an officer or director of the financial institution or financial institution holding company by conduct with respect to another business entity that resulted, or is likely to result, in substantial financial loss or other damage; or [PL 2005, c. 83, §5 (NEW).]
B. The officer or director has been removed or prohibited from participation in any manner in the conduct of the affairs of the financial institution by the appropriate federal banking agency. [PL 2005, c. 83, §5 (NEW).]
[PL 2005, c. 83, §5 (NEW).]
2. Notice of intent to remove.
A. The written notice required in subsection 1 shall be in the form prescribed by the Maine Administrative Procedure Act, Title 5, section 9052, subsection 4 and shall be served not less than 30 nor more than 60 days prior to the date set for the hearing. [PL 1977, c. 694, §156 (RPR).]
B. The superintendent shall serve such written notice in accordance with Rule 4 of the Maine Rules of Civil Procedure upon the officer or director involved and copies of such notice must be served upon the financial institution or financial institution holding company of which the person is an officer or director or in the conduct of whose affairs the person has participated. [PL 1997, c. 182, Pt. C, §3 (AMD).]
[PL 1997, c. 182, Pt. C, §3 (AMD).]
3. Effect of notice.
A. If the superintendent considers it necessary for the protection of the financial institution or financial institution holding company or the interests of its depositors or shareholders, such written notice may suspend the officer or director from office or prohibit the officer or director from further participation in any manner in the conduct of the affairs of the financial institution or financial institution holding company. [PL 1997, c. 182, Pt. C, §4 (AMD).]
B. Such suspension or prohibition shall become effective upon service of said notice and, unless stayed by the Superior Court pursuant to subsection 4, shall remain in effect pending completion of administrative proceedings pursuant to this section and until such time as the superintendent shall dismiss the charges specified in such notice or, if an order of removal or prohibition is issued against the officer or director, until the effective date of any such order. [PL 1975, c. 500, §1 (NEW).]
[PL 1997, c. 182, Pt. C, §4 (AMD).]
4. Stay of suspension or prohibition. Any officer or director adversely affected by a suspension or prohibition contained in a written notice pursuant to subsection 3 may apply to the Superior Court in the county where the financial institution of which he is an officer or director has its main office or in the Superior Court of Kennebec County for a stay of such suspension or prohibition pending completion of administrative proceedings required under this section, and such court shall have jurisdiction to stay such suspension or prohibition.
[PL 1975, c. 500, §1 (NEW).]
5. Hearing.
A. The superintendent shall hold a hearing at the time and place specified in the notice required under subsection 2, such hearing to be governed by the Maine Administrative Procedure Act, Title 5, chapter 375, subchapter IV. [PL 1979, c. 429, §4 (AMD).]
B. Unless the officer or director affected shall appear at such hearing, he shall be deemed to have consented to the issuance of an order for such removal or prohibition. [PL 1975, c. 500, §1 (NEW).]
C. In the event of consent pursuant to paragraph B, or if upon the record made at any such hearing the superintendent finds that any of the grounds specified in the notice have been established, the superintendent may issue such orders of suspension or removal from office or prohibition from participation in the conduct of the affairs of the financial institution or financial institution holding company, as the superintendent considers appropriate. [PL 1997, c. 182, Pt. C, §5 (AMD).]
D. Notwithstanding any provision to the contrary, as prescribed by the Maine Administrative Procedure Act, Title 5, chapter 375, subchapter IV, such order shall be issued not later than 30 days after the close of the hearing if any, held pursuant to this section. [PL 1987, c. 402, Pt. A, §86 (AMD).]
[PL 1997, c. 182, Pt. C, §5 (AMD).]
6. Effective date.
A. Any order issued pursuant to subsection 5 becomes effective at the expiration of 30 days after service upon the officer or director and the financial institution or financial institution holding company concerned; provided that an order issued upon consent becomes effective within the time specified therein. [PL 1997, c. 182, Pt. C, §6 (AMD).]
B. Such order shall remain effective and enforceable except to such extent as it is stayed, modified, terminated or set aside by action of the superintendent or a court having jurisdiction relating thereto. [PL 1975, c. 500, §1 (NEW).]
[PL 1997, c. 182, Pt. C, §6 (AMD).]
7. Participation in a felony.
A. The superintendent may issue written notice, pursuant to subsections 2 and 3, to any officer or director charged in any information, complaint, or indictment with commission of or participation in a felony involving dishonesty or breach of trust, pursuant to laws of the State of Maine or of the United States. Such suspension or prohibition shall remain in effect until terminated by the superintendent or said information, complaint, or indictment is finally disposed of. [PL 1975, c. 500, §1 (NEW).]
B. At such time as a judgment of conviction with respect to such offense is entered against such officer or director, and such judgment is not subject to further appellate review, the superintendent may issue and serve upon such officer or director an order removing the officer or director from such office or prohibiting the officer or director from further participation in the conduct of the affairs of the financial institution or financial institution holding company except with the written consent of the superintendent. Such order becomes effective after service upon the officer or director and the financial institution or financial institution holding company. [PL 1997, c. 182, Pt. C, §7 (AMD).]
C. A finding of not guilty or other disposition of the charge in paragraph A shall not preclude the superintendent from instituting proceedings pursuant to this section on the grounds set forth in subsection 1. [PL 1975, c. 500, §1 (NEW).]
[PL 1997, c. 182, Pt. C, §7 (AMD).]
8. Prohibition on participation in banking industry. An officer or director may be prohibited from participating in the banking industry in accordance with the following.
A. Any officer or director who, pursuant to an order issued under this section, has been removed from office in a financial institution, out-of-state financial institution or financial institution holding company or prohibited from participating in the conduct of the affairs of a financial institution, out-of-state financial institution, or financial institution holding company may not, while such order is in effect, continue or commence to hold any office, or participate in any manner in the conduct of the affairs of any financial institution, out-of-state financial institution or financial institution holding company. [PL 1997, c. 660, Pt. A, §5 (NEW).]
B. If, on or after the date an order is issued under this section that removes from office an officer or director or prohibits an officer or director from participating in the conduct of the affairs of any financial institution, out-of-state financial institution or financial institution holding company, the order is modified, terminated or set aside in accordance with subsection 6, then the prohibition imposed in paragraph A must be similarly modified, terminated or set aside. [PL 1997, c. 660, Pt. A, §5 (NEW).]
[RR 1997, c. 2, §35 (COR).]
SECTION HISTORY
PL 1975, c. 500, §1 (NEW). PL 1977, c. 694, §156 (AMD). PL 1979, c. 429, §§4,5 (AMD). PL 1987, c. 402, §A86 (AMD). PL 1993, c. 538, §2 (AMD). PL 1995, c. 628, §17 (AMD). RR 1997, c. 2, §35 (COR). PL 1997, c. 182, §§C1-7 (AMD). PL 1997, c. 660, §§A1-5 (AMD). PL 2005, c. 83, §§2-5 (AMD).