North Dakota Code 6-07.2-01 – Department taking possession – Procedure
1. The commissioner may take possession of the business and property of an institution the commissioner supervises if it appears to the commissioner that any of the following conditions exist:
Terms Used In North Dakota Code 6-07.2-01
- 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
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- 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
- Federal Deposit Insurance Corporation: A government corporation that insures the deposits of all national and state banks that are members of the Federal Reserve System. Source: OCC
- Financial institution: means any bank, industrial loan company, or savings and loan association organized under the laws of this state or of the United States. 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
- Property: includes property, real and personal. See North Dakota Code 1-01-49
- Rule: includes regulation. 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. The directors or officers of the institution, or the liquidators of the institution subject to a voluntary plan of liquidation, have neglected, failed, or refused to take action the commissioner deems necessary for the protection of the institution.
b. The directors, officers, or liquidators of the institution have impeded or obstructed an examination. This may include concealment or refusal to submit books, papers, records, or affairs of the institution for inspection to any examiner or to any lawful agent of the appropriate federal financial institution regulatory agency or of the department.
c. The business is being conducted in a fraudulent, illegal, or unsafe manner.
d. The institution is conducting business in a way causing losses to depositors. e. The institution is operating in an unsafe or unsound condition.
f. The capital of the institution is impaired such that the likely realizable value of the institution’s assets is insufficient to pay and satisfy the claims of all depositors and all creditors.
g. The institution is insolvent or in imminent danger of insolvency or has suspended ordinary business transactions of the institution due to insufficient funds.
h. The institution has refused or been unable to pay deposits or obligations in accordance with the terms under which those deposits or obligations of the institution were incurred.
i. Substantial dissipation of assets or earnings due to: (1) Any violation of any law or rule; or
(2) An unsafe or unsound practice.
j. The institution is unable to continue operations.
k. The institution is in violation of any applicable state or federal regulation.
l. Neglect or refusal to comply with the terms of a final order of the department, state banking board, state credit union board, or federal financial institution’s regulatory agency essential to preserve the solvency of the institution.
m. The institution has failed to pay the fees charged by the department under section 6-01-17 after due notice of the amount of the fee has been given.
n. The institution’s board of directors requests that the department take possession for the benefit of depositors, other creditors, shareholders, or other persons.
o. The institution has been advised by the federal deposit insurance corporation of the federal deposit insurance corporation‘s intention to withdraw deposit insurance coverage.
p. The institution has been advised by the national credit union association of the national credit union association’s intention to withdraw share insurance coverage.
q. The directors or officers of the bank, or the liquidators of a bank subject to a voluntary plan of liquidation, have assumed duties or performed acts in excess of those authorized by applicable statutes or regulations, by the bank’s organizational documents or plan of liquidation, or without supplying the required bond.
2. If it appears to the commissioner one or more of the conditions in this section exists as to any institution, the commissioner shall cause a notice to be served on the president or other executive officer in charge of the institution and, pursuant to such notice, take possession of the business, property, and records of the institution from the officer citing the reasons for such a demand from this section. The decision of the commissioner is final upon the president or other executive officer’s receipt of the notice and the institution immediately shall surrender possession to the commissioner.