§ 30701. Enforcement powers of Commissioner

(a) The Commissioner may:

(1) Restrict the withdrawal of share or deposit accounts from a Vermont credit union or a Vermont office of a state-chartered credit union when the Commissioner finds that extraordinary circumstances make the restriction necessary for the proper protection of members in the affected credit union.

(2) Order any person to cease violating this title, a lawful regulation, or order of the Commissioner issued under it, or to cease engaging in any unsafe or unsound practice.

(3) Except as provided in subdivision (4) of this subsection, impose an administrative penalty of not more than $15,000.00 upon any credit union or any person who, for each violation of this title, a lawful regulation, or order of the Commissioner issued under it:

(A) knowingly violates this title or a lawful regulation or order issued under it;

(B) has knowingly engaged or participated in any materially unsafe or unsound practice in connection with a credit union; or

(C) has knowingly committed or engaged in any act, omission, or practice that constitutes a breach of fiduciary duty to the credit union, including violations of section 31313 of this title.

(4) Impose an administrative penalty of not more than $100.00 per day on any person who fails without good cause to file any report or other filing under this title when due.

(5) Remove from a Vermont credit union or state credit union regulated under this title any director, officer, committee member, employee, agent of the credit union, or other person who:

(A) knowingly violates this title or a lawful regulation or order issued under it;

(B) is convicted of a crime involving dishonesty;

(C) has knowingly engaged or participated in any materially unsafe or unsound practice in connection with the credit union;

(D) has knowingly committed or engaged in any act, omission, or practice that constitutes a breach of fiduciary duty to the credit union; or

(E) is not eligible for bond coverage or who loses his or her ability to be covered by a bond.

(b) In determining the amount of any administrative penalty assessed pursuant to this section, the Commissioner shall consider the following factors:

(1) the appropriateness of the administrative penalty with respect to the financial resources and good faith of the person or credit union charged;

(2) the gravity of the violation or practice;

(3) the history of previous violations or practices of a similar nature;

(4) the economic benefit, if any, derived by any person from the violation or practice;

(5) whether the credit union has suffered or probably will suffer financial loss or other damage;

(6) whether the interest of members could be seriously prejudiced by such violation, practice, or breach of fiduciary duty; or

(7) other factors as justice may require.

(c)(1) Except as provided in subdivision (2) of this subsection, the Commissioner shall provide notice of any enforcement order proposed pursuant to this section and the grounds therefore by mail to the credit union and to any person named as a party to the enforcement proceeding. The credit union or any person so served may, within 30 days after service on the credit union, request that the Commissioner hold a hearing. If no hearing is requested, the proposed order shall become final 30 days after service on the credit union or such person. The provisions of 3 Vt. Stat. Ann. chapter 25 and any applicable Department rules shall govern any hearing held by the Commissioner under this section. An appeal under this section shall be filed within 30 days after the date of the Commissioner’s decision and shall be to the Washington Superior Court.

(2) Notwithstanding subdivision (1) of this subsection, the Commissioner may, ex parte without notice, issue any enforcement order under this section in any case in which the Commissioner determines such action is necessary to:

(A) conserve the assets of any credit union; or

(B) protect the interests of the members of such credit union.

(d) The hearing on a removal order shall be private unless the Commissioner determines that a public hearing is necessary to protect the public interest. If the Commissioner deems it necessary to ensure the continued safety and soundness of the credit union, the Commissioner may, in his or her discretion, order an immediate suspension of any person pending completion of further administrative proceedings on his or her removal. (Added 2005, No. 16, § 1, eff. July 1, 2005; amended 2013, No. 29, § 18, eff. May 13, 2013; 2021, No. 105 (Adj. Sess.), § 320, eff. July 1, 2022.)