                                 CODE OF VIRGINIA

POWERS OF COMMISSION IN CASE OF NONOBSERVANCE OF LAW, NONCOMPLIANCE WITH ORDERS,
INSUFFICIENT RESERVES OR INSOLVENCY; APPOINTMENT OF FEDERAL DEPOSIT INSURANCE
CORPORATION AS RECEIVER (§ 6.2-1199)

A. If the Commission finds that: (i) the laws of the Commonwealth are not being
fully observed by a savings institution doing business in the Commonwealth; (ii)
a savings institution is being operated in an unsafe or unsound manner; (iii)
the institution has failed to comply with the lawful orders of the Commission;
(iv) the reserve of the institution is insufficient for the protection of
account holders; or (v) a savings institution is, or is about to become,
insolvent, it shall give immediate notice thereof to the officers and directors
of the institution. If necessary to conserve the assets of the institution or to
protect the interests of its account holders or the public interest, the
Commission may, after reasonable notice to the institution and opportunity for
it to be heard:

   1. Close the institution for a period not exceeding 60 days, which period may
   be further extended for a like period or periods as the Commission deems
   necessary;

   2. Require the officers and directors of the institution to liquidate, insofar
   as is required, its outstanding loans;

   3. Require that all lawful orders of the Commission be complied with;

   4. Require the institution to make reports daily or at such other times as it
   may require as to the results achieved in carrying out its orders;

   5. Temporarily suspend the right of such institution to receive any further
   deposits;

   6. Without examination, close, for such period or periods as the Commission
   may deem necessary, any savings institution facing an emergency due to
   withdrawal of deposits or otherwise, or, without closing such savings
   institution, grant to it the right to suspend or limit the withdrawal of
   deposits, for such period as the Commission may determine; or

   7. Require that the savings institution desist from those activities that have
   resulted in the unsafe or unsound operation of the institution.

B. If the Commission determines that a receiver should be appointed for a
savings institution, the Commission may close the doors of the institution, take
charge of the books, assets and affairs of the institution, and apply to any
court in the Commonwealth having jurisdiction to appoint receivers for the
appointment of a receiver to take charge of the institution&#8217;s business and
assets. Proceedings for the appointment of a receiver of a savings institution
shall not be entertained by any court except on the application of the
Commission.

C. In any case where the Commission finds that an insured savings institution is
insolvent or about to become insolvent, the Commission may seek the appointment
of the Federal Deposit Insurance Corporation as receiver for the savings
institution. The court may appoint the Federal Deposit Insurance Corporation as
receiver for the savings institution if it finds that to do so would be in the
public interest. Upon its being appointed, the Federal Deposit Insurance
Corporation shall not be required to post bond, and it shall have as receiver
all those powers afforded under federal law.

D. The Commissioner may issue and serve upon an association an order to cease
and desist from an unsafe or unsound practice or a violation if, in the opinion
of the Commissioner, an association (i) is engaging or has engaged, or there is
reasonable cause to believe is about to engage, in an unsafe or unsound practice
in conducting the business of the association; or (ii) is violating or has
violated, or there is reasonable cause to believe is about to violate, this
chapter or any other applicable law, regulation, or order. An order to cease and
desist shall contain a statement of the facts constituting the alleged violation
or unsafe or unsound practice, and it may require, in terms that may be
mandatory or otherwise, an association, its directors, officers, employees, or
agents to cease and desist from such violation or practice. The order shall
specify the effective date thereof and shall contain a notice to the association
of its right to request a hearing on the order in accordance with the
Commission&#8217;s Rules.

E. When the unsafe or unsound practice or the violation specified in an order to
cease and desist, or any continuation thereof, is likely to prejudice the
interests of the account holders or the stockholders of an association, the
Commissioner may issue his order effective immediately. An order to cease and
desist shall remain in effect until it is withdrawn by the Commissioner or is
terminated by the Commission after a hearing on the matter. A request for
hearing under this section shall be given expeditious treatment on the docket of
the Commission, and the Commission need not allow for 10 days&#8217; notice to
the parties.

HISTORY: Code 1950, § 6-201.60; 1960, c. 402; 1966, c. 584, § 6.1-190; 1972,
c. 796, § 6.1-195.70; 1983, c. 506; 1985, c. 425, § 6.1-194.83; 1990, c. 3;
2010, c. 794.