a duly authorized representative, it shall be deemed to have consented to the termination of its status as an insured institution. If the Home Loan Bank Board shall find that any unsafe or unsound practice or violation specified in such notice has been established and has not been corrected within the time above prescribed in which to make such correction, the Home Loan Bank Board may issue its order terminating the insured status of the institution effective on a date subsequent to such finding and to the expiration of the time specified in such notice of intention. The hearing hereinabove provided for shall be held in accordance with the provisions of the Administrative Procedure Act and shall be subject to review as therein provided and the review by the court shall be upon the weight of the evidence. In the event of the termination of such status, insurance of its accounts to the extent that they were insured on the date of such notice by the institution to the Corporation or such order of termination, less any amounts thereafter withdrawn, repurchased, or redeemed which reduce the insured accounts of an insured member below the amount insured on the date of such notice or order, shall continue for a period of two years, but no investments or deposits made after the date of such notice or order of termination shall be insured. The Corporation shall have the right to examine such institution from time to time during the two-year period aforesaid. Such insured institution shall be obligated to pay, within thirty days after any such notice or order of termination, as a final insurance premium, a sum equivalent to twice the last annual insurance premium paid by it. In the event of the termination of insurance of accounts as herein provided the institution which was the insured institution shall give prompt and reasonable notice to all of its insured members that it has ceased to be an insured institution and it may include in such notice the fact that insured accounts, to the extent not withdrawn, repurchased, or redeemed, remain insured for two years from the date of such termination, but it shall not further represent itself in any manner as an insured institution. In the event of failure to give the notice to insured members as herein provided the Corporation is authorized to give reasonable notice." Recommendation Amend section 407 to read as follows: "SEC. 407. (a) Any insured institution other than a Federal savings and loan association may terminate its status as an insured institution by written notice to the Corporation. Whenever, in the opinion of the Board, any insured institution has violated its duty as such, has continued any unsafe or unsound practice, or has violated any provision of any law or regulation to which it is subject, or any condition imposed by the Corporation or any agreement entered into with the Corporation under section 403 or otherwise, the Board may cause notice to be served upon such institution to appear at a hearing before the Board, a member thereof, or a person designated by the Board and show cause why its status as an insured institution should not be terminated. The notice shall state the ground or grounds upon which it. is based and a copy thereof shall be sent by registered mail to each director of the institution. If, after hearing, the Board finds that a ground or grounds, as hereinabove stated, exist for termination of the insured status of an institution the Board may issue its order terminat ing such status and the insured status of such institution shall cease on the expiration of the date fixed in such order. The Corporation shall have power by regulation or otherwise to define, for the purpose of this subsection, unsafe or unsound practice. "(b) All hearings under the provisions of subsection (a) hereof shall be conducted in accordance with the provisions of the Administrative Procedure Act and shall be held in the Federal judicial district in which the principal office of the institution affected is located unless it consents to another place. The Board or any member thereof or its designated representative shall have power to administer oaths and affirmations and to take or cause depositions to be taken and shall have power to issue subpenas and subpenas duces tecum and shall issue such at the request of any interested party, and the Board or any interested party may apply to the United States District Court of the district where such hearing is designated for the enforcement of such subpenas and subpenas duces tecum and such court shall have power to order and require compliance therewith. "Any institution aggrieved by a final order of the Board entered pursuant to any such hearing may obtain a review of such order in the United States Court of Appeals in the circuit in which the hearing was held by filing in such court within thirty days after the issuance of such order a written petition praying that the order of the Board be set aside. A copy of such petition shall be forthwith served upon the Board by serving a copy thereof on any of its agents and mailing a copy by registered mail to the Federal Home Loan Bank Board, Washington, District of Columbia. "Within thirty days after the service of such petition upon it or such further time as the court shall allow, the Board shall file with the court a copy of the order complained of and the originals or certified copies of all papers and evidence presented to and considered by it in entering said order. The record and briefs upon which any such review shall be held and determined by the court shall contain such information and material and shall be prepared within such time and in such manner as the court may by rule or order prescribe. At the earliest convenient time the court shall determine the matter upon the record before it in the manner prescribed by subsection (e) of section 10 of the Administrative Procedure Act. The court may in its discretion enter judgment for costs against the petitioner. The court's judgment shall be final, subject, however, to review by the Supreme Court of the United States upon writ of certiorari, upon petition therefor under section 1254 of title 28 of the United States Code by the petitioner or by the Board, or by certification by the court pursuant to the provisions of that section. "(c) In the event of the termination of an institution's status as an insured institution, insurance of its accounts to the extent that they were insured on the date of such notice by the institution to the Corporation or the effective date of the order of termination, less any amounts thereafter withdrawn, repurchased, or redeemed which reduce the insured accounts of an insured member below the amount insured on such date, shall continue for a period of two years, but no investments or deposits made after such date, shall be insured. The Corporation shall have the right to examine such institution from time to time during the two-year period aforesaid. Such insured institution shall be obligated to pay, within thirty days after such date, as a final insurance premium, a sum equivalent to twice the last annual insurance premium payable by it. In the event of the termination of insured status the institution which was the insured institution shall give prompt and reasonable notice to all of its insured members that it has ceased to be an insured institution and it may includein such notice the fact that insured accounts, to the extent not withdrawn, repurchased, or redeemed, remain insured for two years from the date of such termination, but it shall not further represent itself in any manner as an insured institution. In the event of failure to give the notice to insured members as herein provided the Corporation is authorized to give reasonable notice. "(d) All expenses of the Board or of the Federal Savings and Loan Insurance Corporation in connection with the preparation for or conduct of proceedings under this section shall be considered as nonadministrative expenses." Reasons As in the case of the existing procedure under subsection (d) of section 5 of the Home Owners' Loan Act of 1933, dealing with the appointment of conservators and receivers for Federal savings and loan associations and with other proceedings involving such associations, the provisions of section 407 of the National Housing Act are presently capable of causing needless delays. The revision here suggested would, it is believed, remedy the defects of the existing section and provide a speedy and effective means of judicial review on the basis provided in the Administrative Procedure Act, as distinguished from review on the weight of the evidence as provided in the existing section. CRIMINAL PROVISIONS 164. COMMISSIONS OR GIFTS FOR PROCURING LOANS Existing law Section 220 of title 18 of the United States Code: "Whoever, being an officer, director, employee, agent, or attorney of any bank, the deposits of which are insured by the Federal Deposit Insurance Corporation, of a Federal intermediate credit bank, or of a National Agricultural Credit Corporation, except as provided by law, stipulates for or receives or consents or agrees to receive any fee, commission, gift, or thing of value, from any person, firm, or corporation, for procuring or endeavoring to procure for such person, firm, or corporation, or for any other person, firm, or corporation, from any such bank or corporation, any loan or extension or renewal of loan or substitution of security, or the purchase or discount or acceptance of any paper, note, draft, check, or bill of exchange by any such bank or corporation, shall be fined not more than $5,000 or imprisoned not more than one year or both." Recommendation Amend section 220 as follows: (1) By inserting immediately before the comma following the language "National Agricultural Credit Corporation", a comma and the langauge "or of a Federal home loan bank or member thereof or any institution the accounts of which are insured by the Federal Savings and Loan Insurance Corporation", and (2) by striking the language "bank or corporation" and inserting in lieu thereof the language "bank, corporation, member, or institution". Reasons The Federal home loan banks and their member institutions, and institutions the accounts of which are insured by the Federal Savings and Loan Insurance Corporation, have the same need for the protection of such a statute as the institutions now named therein, and borrowers from Federal home loan banks, member institutions, and insured savings and loan institutions have the same need for such protection as borrowers from the institutions now covered. The interest of the Federal Government in protecting such institutions and borrowers is present here also, and it is believed that the statute should be broadened in the manner and to the extent above suggested. 165. EMBEZZLEMENT AND SIMILAR MISCONDUCT Existing law Section 657 of title 18 of the United States Code: "Whoever, being an officer, agent or employee of or connected in any capacity with the Reconstruction Finance Corporation, Federal Deposit Insurance Corporation, Home Owners' Loan Corporation, Farm Credit Administration, Federal Housing Administration, Federal Farm Mortgage Corporation, Federal Crop Insurance Corporation, Farmers' Home Corporation, the Secretary of Agriculture acting through the Farmers' Home Administration, or any land bank, intermediate credit bank, bank for cooperatives or any lending, mortgage, insurance, credit or savings and loan corporation or association authorized or acting under the laws of the United States or any institution the accounts of which are insured by the Federal Savings and Loan Insurance Corporation, and whoever, being a receiver of any such institution, or agent or employee of the receiver, embezzles, abstracts, purloins or willfully misapplies any moneys, funds, credits, securities or other things of value belonging to such institution, or pledged or otherwise intrusted to its care, shall be fined not more than $5,000 or imprisoned not more than five years, or both; but if the amount or value embezzled, abstracted, purloined or misapplied does not exceed $100, he shall be fined not more than $1,000 or imprisoned not more than one year, or both." Recommendation Amend section 657 by inserting therein, immediately before the comma following the language "Federal Savings and Loan Insurance Corporation", the language "or which is a member of a Federal Home Loan Bank". Reasons The Federal Government would appear to have a legitimate interest in the protection of the financial interests of members of the Federal Home Loan Banks both as borrowers and prospective borrowers from the Banks and as institutions over which it exercises, through the Federal Home Loan Bank Board and the Federal Home Loan Banks, some degree of supervision and regulation. It is therefore believed that the section should be broadened in the manner and to the extent above suggested. 166. FALSE ENTRIES AND OTHER FALSE OR FRADULENT CONDUCT Existing law Section 1006 of title 18 of the United States Code: "Whoever, being an officer, agent or employee of or connected in any capacity with the Reconstruction Finance Corporation, Federal Deposit Insurance Corporation, Home Owners' Loan Corporation, Farm Credit Administration, Federal Housing Administration, Federal Farm Mortgage Corporation, Federal Crop Insurance Corporation, Farmers' Home Corporation, the Secretary of Agriculture acting through the Farmers' Home Administration, or any land bank, intermediate credit bank, bank for cooperatives or any lending, mortgage, insurance, credit or savings and loan corporation or association authorized or acting under the laws of the United States or any institution the accounts of which are insured by the Federal Savings and Loan Insurance Corporation, with intent to defraud any such institution or any other company, body politic or corporate, or any individual, or to deceive any officer, auditor, examiner or agent of any such institution or of department or agency of the United States, makes any false entry in any book, report or statement of or to any such institution, or without being duly authorized, draws any order or bill of exchange, makes any acceptance, or issues, puts forth or assigns any note, debenture, bond or other obligation, or draft, bill of exchange, mortgage, judgment, or decree, or, with intent to defraud the United States or any agency thereof, or any corporation, institution, or association referred to in this section, participates or shares in or receives directly or indirectly any money, profit, property, or benefits through any transaction, loan, commission, contract, or any other act of any such corporation, institution, or association, shall be fined not more than $10,000 or imprisoned not more than five years, or both.” Recommendations Amend section 1006 by inserting, immediately before the comma following the language "Federal Savings and Loan Insurance Corporation", the language "or which is a member of a Federal Home Loan Bank”. Reasons In addition to the reasons set forth above in connection with the suggested amendment to section 657 of the same title, the Federal Government would appear to have a further interest in extending the protection of section 1006 to Federal Home Loan Bank members, in that the misconduct punishable under section 1006 specifically includes cases where there is intent to deceive any officer, auditor, examiner, or agent of a department or agency of the United States. It is believed that for these reasons section 1006 should be broadened as suggested. |