at which a hearing shall be held thereon. The hearing shall be fixed for a date not earlier than 30 days nor later than 60 days after service of such notice, unless an earlier or later date is set by the Corporation at the request of (1) such director, officer, or other person, and for good cause shown, or (2) the Attorney General of the United States. Unless such director, officer, or other person consents to another place, such hearing shall be held in the Federal judicial district or in the territory (as defined in subsection (q) of section 407 of the National Housing Act, as amended) in which the principal office of the institution involved is located. Such hearing shall be conducted in the manner provided in Part 509 of this chapter.

(c) Issuance of order of removal and/ or prohibition. Unless such director, officer, or other person appears at the hearing in person or by a duly authorized representative, he shall be deemed to have consented to the issuance of an order of removal and/or prohibition. In the event of consent, or if upon the record made at any such hearing the Corporation finds that any of the grounds specified in such notice has been established, the Corporation may issue such orders of suspension or removal from office, and/or prohibition from participation in the conduct of the affairs of the institution, as it may deem appropriate.

(d) Effectiveness of order. An order of suspension or removal from office, and/ or prohibition from participation in the conduct of the affairs of an institution, issued pursuant to paragraph (c) of this section, shall become effective at the expiration of 30 days after service upon the institution and the director, officer, or other person concerned (except in the case of an order issued upon consent, which shall become effective at the time specified therein). Such order shall remain effective and enforceable except to such extent as it is stayed, modified, terminated, or set aside by action of the Corporation or a reviewing court. $566.4 Temporary suspension and/or prohibition.

(a) Issuance of notice. In respect to any director or officer of an insured institution, or any other person who is served with a notice provided for in $566.3(a), the Corporation may, if it deems it necessary for the protection of the institution or the interests of its in

sured members or of the Corporation, by written notice to such effect served upon such director, officer, or other person, suspend him from office and/or prohibit him from further participation in any manner in the conduct of the affairs of the institution. Copies of any such notice shall also be served upon the institution of which he is a director or officer or in the conduct of whose affairs he has participated.

(b) Effectiveness of notice. Any suspension from office and/or prohibition from participation in the conduct of the affairs of an institution, pursuant to a notice served under paragraph (a) of this section, shall become effective upon service of such notice and, unless stayed by a court in proceedings authorized by paragraph (5) of subsection (g) of section 407 of the National Housing Act, as amended, shall remain in effect pending the completion of the administrative proceedings held pursuant to the notice served under § 566.3(b) and until such time as the Corporation shall dismiss the charges specified in such notice, or, if an order of removal and/or prohibition is issued against the director, officer, or other person, until the effective date of any such order.

§ 566.5 Suspension and removal where felony charged.

(a) Suspension and/or temporary prohibition. Whenever any director or officer of an insured institution, or other person participating in the conduct of the affairs of an insured institution, is charged in any information, indictment, or complaint authorized by a U.S. attorney, with the commission of or participation in a felony involving dishonesty or breach of trust, the Corporation may, by written notice served upon such director, officer, or other person, suspend him from office and/or prohibit him from further participation in any manner in the conduct of the affairs of the institution. A copy of such notice shall also be served upon the institution. Such suspension and/or prohibition shall remain in effect until such information, indictment, or complaint is finally disposed of or until terminated by the Corporation.

(b) Removal and/or permanent prohibition. In the event that a judgment of conviction with respect to such offense is entered against such director, officer, or other person, and at such time as such judgment is not subject to further appellate review, the Corporation may issue

and serve upon such director, officer, or other person an order removing him from office and/or prohibiting him from further participation in any manner in the conduct of the affairs of the institution except with the consent of the Corporation. A copy of such order shall also be served upon such institution, whereupon such director or officer shall cease to be a director or officer of the institution. A finding of not guilty or other disposition of the charge shall not preclude the Corporation from thereafter instituting proceedings to remove such director, officer, or other person from office and/or to prohibit further participation in the conduct of institution affairs, pursuant to the provisions of § 566.3.

§ 566.6 Notice to State authorities.

In connection with any proceeding under § 566.1, § 566.2, § 566.3, or § 566.4, involving a State-chartered institution or any director, officer, or other person participating in the conduct of its affairs, the Corporation shall provide the appropriate State supervisory authority with notice of its intent to institute such a proceeding and the grounds therefor. Unless within such time as the Corporation deems appropriate in the light of the circumstances of the case (which time shall be specified in such notice), satisfactory corrective action is effectuated by action of the State supervisory authority, the Corporation may proceed as provided in said sections.

Any service required or authorized to be made by the Corporation under the provisions of this part shall be made as provided in Part 509 of this chapter. Copies of any notice or order served upon any State-chartered institution or any director, officer, or other person participating in the conduct of its affairs, pursuant to the provisions of this part, shall also be sent to the appropriate State supervisory authority.

§ 566.8 Application of the supervisory act with respect to service corporations.

(a) Each insured institution, or director, officer, employee, or agent thereof, shall take whatever action may be necessary and within its or his power to assure that any service corporation of such insured institution does not

(1) violate any law, rule, or regulation applicable to such service corporation;

(2) violate any charter provision or bylaw of such service corporation;

(3) violate any condition applicable to such service corporation and imposed in writing by the Board or Corporation or State supervisory authority in connection with the granting of any application or other request by such institution or service corporation;

(4) violate any written agreement applicable in whole or in part to such service corporation and entered into by such insured institution or service corporation with the Board or the Corporation or State supervisory authority;

(5) violate any cease-and-desist order which has become final and is applicable in whole or in part to such service corporation; or

(6) engage in any practice which is unsafe or unsound with respect to such service corporation or the insured institution.

(b) A violation of paragraph (a) of this section is a violation of a regulation within the meaning of section 5(d) of the Home Owners' Loan Act of 1933, as amended, and section 407 of the National Housing Act, as amended, and may constitute an unsafe or unsound practice, a breach of fiduciary duty, or conduct or practice with respect to another savings and loan association or other business institutions within the meaning of said sections of said Acts.

[38 FR 26112, Sept. 18, 1973]

PART 567-AMENDMENT OF RULES

AND REGULATIONS

§ 567.1 Amendment of rules and regu lations.

The rules and regulations in this subchapter, subject to any specific provision contained in this subchapter, may be amended in whole or in part at any time in accordance with the provisions set forth in Subchapter A of this chapter. (Secs. 402-407, 48 Stat. 1256, as amended, 1257, as amended, 1258, as amended, 1260, amended; 12 U.S.C. 1725-1727, 1730, Reorg. Plan No. 3 of 1947; 3 CFR 1943-1948 Comp.) [23 F.R. 9918, Dec. 23, 1958]

as

PART 568-SERVICE OF PROCESS UPON CORPORATION

§ 568.1 Agents for service of process.

Persons desiring to serve process upon the Federal Savings and Loan Insurance Corporation in any jurisdiction may obtain the name and address of the

per agent by communicating with the retary of the Federal Home Loan nk Board, Washington, D.C., or the esident of the Federal Home Loan nk in the district in which such juristion is located. Upon a request for name of an agent upon whom service process may be made, the Federal wings and Loan Insurance Corporation All promptly designate such an agent any jurisdiction where there is not at at time such an agent.

c. 402, 48 Stat. 1256, as amended; 12 5.O. 1725, Reorg. Plan No. 3 of 1947; 8 CFR, 3-1948 Comp.) [23 FR. 9918, Dec. 23, 8]

569.1

Definitions.

As used in this part

(a) Security holder. The term "secuty holder" means any person having ne right to vote in the affairs of an inured institution by virtue of (1) ownerip of any security of the institution or 2) any indebtedness to the institution. (b) Person. The term "person" inludes, in addition to natural persons, orporations, partnerships, pension unds, profit-sharing funds, trusts, and ny other group of associated persons of whatever nature.

(c) Proxy. The term "proxy" includes very form of authorization by which a person is, or may be deemed to be, desigated to act for the security holder in the exercise of his voting rights in the affairs of an insured institution. Such an authorization may take the form of failure to dissent or object.

(d) Solicit; solicitation. The term "solicit" and "solicitation" refer to (1) any request for a proxy whether or not accompanied by or included in a form of proxy; (2) any request to execute, not execute, or revoke a proxy; or (3) the furnishing of a form of proxy or other communication to security holders under circumstances reasonably calculated to

result in the procurement, withholding, or revocation of a proxy. The terms do not apply, however, to the furnishing of a form of proxy to a security holder upon the request of such security holder or to the performance by any person of ministerial acts on behalf of a person soliciting a proxy.

§ 569.2 Form of proxies.

Every form of proxy solicited on or after December 1, 1971, by any person shall conform to the following requirements:

(a) The proxy shall be revocable at will by the person giving it. The power to revoke may not be conditioned on any event or occurrence or be otherwise limited; except that, in the case of a proxy relating to capital stock. if such proxy is coupled with an interest, states such fact on its face, and is valid under the laws of the State in which it is to be exercised, such proxy may be made irrevocable to the extent permitted by such State law.

(b) The proxy may not be part of any other document or instrument (such as an account card).

(c) The proxy shall be clearly labeled "Revocable Proxy" in boldface type (at least as large as 18 point).

§ 569.3 Holders of proxies.

(a) No proxy may designate as a holder any corporation or partnership (including any person acting on behalf of any corporation or partnership), or any person other than a living, natural person. However, a proxy may designate:

(1) The holder of a specified title or office, if a natural person; or

(2) A committee composed solely of natural persons, including a committee composed of the board of directors of an insured institution.

(b) With respect to any proxy outstanding on October 15, 1971, no designation of a living, natural person shall be ineffective under this section solely for the reason that a corporation or partnership (including any person acting on behalf of any corporation or partnership), or any person other than a living, natural person, is named as an alternate or substitute holder.

§ 569.4 Proxy soliciting material.

No solicitation of a proxy shall be made by means of any statement, form of proxy, notice of meeting, or other communication, written or oral, which:

AUTHORITY: The provisions of this Part 5698 issued under secs. 402, 406, 48 Stat. 1256, 1259, as amended; 12 U.S.C. 1725, 1729. Reorg. Plan No. 3 of 1947; 3 CFR, 1943-1948 Comp., p. 1071.

SOURCE: The provisions of this Part 569a appear at 33 F.R. 14366, Sept. 24, 1968, unless otherwise noted.

§ 569a.1 Grounds for appointment of Receiver.

In the event the Board determines:

(a) That (1) a conservator, receiver or other legal custodian (whether or not the Corporation) has been or is hereafter appointed for an insured institution which is not a Federal savings and loan association other than by the Board (whether or not such institution is in default) and that the appointment of such conservator, receiver, or custodian, or any combination thereof, has been outstanding for a period of at least 15 onsecutive days, or (2) an insured in

stitution (other than a Federal sav and loan association) has been close or under the laws of any State, the monwealth of Puerto Rico, the territ and possessions of the United Stat any place subject to the jurisdicti the United States;

(b) That one or more of the gr specified in paragraph (6)(A) of s 5(d) of the Home Owners' Loan 1933, existed with respect to such tution at the time a conservator, re or other legal custodian was app or at the time such institutio closed, or exists thereafter duri appointment of the conservator, r or other legal custodian or while stitution is closed; and

(c) That one or more of the of savings accounts in such insti unable to obtain a withdrawa account, in whole or in part;

the Board shall have exclusiv and jurisdiction to appoint the tion as sole Receiver for such in As used in this part, the term means an adjudication or oth determination of a court of jurisdiction or other public pursuant to which a conser ceiver, or other legal custod pointed for an insured institut purpose of liquidation.

§ 569a.2 Appointment of Rec

If the Board makes the dete specified in § 569a.1, the Bo order appoint the Federal S Loan Insurance Corporation ceiver for such insured instit purpose of liquidation, and si ment may be ex parte and wi § 569a.3 Notice of appointi

In the event that the Boa Receiver for an insured ins suant to § 569a.2, the Seci Board shall mail a certifie order of appointment by to the address of the ins shall appear on the records to any supervisory or regu ity to which such institutic fore subject, to any previo receiver, or other legal cu such insured institution, a° or other authority to whic conservator, receiver, or c ject. Notice of such appoi filed forthwith for pub. FEDERAL REGISTER.

§ 569a.4 Possession by Receiver.

The Corporation shall take possession promptly of the insured institution for which it has been appointed Receiver by service of a certified copy of the Board's order of appointment upon the insured institution or upon the conservator, receiver, or custodian of such institution. "Service" as used in the preceding sentence is accomplished by leaving a certified copy of said order at the principal office of the insured institution or by handing a certified copy of said order to the conservator, receiver, or custodian of such insured institution or to the officer or employee of the insured institution or of the conservator, receiver, or custodian who shall be in the principal office of the institution and appears to be in charge of such office. The Receiver shall thereafter promptly notify in writing by certified mail the court or other public authority having jurisdiction over such conservator, receiver, or custodian and any supervisory or regulatory authority to which the insured institution was theretofore subject of its possession of the insured institution. Immediately upon taking possession of any insured institution, the Corporation as Receiver shall forthwith take possession of and title to books, records, and assets of every description of such institution and of all offices of such institution. The Corporation as Receiver, by operation of law and without any conveyance or other instrument, act or deed, shall succeed to (a) all the rights, titles, powers, and privileges of the insured institution, its members, holders of savings accounts and nonwithdrawable accounts, its officers and directors or any of them, and (b) the titles to the books, records, and assets of every description of any conservator, receiver, or other legal custodian of such institution appointed under State law. Such members. holders of savings accounts and nonwithdrawable accounts, officers or directors, or any of them, or any such conservator, receiver, or other legal custodian shall not thereafter have or exercise any such rights, powers, or privileges or act in connection with any asset or property of any nature of the institution in receivership.

§ 569a.5 Procedure on taking possession. Upon taking possession as provided in the first sentence of § 569a.4, the Receiver shall forthwith

(a) Post a notice in substantially the following form on the door of the princi

(b) File with the Secretary to the Board a statement that it has taken possession of such institution and of the time of such taking of possession; and such statement shall be conclusive evidence of such taking of possession and of the time of such taking of possession; and

(c) Notify, by certified mail or telegraph, all banks, trust companies, and all other individuals, partnerships, corporations and associations, known to the Receiver to be holding or in possession of any assets of such insured institution that the Federal Savings and Loan Insurance Corporation as Receiver has succeeded to all the rights, titles, powers, and privileges of such institution, and to the titles of any conservator, receiver, or other legal custodian of such institution appointed under State law.

§ 5698.6 Powers and duties as Receiver.

The Receiver shall promptly have an inventory and an audit made, either by an independent Certified Public Accountant or as otherwise directed by the Board, of the assets of such institution as of the date of such taking possession, showing the value as carried on the books of the institution, and the security therefor, if any, in whatever form the same shall exist, with a brief description of each such asset and such security. Such assets may be listed in such groups or classes as shall afford full information as to their character and book value, and a record shall be included of the creditor and other liabilities of the institution. One copy of such inventory shall be filed promptly with the Secretary to the Board, and one copy shall be retained in the principal office for liquidation of the institution, so long as such office is maintained. Subject to such limitations, as are contained in this part

(a) General. The Receiver shall collect all obligations and money due such insured institution, and may: