Sec. 11. Enforcement
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/bill/118/s/4155/is/section-11A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
The applicable payment stablecoin regulator may bring an action in the appropriate district court of the United States, or the court of any territory of the United States, to seek an order for the enforcement of this Act and such court shall have jurisdiction and power to order and require compliance herewith, including through injunctive relief. No person who has been convicted of any criminal offense involving insider trading, embezzlement, cybercrime, money laundering, or financing of terrorism, or of felony financial fraud may serve as an executive officer or a person with control of more than 5 percent of the shares of a payment stablecoin issuer.
The Board shall provide by rule a process to apply for a waiver of the prohibition under paragraph
(1)and may provide for de minimis exceptions to the prohibition under such paragraph that would not require a waiver. The applicable payment stablecoin regulator may prohibit a payment stablecoin issuer from issuing payment stablecoins under a registration or authorization if the regulator determines that the payment stablecoin issuer, or an institution-affiliated party, is— violating or has violated an applicable law, regulation, or order; violating or has violated any condition imposed in writing by the Comptroller, State bank supervisor, or Board in connection with a written agreement entered into between the payment stablecoin issuer and the appropriate regulator or a condition imposed in connection with any application or other request; or operating in an unsafe or unsound manner. If the applicable payment stablecoin regulator has reasonable cause to believe that a payment stablecoin issuer or any institution-affiliated party is violating or has violated this Act, any rule or order issued pursuant to this Act, or any written agreement entered into with the Comptroller, State bank supervisor, or Board, or condition imposed in writing in connection with any application or other request, the applicable payment stablecoin regulator may, by provisions that are mandatory or otherwise, order the payment stablecoin issuer or institution-affiliated party of the payment stablecoin issuer to— cease and desist from such violation or practice; take affirmative action to correct the conditions resulting from any such violation or practice; or take such other action, as determined to be appropriate. The applicable payment stablecoin regulator may remove an institution-affiliated party from their position or office or prohibit further participation of the institution-affiliated party in the affairs of the payment stablecoin issuer or in the affairs of all payment stablecoin issuers if the applicable payment stablecoin regulator determines that— the institution-affiliated party has, directly or indirectly, committed a violation or attempted violation of this Act; the institution-affiliated party has committed a violation of any provision of sub-chapter II of chapter 53 of title 31, United States Code; or the institution-affiliated party is otherwise disqualified pursuant to subsection (b). With respect to a payment stablecoin issuer, if the applicable payment stablecoin regulator has reasonable cause to believe that the payment stablecoin issuer or an institution-affiliated party of the payment stablecoin issuer is engaging or has engaged in an unsafe or unsound practice, the applicable payment stablecoin regulator shall have the same authorities and responsibilities as the Federal Deposit Insurance Corporation with respect to an insured depository institution and an institution-affiliated party under section 8 of the Federal Deposit Insurance Act ( 12 U.S.C. 1818 ). For each violation or attempted violation of this Act, the applicable payment stablecoin regulator shall provide notice to the payment stablecoin issuer and any institution-affiliated party of the payment stablecoin issuer, which shall include— a statement of facts constituting the identified violation or attempted violation; and a notice of a hearing that will be held with respect to the violation or attempted violation, including the time and place of the hearing, that is set not less than 30 days after the date of the notice. A hearing described in paragraph
(1)shall be held in a Federal judicial district or in the territory in which the payment stablecoin issuer or institution-affiliated party is located, unless the issuer or institution-affiliated party consents to another place, and shall be conducted in accordance with the provisions of chapter 5 of title 5, United States Code. Not later than 90 days after the applicable payment stablecoin regulator has notified the parties that the case has been submitted for a final decision, the applicable payment stablecoin regulator shall render a written decision that includes a statement of the findings of fact upon which the decision is predicated and shall be served upon each party to the proceeding an order or orders consistent with the provisions of this section. An order issued under this subsection shall— be effective as of the date set by the appropriate payment stablecoin regulator after the date of the decision, except in the case of a cease-and-desist order issued upon consent, which shall become effective at the time specified therein; and remain effective and enforceable as provided in the order, except to such extent as it is stayed, modified, terminated, or set aside by the action of a regulator or a reviewing court. Unless a payment stablecoin issuer or institution-affiliated party of such issuer appears at the hearing, personally or by a duly authorized representative, such issuer or party shall be deemed to have consented to the suspension or revocation of registration or authorization, a cease-and-desist order, or removal, as applicable. With respect to a final order under this section not issued by consent of a payment stablecoin issuer or an institution-affiliated party, an aggrieved person may, not later than 30 days after the date of service of the order and written decision, file a petition for review in an appropriate court of appeals of the United States, or in the United States Court of Appeals for the District of Columbia Circuit to request that the order be modified, terminated, or set aside. Upon the filing of a petition under paragraph
(1)with the appropriate court, the clerk of that court shall transmit a copy of the petition to the applicable payment stablecoin regulator which shall transmit to the court the record of the proceeding relating to the petition, as provided in section 2112 of title 28, United States Code. Upon the filing of a petition under paragraph
(1)with the appropriate court, that court shall have exclusive jurisdiction to— review the final action, as provided in chapter 7 of title 5, United States Code; and affirm, modify, terminate, or set aside, in whole or in part, the applicable order. Except upon review by the Supreme Court upon writ of certiorari, as provided in section 1254 of title 28, United States Code, the judgment and decree of the court is final. The commencement of proceedings for judicial review under subsection
(h)shall not, unless specifically ordered by the appropriate court, operate as a stay of any order. The applicable payment stablecoin regulator may, in its discretion, apply to the appropriate United States district court or the United States court of any territory, for the enforcement of any effective and outstanding notice or order issued under this section, and such court shall have jurisdiction and power to order and require compliance herewith, but, except as otherwise provided in this section, no court shall have jurisdiction to affect by injunction or otherwise the issuance or enforcement of any notice or order under this section, or to review, modify, suspend, terminate, or set aside any such notice or order. If the applicable payment stablecoin regulator determines that a violation or attempted violation identified under this section, or the continuation thereof, is likely to cause a receivership, insolvency, or significant dissipation of assets or earnings of a payment stablecoin issuer, or is likely to weaken the condition of the payment stablecoin issuer or otherwise prejudice the interests of its customers prior to the completion of the proceedings conducted pursuant to subsection (h), the applicable payment stablecoin regulator may issue a temporary order requiring a payment stablecoin issuer or institution-affiliated party to cease and desist from any such violation or practice and to take affirmative action to prevent or remedy such receivership, insolvency, dissipation, condition, or prejudice pending completion of such proceedings. An order described under paragraph
(1)shall become effective upon service on the payment stablecoin issuer or the institution-affiliated party and, unless set aside, limited, or suspended by a court, remain effective and enforceable pending the completion of the administrative proceedings pursuant to such notice and until such time as the applicable payment stablecoin regulator removes the suspension or the cease-and-desist order has expired. Not later than 10 days after the date a payment stablecoin issuer concerned or any institution-affiliated party has been served with a temporary cease-and-desist order, the payment stablecoin issuer or such party may apply to the appropriate United States district court, or the United States District Court for the District of Columbia, for an injunction setting aside, limiting, or suspending the enforcement, operation, or effectiveness of such order pending the completion of the administrative proceeding pursuant to the notice of charges served upon the payment stablecoin issuer or such party under subsection (g)(4), and such court shall have jurisdiction to issue such injunction. In the case of a violation or attempted violation of, or failure to obey, a temporary cease-and-desist order issued pursuant to this section, the applicable payment stablecoin regulator may apply to the appropriate United States district court, or the United States court of any territory, for an injunction to enforce such order, and, if the court determines that there has been such violation or attempted violation or failure to obey, it shall be the duty of the court to issue such injunction. Any payment stablecoin issuer that fails to obtain the applicable registration or authorization under this Act, or an institution-affiliated party that knowingly participates in such a failure, shall be liable for a civil penalty of not more than $1,000,000 to the Board for each day during which such failure continues. The Board may also seek appropriate relief under subsection
(a)for failure of a payment stablecoin issuer or other person to register or be authorized under section 6 or 7, as appropriate. Except as provided in subsection (m), a payment stablecoin issuer or institution-affiliated party of such payment stablecoin issuer that violates this Act or any rule or order issued pursuant to this Act, or that violates any condition imposed in writing in connection with a written agreement entered into between the payment stablecoin issuer and the applicable payment stablecoin regulator, or a condition imposed in connection with any application or other request, shall be liable for a civil penalty of up to $100,000 for each day during which the violation continues. Except as provided in subsection (m), a payment stablecoin issuer or any institution-affiliated party of such payment stablecoin issuer that knowingly participates in a violation of any provision of this Act, or any rule or order issued pursuant thereto, is liable for a civil penalty of up to an additional $100,000 for each day during which the violation continues. Any civil monetary penalty imposed under this section may be assessed and collected by the applicable payment stablecoin regulator by following the procedure set forth under subsection (g). The applicable payment stablecoin regulator may commence an action for a civil penalty resulting from a violation of this Act at any time before the end of the 6-year period beginning on the date of such violation. If a payment stablecoin issuer or institution-affiliated party fails to pay a civil monetary penalty assessed under this section, the applicable payment stablecoin regulator shall recover the amount assessed by action in the appropriate United States district court. The validity and appropriateness of a civil monetary penalty assessed under this section shall not be subject to review. In any action brought pursuant to this subsection, or in an action brought in aid of, or to enforce an order in, any administrative or other civil action for money damages, restitution, or civil money penalties, the court may, upon application, issue a restraining order that— prohibits any person subject to the proceeding from withdrawing, transferring, removing, dissipating, or disposing of any assets; and appoints a temporary receiver to administer the restraining order. The resignation, termination of employment or participation, or separation of an institution-affiliated party (including a separation caused by the closing of a payment stablecoin issuer) shall not affect the jurisdiction and authority of the applicable payment stablecoin regulator to issue any notice or order and proceed under this section against any such party, if such notice or order is served before the end of the 6-year period beginning on the date such party ceased to be an institution-affiliated party with respect to the payment stablecoin issuer. In exercising authority under this section with respect to a depository institution that issues a payment stablecoin under section 7 of this Act, the Comptroller or State bank supervisor, as applicable, and the Board shall endeavor to act jointly whenever possible. Prior to opening an investigation, beginning the process of an enforcement action or exercising other authority under this section, the applicable payment stablecoin regulator shall provide notice and consult with the other applicable regulator relating to the necessity and scope of the action. After an initial consultation under this paragraph, the applicable payment stablecoin regulator may exercise authority independently under this section, but shall keep the other applicable regulator reasonably informed about the progress of the action and shall provide not less than 7 days’ prior notice of the timing and scope of the final action.
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