CEASE-AND-DESIST PROCEEDINGS.

SEC. 1371. CEASE-AND-DESIST PROCEEDINGS. (a) Grounds for Issuance Against Adequately Capitalized Enterprises.—The Director may issue and serve a notice of charges under this section upon an enterprise that is classified (for purposes of subtitle B) as adequately capitalized or upon any executive officer or director of such an enterprise, if in the determination of the Director, the enterprise, executive officer, or director is engaging or has engaged, or the Director has reasonable cause to believe that the enterprise, executive officer, or director is about to engage, in— (1) any conduct that threatens to cause a significant depletion of the core capital of the enterprise; (2) any conduct or violation that may result in the issuance of an order described in subsection (d)(1); or (3) any conduct that violates— (A) any provision of this title, the Federal National Mortgage Association Charter Act, the Federal Home Loan Mortgage Corporation Act, or any order, rule, or regulation 106 STAT. 3987under any such title or Act, except that the Director may not enforce compliance with any housing goal established under subpart B of part 2 of subtitle A of this title, with section 1336 or 1337 of this title, or with subsection (m) or (n) of section 309 of the Federal National Mortgage Association Charter Act or subsection (e) or (0 of section 307 of the Federal Home Loan Mortgage Corporation Act; or (B) any written agreement entered into by the enterprise with the Director. (b) Grounds for Issuance Against Undercapitalized, Significantly Undercapitalized, and Critically Undercapitalized Enterprises.—The Director may issue and serve a notice of charges under this section upon an enterprise classified (for purposes of subtitle B) as undercapitalized, significantly undercapitalized, or critically undercapitalized, or any executive officer or director of any such enterprise, if in the determination of the Director the enterprise, executive officer, or director is engaging or has engaged, or the Director has reasonable cause to believe that the enterprise, executive officer, or director is about to engage, in— (1) any conduct likely to result in a material depletion of the core capital of the enterprise, or (2) any conduct or violation described in paragraph (2) or (3) of subsection (a), except that the Director may not enforce compliance with any housing goal established under subpart B of part 2 of subtitle A of this title, with section 1336 or 1337 of this title, or with subsection (m) or (n) of section 309 of the Federal National Mortgage Association Charter Act or subsection (e) or (f) of section 307 of the Federal Home Loan Mortgage Corporation Act. (c) Procedure.— (1) Notice of charges.—Each notice of charges under this section shall contain a statement of the facts constituting the alleged conduct or violation and shall fix a time and place at which a hearing will be held to determine on the record whether an order to cease and desist from such conduct or violation should issue. (2) Issuance of order.—If the Director finds on the record made at such hearing that any conduct or violation specified in the notice of charges has been established (or the enterprise consents pursuant to section 1373(a)(4)), the Director may issue and serve upon the enterprise, executive officer, or director an order requiring such party to cease and desist from any such conduct or violation and to take affirmative action to correct or remedy the conditions resulting from any such con-duct or violation. (d) Affirmative Action To Correct Conditions Resulting From Violations or Activities.—The authority under this section and section 1372 to issue any order requiring an enterprise, executive officer, or director to take affirmative action to correct or remedy any condition resulting from any conduct or violation with respect to which such order is issued includes the authority— (1) to require an executive officer or a director to make restitution to, or provide reimbursement, indemnification, or guarantee against loss to the enterprise to the extent that such person— 106 STAT. 3988 (A) was unjustly enriched in connection with such con-duct or violation; or (B) engaged in conduct or a violation that would subject such person to a civil penalty pursuant to section 1376(b)(3); (2) to require an enterprise to seek restitution, or to obtain reimbursement, indemnification, or guarantee against loss; (3) to restrict the growth of the enterprise; (4) to require the enterprise to dispose of any asset involved; (5) to require the enterprise to rescind agreements or contracts; (6) to require the enterprise to employ qualified officers or employees (who may be subject to approval by the Director at the direction of the Director); and (7) to require the enterprise to take such other action as the Director determines appropriate. (e) Authority To Limit Activities.—The authority to issue an order under this section or section 1372 includes the authority to place limitations on the activities or functions of the enterprise or any executive officer or director of the enterprise. (f) Effective Date.—An order under this section shall become effective upon the expiration of the 30-day period beginning on the service of the order upon the enterprise, executive officer, or director concerned (except in the case of an order issued upon consent, which shall become effective at the time specified therein), and shall remain effective and enforceable as provided in the order, except to the extent that the order is stayed, modified, terminated, or set aside by action of the Director or otherwise, as provided in this subtitle.