(a) Willful failure to comply with disclosure and reporting obligations.
(1) If the Board determines
that a NGEP has willfully failed to comply in a material way with
section 207.6 or 207.7, the Board will notify the NGEP in writing
of that determination and provide the NGEP a period of 90 days (or
such longer period as the Board finds to be reasonable under the circumstances)
to comply.
(2) If the
NGEP does not comply within the time period established by the Board,
the agreement shall thereafter be unenforceable by that NGEP by operation
of section 48 of the Federal Deposit Insurance Act (12 U.S.C. 1831y).
(3) The Board may assist
any insured depository institution or affiliate that is a party to
a covered agreement that is unenforceable by a NGEP by operation of
section 48 of the Federal Deposit Insurance Act (12 U.S.C. 1831y)
in identifying a successor to assume the NGEP’s responsibilities
under the agreement.
(b) Diversion of funds. If a court
or other body of competent jurisdiction determines that funds or resources
received under a covered agreement have been diverted contrary to
the purposes of the covered agreement for an individual’s personal
financial gain, the Board may take either or both of the following
actions:
(1) order the individual
to disgorge the diverted funds or resources received under the agreement;
(2) prohibit the individual
from being a party to any covered agreement for a period not to exceed
10 years.
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(c) Notice
and opportunity to respond. Before making a determination under
paragraph (a)(1) of this section, or taking any action under paragraph
(b) of this section, the Board will provide written notice and an
opportunity to present information to the Board concerning any relevant
facts or circumstances relating to the matter.
(d) Inadvertent or de minimis errors. Inadvertent or de minimis errors in annual reports or other documents
filed with the Board under section 207.6 or 207.7 will not subject
the reporting party to any penalty.
(e) Enforcement of provisions in covered agreements. No provision of this part shall be construed as authorizing the
Board to enforce the provisions of any covered agreement.
