TE Study Guide - Formal Administrative
Actions (15.1) Study Guide Solutions
What is a formal enforcement action? - ANSWER✔✔-Notices of orders
issued by FDIC against a bank or IAP. They are legally enforceable and
most notices and final orders are published after issuance.
When is a formal enforcement action used? - ANSWER✔✔-To reduce risks
and address deficiencies.
- Generally, for a composite rate 4 or 5
- Conditions or concern over a high volume or severity of violations.
When can the formal enforcement action be modified? - ANSWER✔✔-A
modification order must be issued to modify an existing order.
When can the formal enforcement action be terminated? - ANSWER✔✔-
When any of the following exist:
- Conditions and relevant circumstances at the bank have improved
sufficiently and formal action no longer needed.
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,- Provision of the formal action have been fully satisfied
- A new formal or informal action has been issued to replace the existing
action and address any outstanding issues.
- Conditions of the bank have deteriorated and a new action has been
initiated.
Section 8 of the FDI Act provides the FDIC's Board with broad enforcement
powers. What does Section 8a do? - ANSWER✔✔-Terminate deposit
insurance
Section 8 of the FDI Act provides the FDIC's Board with broad enforcement
powers. What does Section 8b do? - ANSWER✔✔-Issue cease and desist
orders
- Can say bank engaging in unsafe or unsound practice if 3 rated AQ,
management, earnings, or liquidity.
Section 8 of the FDI Act provides the FDIC's Board with broad enforcement
powers. What does Section 8c do? - ANSWER✔✔-Invoke temporary
(effective upon service) cease and desist orders
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, Section 8 of the FDI Act provides the FDIC's Board with broad enforcement
powers. What does Section 8e and 8g do? - ANSWER✔✔-Remove IAPs or
prohibit their participation in bank affairs
Section 8 of the FDI Act provides the FDIC's Board with broad enforcement
powers. What does Section 8s do? - ANSWER✔✔-Issue orders to C&D
from violating certain AML regulations.
Section 8 of the FDI Act provides the FDIC's Board with broad enforcement
powers. What does Section 8w do? - ANSWER✔✔-Terminate deposit
insurance for certain money laundering offenses.
Is only the FDIC Board authorized to deem something unsafe and
unsound? - ANSWER✔✔-Yes.
Can examiners use the term "unsafe and unsound" in the ROE? -
ANSWER✔✔-No, they can use undesirable, unacceptable, imprudent, etc.
Does the ROE serve as primary evidence to support formal actions? -
ANSWER✔✔-Yes.
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Actions (15.1) Study Guide Solutions
What is a formal enforcement action? - ANSWER✔✔-Notices of orders
issued by FDIC against a bank or IAP. They are legally enforceable and
most notices and final orders are published after issuance.
When is a formal enforcement action used? - ANSWER✔✔-To reduce risks
and address deficiencies.
- Generally, for a composite rate 4 or 5
- Conditions or concern over a high volume or severity of violations.
When can the formal enforcement action be modified? - ANSWER✔✔-A
modification order must be issued to modify an existing order.
When can the formal enforcement action be terminated? - ANSWER✔✔-
When any of the following exist:
- Conditions and relevant circumstances at the bank have improved
sufficiently and formal action no longer needed.
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 1/25
,- Provision of the formal action have been fully satisfied
- A new formal or informal action has been issued to replace the existing
action and address any outstanding issues.
- Conditions of the bank have deteriorated and a new action has been
initiated.
Section 8 of the FDI Act provides the FDIC's Board with broad enforcement
powers. What does Section 8a do? - ANSWER✔✔-Terminate deposit
insurance
Section 8 of the FDI Act provides the FDIC's Board with broad enforcement
powers. What does Section 8b do? - ANSWER✔✔-Issue cease and desist
orders
- Can say bank engaging in unsafe or unsound practice if 3 rated AQ,
management, earnings, or liquidity.
Section 8 of the FDI Act provides the FDIC's Board with broad enforcement
powers. What does Section 8c do? - ANSWER✔✔-Invoke temporary
(effective upon service) cease and desist orders
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 2/25
, Section 8 of the FDI Act provides the FDIC's Board with broad enforcement
powers. What does Section 8e and 8g do? - ANSWER✔✔-Remove IAPs or
prohibit their participation in bank affairs
Section 8 of the FDI Act provides the FDIC's Board with broad enforcement
powers. What does Section 8s do? - ANSWER✔✔-Issue orders to C&D
from violating certain AML regulations.
Section 8 of the FDI Act provides the FDIC's Board with broad enforcement
powers. What does Section 8w do? - ANSWER✔✔-Terminate deposit
insurance for certain money laundering offenses.
Is only the FDIC Board authorized to deem something unsafe and
unsound? - ANSWER✔✔-Yes.
Can examiners use the term "unsafe and unsound" in the ROE? -
ANSWER✔✔-No, they can use undesirable, unacceptable, imprudent, etc.
Does the ROE serve as primary evidence to support formal actions? -
ANSWER✔✔-Yes.
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 3/25
