{"data":{"id":"us-ky/krs-286.3-690","jurisdiction":"us-ky","citation":"KRS 286.3-690","heading":"Cease and desist orders -- Orders of suspension or removal from office --","body":"Appeal -- Enforcement of orders.\n(1) (a) If the commissioner has knowledge or reasonable cause to believe that any\nbank or trust company, or any director, officer, em ployee, agent, or other\nperson participating in the conduct of the affairs of the bank or trust company\nhas engaged in violations of law, or charter, or administrative regulation\npromulgated by the department, or in unsafe or unsound business practices,\nthe commissioner may issue and serve upon the bank, trust company, director,\nofficer, employee, agent, or other person a notice of charges containing a\nstatement of facts with respect to the alleged violations or practices.\n(b) The notice of charges issued u nder paragraph (a) of this subsection shall\ncontain the time and place at which an administrative hearing conducted in\naccordance with KRS Chapter 13B will be held to determine whether an order\nto cease and desist should issue against the bank, trust compa ny, director,\nofficer, employee, agent, or other person.\n(2) Any party or parties served with a notice of charges issued pursuant to subsection\n(1) of this section that fails to appear at the scheduled hearing personally or by a\nduly-authorized representative shall be deemed to have consented to the issuance of\nthe cease and desist order.\n(3) If the parties consent, or if upon the record made at the hearing the commissioner\nfinds that any violation or unsafe or unsound practice specified in the notice of\ncharges has been established, the commissioner may issue and serve upon the bank,\ntrust company, director, officer, employee, agent, or other person an order to cease\nand desist from any violation or practice and, further, to take affirmative action to\ncorrect the conditions resulting from any violation or practice.\n(4) If the commissioner determines that the violation or practice, as specified in the\nnotice of charges issued pursuant to subsection (1) of this section, or the\ncontinuation thereof, is likely to cause insolvency or substantial dissipation of assets\nor earnings of the bank or trust company, or is likely to otherwise seriously\nprejudice the interests of the bank's or trust company's depositors or investors, the\ncommissioner may issue an emergency order pursuant to KRS 13B.125 requiring\nthe bank, trust company, director, officer, employee, agent, or other person to cease\nand desist from any violation or practice.\n(5) (a) A cease and desist order or an emergency cease and desist order shall become\neffective upon service upon the bank or trust company.\n(b) Unless set aside, limited, or suspended, as provided in subsection (6) of this\nsection, a cease and desist order shall remain effective and enforceable\npending completion of an administrative hearing  conducted in accordance\nwith KRS Chapter 13B.\n(6) Within ten (10) days after service of an emergency cease and desist order, the party\nor parties served may apply to the Circuit Court for the county in which the bank or\ntrust company is located, or the Fr anklin Circuit Court, for an injunction setting\naside, limiting, or suspending the enforcement, operation, or effectiveness of the\norder pending completion of the administrative hearing.\n(7) In the case of violation or threatened violation of, or failure to obey, an emergency\ncease and desist order or a cease and desist order issued pursuant to this section, the\ncommissioner may apply to the Circuit Court for the county in which the bank or\ntrust company is located, or the Franklin Circuit Court, for an injunction to enforce\nthe order, and it shall be the duty of the court to issue the injunction.\n(8) (a) The commissioner may serve upon any officer, director, or employee of a\nbank or trust company a written notice of intention to remove him or her from\noffice if the commissioner determines that:\n1. Subject to paragraph (b) of this subsection, the officer, director, or\nemployee has:\na. Committed any violation of law, an administrative regulation,  or a\ncease and desist order which has become final;\nb. Engaged in or participated in any unsafe or unsound practice in\nconnection with the bank or trust company; or\nc. Committed or engaged in any act, omission, or practice which\nconstitutes a breach of hi s or her fiduciary duty as officer or\ndirector; and\n2. Any of the following are satisfied:\na. The bank or trust company has suffered or will probably suffer\nsubstantial financial loss or other damages;\nb. The interests of the bank's or trust company's depo sitors or\ninvestors could be seriously prejudiced by reason of the violation,\npractice, or breach of fiduciary duty; or\nc. The director, officer, or employee has received financial gain by\nreason of the violation, practice, or breach of fiduciary duty.\n(b) The violation, practice, or breach described in paragraph (a)1. of this\nsubsection shall be one (1):\n1. Involving personal dishonesty on the part of the director, officer, or\nemployee; or\n2. Which demonstrates a willful or continuing disregard for the saf ety or\nsoundness of the bank or trust company.\n(c) The written notice issued under paragraph (a) of this subsection shall serve to\nsuspend the officer, director, or employee from office.\n(d) The suspension referenced in paragraph (c) of this subsection shall:\n1. Become effective upon service of the notice; and\n2. Unless stayed by a court in proceedings authorized by subsection (10) of\nthis section, remain in effect pending the completion of the\nadministrative hearing under subsection (9) of this section.\n(e) The resignation of an officer, director, or employee from a bank or trust\ncompany shall not prohibit the commissioner from pursuing an action for\nremoval of the officer, director, or employee.\n(9) A notice of intention to remove an officer, director, or employee from office shall\ncontain a:\n(a) Statement of the facts constituting grounds therefor; and\n(b) Time and place at which an administrative hearing will be held in accordance\nwith KRS Chapter 13B.\n(10) Within ten (10) days after an officer, director,  or employee has been suspended\nfrom office, the officer, director, or employee may apply to the Circuit Court for the\ncounty in which the bank or trust company is located for a stay of the suspension\npending the completion of the administrative hearing pu rsuant to the notice served\nupon the officer, director, or employee.\n(11) Any person aggrieved by a final order of the commissioner issued under this section\nmay obtain a review of the order by filing in the Circuit Court for the county in\nwhich the bank o r trust company is located a petition of appeal in accordance with\nKRS Chapter 13B.\n(12) The commissioner may apply to the Circuit Court for the county in which the bank\nor trust company is located for an injunction to enforce any final order issued under\nthis section, and it shall be the duty of the court to issue the injunction.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=55160","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:11Z","sha256":"5a1a550076e5e34d798ec847155103281c953fe255de2170e79295500023b6bf","source_id":"us-ky","stale":false,"prev":"us-ky/krs-286.3-660","next":"us-ky/krs-286.3-695"},"notice":"GroundRules: Original legal text. Not legal advice."}