32-1-905. Notice of intention to remove board member or officer or to prohibit participation -- suspension. (1) The director may serve upon a board member or officer of an institution a written notice of intention to remove him from office whenever the director has reasonable cause to believe:
     (a) the board member or officer has:
     (i) committed any violation of law involving dishonesty or breach of trust;
     (ii) violated a cease and desist order which has become final;
     (iii) engaged or participated in any unsafe or unsound practice in connection with the institution; or
     (iv) committed or engaged in any act, omission, or practice which constitutes a breach of his fiduciary duty as a board member or officer of the institution; and
     (b) the institution has suffered or will probably suffer substantial financial loss or other damage or the interest of its depositors could be seriously prejudiced by reason of the violation, practice, or breach of fiduciary duty involving personal dishonesty on the part of such board member or officer.
     (2) Whenever in the opinion of the director any board member or officer of an institution has, by conduct or practice with respect to another institution or business organization which has resulted in substantial financial loss or other damage to that institution or business organization, evidenced his personal disability and unfitness to continue as a board member or officer of the institution, and whenever the director has reasonable cause to believe that any other person participating in the conduct of the affairs of an institution has, by conduct or practice with respect to such institution, another institution, or other business organization which has resulted in substantial financial loss or other damage to the institution or business organization, evidenced his personal disability and unfitness to participate in the conduct of the affairs of such institution, the director may serve upon the board member, officer, or other person a written notice of intention to remove such person from office or to prohibit his further participation in any manner in the conduct of the affairs of the institution.
     (3) A notice of intention to remove a board member, officer, or other person from office or to prohibit his participation in the conduct of the affairs of an institution shall contain a statement of the facts constituting grounds therefor, and shall fix a time and place at which a hearing will be held thereon. The hearing shall be held not earlier than 30 days or later than 60 days after the date of service of the notice, unless an earlier or later date is set by the director at the request of the board member, officer, or other person and for good cause shown.
     (4) Unless the board member, officer, or other person appears at the hearing in person or by a duly authorized representative, he shall be considered to have consented to the issuance of an order of removal or prohibition. In the event of consent or if upon the record made at the hearing the director finds that any of the grounds specified in the notice have been established by the preponderance of the evidence, the director may issue such orders of suspension, removal from office, or prohibition from participation in the conduct of the affairs of the institution as he considers appropriate. The order becomes effective 30 days after service upon the institution and the board member, officer, or other person concerned, except in the case of an order issued upon consent which becomes effective at the time specified therein. The order remains effective and enforceable until it is stayed, modified, terminated, or set aside by action of the director or a reviewing court.

     History: En. Sec. 5, Ch. 76, L. 1979.