NCJ Number
129584
Date Published
1991
Length
9 pages
Annotation
The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), signed into law in August 1989, dramatically expands the enforcement powers of Federal banking agencies and makes significant changes to Federal criminal law related to banking crimes.
Abstract
FIRREA has increased criminal penalties for banking law violations to a maximum fine of $1 million or imprisonment of 20 years or both. The act requires the U.S. Sentencing Commission to promulgate sentencing guidelines that provide for a substantial period of incarceration, if the particular offense jeopardizes the safety and soundness of a federally-insured financial institution. Civil forfeiture of real or personal property is possible under FIRREA if it is derived from proceeds traceable to a banking law violation. In a major deviation from historical practice, the disclosure of certain matters occurring before a grand jury is authorized by FIRREA. The act establishes a 3-tier approach to civil money penalties and makes them applicable to any insured depository institution-affiliated party. The 3-tier system provides for fines of $5,000; $25,000; or $1,000,000 per day of violation. FIRREA also authorizes banking regulators to offer rewards to persons who provide original information leading to the recovery of over $50,000 in criminal and civil penalties. Further, an employee who provides information on possible violation of any law by the financial institution or its officers, directors, and employees is protected from discrimination. The most important changes in FIRREA involve the lengthened statute of limitations, erosion of the government's grand jury secrecy obligations, and special grand jury restrictions imposed on financial institution employees. 14 notes