1. (a) Any officer or director found by the Bank Commissioner to be violating state or federal law, State Bank Department rules, or basic principles of safety and soundness in the operation of a bank may be reported in writing to the directors of the bank of which he or she is an officer or director, or the commissioner may cause such officer or director to be removed from service to the institution by means of a cease and desist order issued by the commissioner against the bank and its board of directors.

2. (b) If the commissioner reports such activities in writing to the bank's board of directors and the board neglects or refuses to remove such officer or director, the directors may be:

   1. (1) Individually liable for any loss that may occur to the bank by reason of their lack of action; and
   2. (2) Subject to the assessment of monetary penalties for such failure by the commissioner.

Codification Notes: This section was promulgated as Section 48-322.2 of the State Bank Department Rules prior to codification into the Code of Arkansas Rules. This section as promulgated prior to codification into the Code of Arkansas Rules provided as follows: "(Reference A.C.A. § 23-48-322)"