(a) The board of directors shall have the authority to establish by rule or regulation conditions and procedures under which qualified public depositories may be suspended or disqualified and assessed administrative penalties in lieu of suspension or disqualification for violations of this chapter or violations of the board's standards, rules, regulations, and orders pursuant to this chapter. The State Treasurer shall have the authority to require that qualified public depositories violating this chapter or any of the board's standards, rules, regulations, and orders make restitution, with interest at the legal rate, for losses of public depositors or to the Loss Payment Fund, and to issue cease and desist orders against any qualified public depository violating or believed to be violating any provisions of this chapter or any of the board of directors' or the State Treasurer's standards, rules, regulations, and orders pursuant to this chapter and to impose administrative penalties against any qualified public depository violating any cease and desist order issued by the State Treasurer.

(b) The suspension or disqualification of a financial institution as a qualified public depository shall be by order of the State Treasurer, and such order shall be mailed to the qualified public depository by registered or certified mail. Within the time and in the manner specified in the order of suspension or disqualification, the financial institution shall provide to the State Treasurer a report listing the names and addresses of each public depositor having public deposits with the financial institution and such other relevant information as the State Treasurer may request, and the State Treasurer shall provide for the prompt notification to each public depositor having public deposits with a suspended or disqualified financial institution of any such suspension or disqualification.

(c) The procedures for suspension or disqualification shall be as set forth in Chapter 22 of this title, and in the rules of the board of directors adopted pursuant to this chapter.

(d) Whenever the State Treasurer determines that an immediate danger to the public health, safety, or welfare exists, the board may take any appropriate action that may be available under the provisions of Chapter 22 of this title.

(e) If the State Treasurer finds that one or more grounds exist for the suspension or disqualification of a qualified public depository, the State Treasurer, in lieu of such suspension or disqualification, may impose an administrative penalty upon the qualified public depository as follows:

(1) With respect to any nonwillful violation, such penalty, exclusive of any restitution found to be due, may not exceed two hundred fifty dollars ($250) for each violation. Each day a violation continues constitutes a separate violation; provided, however, that the maximum aggregate penalty for any continuing violation under this subdivision shall be five thousand dollars ($5,000) irrespective of the number of days the violation continues prior to the assessment of the penalty.

(2) With respect to any knowing and willful violation of a lawful order or rule, including, without limitation, the failure to make restitution in accordance with a lawful order of the State Treasurer following notification to the qualified public depository, the State Treasurer may impose a penalty upon the qualified public depository in an amount not exceeding two thousand five hundred dollars ($2,500) for each violation. Each day a violation continues constitutes a separate violation; provided, however, that the maximum aggregate penalty for any single continuing violation under this subdivision shall be twenty thousand dollars ($20,000) irrespective of the number of days the violation continues prior to the assessment of the penalty.

(3) A qualified public depository or custodian that violates subsection (f) of Section 41-14A-5 is subject to an administrative penalty in an amount not exceeding the greater of two thousand five hundred dollars ($2,500) or 10 percent of the amount of withdrawal, not exceeding twenty thousand dollars ($20,000) in the aggregate.

(4) If any qualified public depository or other financial institution violates a cease and desist order, the State Treasurer may, in addition to suspending or disqualifying the qualified public depository, impose an administrative penalty in an amount not exceeding two thousand five hundred dollars ($2,500) for each violation. Each day a violation continues constitutes a separate violation; provided, however, that the maximum aggregate penalty for any single continuing violation under this subdivision shall be twenty thousand dollars ($20,000) irrespective of the number of days the violation continues prior to the assessment of the penalty.

(f) Any suspension shall be for the period established by the board in the order of suspension, not to exceed a period of six months. During the period of suspension of any qualified public depository, the contingent liability, required collateral, and reporting requirements of the suspended public depository remain in force under the same conditions as if the suspended depository had remained qualified. Upon expiration of the suspension period, the suspended qualified public depository may, by order of the State Treasurer, be reinstated as a qualified public depository if the State Treasurer finds that the financial institution has corrected the conditions that resulted in suspension and otherwise is in compliance with all provisions of this chapter and of the board's standards, rules, regulations, and orders.

(g) Except as may otherwise be provided by the board of directors by rule or regulation, any qualified public depository which has been disqualified may not reapply for qualification until after the expiration of one year from the date of the final order of disqualification or the final disposition of any appeal taken therefrom. During the period of disqualification, the contingent liability, required collateral, and reporting requirements of the disqualified public depository remain in force under the same conditions as if the disqualified depository had remained qualified. A qualified public depository that has been disqualified shall not receive or retain public deposits after the effective date of disqualification. The State Treasurer shall, upon request, return to the disqualified public depository that portion of the collateral pledged that is in excess of the required collateral applicable to the disqualified public depository.