U.S. Code » Title 12 » Chapter CHAPTER 2— NATIONAL BANKS › Subchapter SUBCHAPTER XIV— BANK CONSERVATION ACT

12 U.S.C. § 203

Appointment of conservator

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(a) Appointment

The Comptroller of the Currency may, without prior notice or hearings, appoint a conservator (which may be the Federal Deposit Insurance Corporation) to the possession and control of a bank whenever the Comptroller of the Currency determines that 1 or more of the grounds specified in section 11(c)(5) of the Federal Deposit Insurance Act [12 U.S.C. 1821(c)(5)] exist.

(b) Judicial review(1) In general

Not later than 20 days after the initial appointment of a conservator pursuant to this section, the bank may bring an action in the United States district court for the judicial district in which the home office of such bank is located, or in the United States District Court for the District of Columbia, for an order requiring the Comptroller to terminate the appointment of the conservator, and the court, upon the merits, shall dismiss such action or shall direct the Comptroller to terminate the appointment of such conservator. The Comptroller’s decision to appoint a conservator pursuant to this section shall be set aside only if the court finds that such decision was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.

(2) Stay

The conservator may request that any judicial action or proceeding to which the conservator or the bank is or may become a party be stayed for a period of up to 45 days after the appointment of the conservator. Upon petition, the court shall grant such stay as to all parties.

(3) Actions and ordersExcept as otherwise provided in this subsection, no court may take any action regarding the removal of a conservator, or restrain, or affect the exercise of powers or functions of a conservator. A court, upon application by the Comptroller, shall have jurisdiction to enforce an order of the Comptroller relating to—(A) the conservatorship and the bank in conservatorship, or(B) restraining or affecting the exercise of powers or functions of a conservator.(c) Additional grounds for appointmentIn addition to the foregoing provisions, the Comptroller may appoint a conservator for a bank if—(1) the bank, by an affirmative vote of a majority of its board of directors or by an affirmative vote of a majority of its shareholders, consents to such appointment, or(2) the Federal Deposit Insurance Corporation terminates the bank’s status as an insured bank.The appointment of a conservator pursuant to this subsection shall not be subject to review.(d) Exclusive authority

The Comptroller shall have exclusive power and jurisdiction to appoint a conservator for a bank. Whenever the Comptroller appoints a conservator for any bank, the Comptroller may appoint the Federal Deposit Insurance Corporation conservator for such bank. The Federal Deposit Insurance Corporation, as such conservator, shall have all the powers granted under the Federal Deposit Insurance Act [12 U.S.C. 1811 et seq.], and (when not inconsistent therewith) any other rights, powers, and privileges possessed by conservators of banks under this Act and any other provision of law. The Comptroller may also appoint another person as conservator, who shall be subject to the provisions of this Act.

(e) Replacement of conservator

The Comptroller may, without notice or hearing, replace a conservator with another conservator. Such replacement shall not affect the bank’s right under subsection (b) to obtain judicial review of the Comptroller’s original decision to appoint a conservator.

(Mar. 9, 1933, ch. 1, title II, § 203, 48 Stat. 2; Pub. L. 101–73, title VIII, § 802, Aug. 9, 1989, 103 Stat. 442; Pub. L. 102–242, title I, § 133(c), Dec. 19, 1991, 105 Stat. 2271.)Editorial NotesReferences in Text

The Federal Deposit Insurance Act, referred to in subsec. (d), is act Sept. 21, 1950, ch. 967, § 2, 64 Stat. 873, which is classified generally to chapter 16 (§ 1811 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 1811 of this title and Tables.

This Act, referred to in subsec. (d), is act Mar. 9, 1933, ch. 1, 48 Stat. 1, popularly known as the Emergency Banking and Bank Conservation Act, which is classified to sections 51a, 51b, 51c, 51d, 95, 201 to 212, 248, 347b, 347c, 347d, 445 of this title and to section 4305 of Title 50, War and National Defense, and classified as a note under section 4305 of Title 50.

Section 51d of this title was repealed by act June 30, 1947, ch. 166, title II, § 206(b), (o), 61 Stat. 208. For effect of the repeal on outstanding debentures held by banks, see References in Text note set out under section 51b–1 of this title.

Amendments

1991—Subsec. (a). Pub. L. 102–242 amended subsec. (a) generally, substituting present provisions for provisions which specified circumstances under which Comptroller could appoint conservator.

1989—Pub. L. 101–73 amended section generally, changing structure of section from a single unlettered paragraph to one consisting of subsections (a) to (e).

Statutory Notes and Related SubsidiariesEffective Date of 1991 Amendment

Amendment by Pub. L. 102–242 effective 1 year after Dec. 19, 1991, see section 133(g) of Pub. L. 102–242, set out as a note under section 191 of this title.

Executive DocumentsException as to Transfer of Functions

Functions vested by any provision of law in Comptroller of the Currency, referred to in this section, not included in transfer of functions to Secretary of the Treasury, see note set out under section 1 of this title.

Conservators of State Banks

Ex. Ord. No. 6080, Mar. 18, 1933, provided for appointment of conservators of State banks under certain regulations.

Notes of Decisions
Cited in 25 cases, 1934–2004 · leading case: James Madison Ltd., by Norman F. Hecht, Sr., Assignee v. Eugene A. Ludwig, Comptroller of the Currency, 82 F.3d 1085 (D.C. Cir. 1996).
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James Madison Ltd., by Norman F. Hecht, Sr., Assignee v. Eugene A. Ludwig, Comptroller of the Currency, 82 F.3d 1085 (D.C. Cir. 1996). · cites it 3× “12 U.S.C. § 203 (b)(1)-(2) (1994). It also authorized judicial review of the FDIC’s appointment as conservator or receiver of federally chartered savings associations and state-chartered institutions.”
Damian Sinclair, Individually & as Assignee of Sinclair Nat'l Bank v. John D. Hawke, Jr., 314 F.3d 934 (8th Cir. 2003). “Of particular relevance to the OCC actions of which SNB complains, FIRREA imposed more stringent capital requirements on commercial banks, see 12 U.”
Fahey v. Mallonee, 332 U.S. 245 (1947). “2 -3, 12 U. S. C. §203 ; Banking Act of 1933, §31, 48 Stat.”
Fed. Deposit Ins. Corp. v. Howse, 736 F. Supp. 1437 (S.D. Tex. 1990). “5 Third, the BCA does not mention a consent agreement as an acceptable means of creating a conservatorship, and the Comptroller of the Currency was not a party to the Consent Agreement as would be required by 12 U.S.C. § 203 to create a conservator-ship.”
Young v. United States, 60 Fed. Cl. 418 (Fed. Cl. 2004). “See 12 U.S.C. § 203 (k). . This program was established under 12 U.”
In Re Franklin Nat'l Bank Sec. Litig., 478 F. Supp. 210 (E.D.N.Y 1979). “In the event that a bank suffers serious financial difficulty, he may appoint a caretaker-conservator, 12 U.S.C. §§ 203 , 205, or, if necessary, declare its insolvency and appoint its receiver, 12 U.”
First Nat'l Bank & Trust v. Dep't of the Treasury, 63 F.3d 894 (9th Cir. 1995). · cites it 8× “Steinbrink (the Comptroller) appointed a conservator for First National Bank & Trust (the Bank) pursuant to 12 U.S.C. § 203 (a) (Supp. II 1990). The Bank and certain of its shareholders sued the Comptroller to terminate the conservator-ship, contending he had violated their…”
Off. & Prof'l Employees Int'l Union, Local 2 v. Fed. Deposit Ins., 813 F. Supp. 39 (D.D.C. 1993). “1 On August 1, 1990, the Comptroller of the Currency placed the Bank in conservatorship and appointed a Conservator pursuant to 12 U.S.C. § 203 . On August 10, 1990, the Comptroller of the Currency terminated the conservatorship, declared the Bank insolvent, and appointed the…”
James Madison Ltd. ex rel. Hecht v. Ludwig, 868 F. Supp. 3 (D.D.C. 1994). “See 12 U.S.C. § 203 (b) (Supp. IV 1992). . The statute has since been amended so that the grounds for appointing a receiver under § 191 include those set forth in 12 U.”
Davis Trust Co. v. Hardee, 85 F.2d 571 (D.C. Cir. 1936). “Section 203 of the act ( 12 U.S.C.A. § 203 ) provides for the appointment of a conservator by the Comptroller “whenever he shall deem it necessary in order to conserve the assets of any bank for the benefit of the depositors and other creditors thereof”; and the conservator,…”
Am. Bank, N.A. v. Clarke, 933 F.2d 899 (10th Cir. 1991). “Further, provisions added by 1989 amendments to the National Bank Act § 203, 12 U.S.C. § 203 , permit review of actions taken by the Comptroller in dealing with troubled banks, but only post-closure, not pre-closure.”
Downey v. City of Yonkers, 106 F.2d 69 (2d Cir. 1939). “On March 20 a conservator was appointed with the powers of a receiver as provided in 12 U.S.C.A. § 203 . On January 23, 1934, the Comptroller of the Currency on a finding of insolvency appointed a receiver.”
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