12 U.S.C. § 206 — Conservator; powers and duties

Page 70 TITLE 12—BANKS AND BANKING § 205 1 So in original. Probably should be ‘‘Comptroller of the Cur- rency’’. 1 So in original. Probably should be ‘‘Comptroller of the Cur- rency’’. troller of the Currency shall cause to be made such ex- aminations of the affairs of such bank as shall be nec- essary to inform him as to the financial condition of such bank, and the examiner shall make a report there- on to the Comptroller of the Currency at the earliest practicable date.’’ Executive Documents EXCEPTION AS TO TRANSFER OF FUNCTIONS Functions vested by any provision of law in Comp- troller 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. § 205. Termination of conservatorship (a) General rule At any time the Comptroller 1 becomes satis- fied that it may safely be done and that it would be in the public interest, the Comptroller (with the agreement of the Board of Directors of the Federal Deposit Insurance Corporation when the Corporation has been appointed conservator) may— (1) terminate the conservatorship and per- mit the involved bank to resume the trans- action of its business subject to such terms, conditions, and limitations as the Comptroller may prescribe; or (2) terminate the conservatorship upon a sale, merger, consolidation, purchase and as- sumption, change in control, or voluntary dis- solution and liquidation of the involved bank. (b) Other grounds for termination The Comptroller also may terminate the con- servatorship upon the appointment of a receiver pursuant to section 191 of this title. (c) Enforcement under Federal Deposit Insur- ance Act Such terms, conditions, and limitations as may be prescribed under subsection (a)(1) shall be enforceable under the provisions of section 8(i) of the Federal Deposit Insurance Act [12 U.S.C. 1818(i)], to the same extent as an order issued pursuant to section 8(b) of the Federal Deposit Insurance Act [12 U.S.C. 1818(b)] which has become final. The bank may bring an action in the United States district court for the judi- cial 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 order. An action for judicial review of the terms, conditions, and limitations may not be com- menced later than 20 days from the date of the termination of the conservatorship or the impo- sition of the order, whichever is later. (d) Action upon termination (1) In general Upon termination of the conservatorship under subsection (a)(2), the Federal Deposit Insurance Corporation, as conservator, or when another person is appointed conservator, such other person, shall conclude the affairs of the conservatorship in accordance with para- graph (2). (2) Deposit and distribution of proceeds (A) Within 180 days of the sale, merger, con- solidation, purchase and assumption, change in control, or voluntary dissolution and liq- uidation, the conservator shall deposit all net proceeds received from the transaction, less any outstanding expenses of the conservator- ship, with the United States district court for the judicial district in which the home office of such bank is located and shall cause notice to be published for three consecutive months and notify by mail all known and remaining creditors and shareholders. Within 60 days thereafter, any depositor, creditor, or other claimant of the bank, or any shareholder of the bank may bring an action in interpleader in that court for distribution of the proceeds. The district court shall distribute such funds equitably. If no such action is instituted with- in one year after the date the funds are depos- ited with the district court, title to such net proceeds shall revert to the United States and the district court shall remit the funds to the Treasury of the United States. (B) The conservator shall be deemed to have discharged all responsibility of the con- servatorship upon the deposit of the proceeds with the district court and giving the required notifications. (Mar. 9, 1933, ch. 1, title II, § 205, 48 Stat. 3; Pub. L. 101–73, title VIII, § 804, Aug. 9, 1989, 103 Stat. 443.) Editorial Notes REFERENCES IN TEXT The Federal Deposit Insurance Act, referred to in subsec. (c), 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. AMENDMENTS 1989—Pub. L. 101–73 amended section generally. Prior to amendment, section read as follows: ‘‘If the Comp- troller of the Currency becomes satisfied that it may safely be done and that it would be in the public inter- est, he may, in his discretion, terminate the con- servatorship and permit such bank to resume the trans- action of its business subject to such terms, conditions, restrictions and limitations as he may prescribe.’’ Executive Documents EXCEPTION AS TO TRANSFER OF FUNCTIONS Functions vested by any provision of law in Comp- troller 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. § 206. Conservator; powers and duties (a) General powers A conservator shall have all the powers of the shareholders, directors, and officers of the bank and may operate the bank in its own name un- less the Comptroller 1 in the order of appoint- ment limits the conservator’s authority. Page 71 TITLE 12—BANKS AND BANKING § 209 1 So in original. Probably should be ‘‘Comptroller of the Cur- rency’’. (b) Subject to rules of Comptroller The conservator shall be subject to such rules, regulations, and orders as the Comptroller from time to time deems appropriate; and, except as otherwise specifically provided in such rules, regulations, or orders or in section 209 of this title, shall have the same rights and privileges and be subject to the same duties, restrictions, penalties, conditions, and limitations as apply to directors, officers, or employees of a national bank. (c) Payment of depositors and creditors The Comptroller may require the conservator to set aside and make available for withdrawal by depositors and payment to other creditors such amounts as in the opinion of the Comp- troller may safely be used for that purpose. All depositors and creditors who are similarly situ- ated shall be treated in the same manner. (d) Compensation of conservator and employees The conservator and professional employees appointed to represent or assist the conservator shall not be paid amounts greater than are pay- able to employees of the Federal Government for similar services, except that the Comptroller of the Currency may authorize payment at high- er rates (but not in excess of rates prevailing in the private sector), if the Comptroller deter- mines that paying such higher rates is necessary in order to recruit and retain competent per- sonnel. (e) Expenses All expenses of any such conservatorship shall be paid by the bank and shall be a lien upon the bank which shall be prior to any other lien. (Mar. 9, 1933, ch. 1, title II, § 206, 48 Stat. 3; Pub. L. 101–73, title VIII, § 805, Aug. 9, 1989, 103 Stat. 445.) Editorial Notes AMENDMENTS 1989—Pub. L. 101–73 amended section generally. Prior to amendment, section read as follows: ‘‘While such bank is in the hands of the conservator appointed by the Comptroller of the Currency, the Comptroller may require the conservator to set aside and make available for withdrawal by depositors and payment to other creditors, on a ratable basis, such amounts as in the opinion of the Comptroller may safely be used for this purpose; and the Comptroller may, in his discretion, permit the conservator to receive deposits, but deposits received while the bank is in the hands of the conser- vator shall not be subject to any limitation as to pay- ment or withdrawal, and such deposits shall be seg- regated and shall not be used to liquidate any indebted- ness of such bank existing at the time that a conser- vator was appointed for it, or any subsequent indebted- ness incurred for the purpose of liquidating any indebt- edness of such bank existing at the time such conser- vator was appointed. Such deposits received while the bank is in the hands of the conservator shall be kept on hand in cash, invested in the direct obligations of the United States, or deposited with a Federal reserve bank. The Federal reserve banks are authorized to open and maintain separate deposit accounts for such pur- pose, or for the purpose of receiving deposits from State officials in charge of State banks under similar circumstances.’’ Executive Documents EXCEPTION AS TO TRANSFER OF FUNCTIONS Functions vested by any provision of law in Comp- troller 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. §§ 207, 208. Repealed. Pub. L. 101–73, title VIII, § 808, Aug. 9, 1989, 103 Stat. 446 Section 207, acts Mar. 9, 1933, ch. 1, title II, § 207, 48 Stat. 3; May 20, 1933, ch. 34, 48 Stat. 72, prescribed con- ditions for reorganization of banks, requiring consent of depositors and other creditors, of stockholders, or of both depositors and other creditors and stockholders, namely that the reorganization plan be fair and equi- table to depositors, other creditors, and stockholders and be in the public interest; that the plan be con- sented to in writing; and that the approved plan be binding on all consenting or nonconsenting depositors, creditors, and stockholders. Section 208, act Mar. 9, 1933, ch. 1, title II, § 208, 48 Stat. 4, made the provisions for segregation of deposits inapplicable after termination of conservatorship, and provided for termination of conservatorship after publi- cation of notice of termination and mailing of a copy of such notice by registered mail to depositors of record. § 209. Liability protection (a) Federal agency and employees In any case in which the conservator is a Fed- eral agency or an employee of the Government, the provisions of chapters 161 and 171 of title 28 shall apply with respect to such conservator’s li- ability for acts or omissions performed pursuant to and in the course of the duties and respon- sibilities of the conservatorship. (b) Other conservators In any case where the conservator is not a conservator described in subsection (a), the con- servator shall not be liable for damages in tort or otherwise for acts or omissions performed pursuant to and in the course of the duties and responsibilities of the conservatorship, unless such acts or omissions constitute gross neg- ligence, including any similar conduct or any form of intentional tortious conduct, as deter- mined by a court. (c) Indemnification The Comptroller 1 shall have authority to in- demnify the conservator on such terms as the Comptroller deems proper. (Mar. 9, 1933, ch. 1, title II, § 209, 48 Stat. 5; Sept. 3, 1954, ch. 1263, § 23, 68 Stat. 1234; Pub. L. 101–73, title VIII, § 806, Aug. 9, 1989, 103 Stat. 445.) Editorial Notes AMENDMENTS 1989—Pub. L. 101–73 amended section generally. Prior to amendment, section read as follows: ‘‘Conservators appointed pursuant to the provisions of this subchapter shall be subject to the provisions of and to the pen- alties prescribed by sections 334, 656, and 1005 of title 18; and sections 202, 216, 281, 431, 432, and 433 of title 18, in so far as applicable, are extended to apply to contracts, agreements, proceedings, dealings, claims and con- troversies by or with any such conservator or the