§203 Appointment of conservator

Summary

The Comptroller of the Currency can seize control of a bank by naming a conservator (a person or the FDIC who runs the bank temporarily) without warning or a hearing if the Comptroller finds the problems listed in another federal bank law. The bank has 20 days after that appointment to sue in federal court in the district where its main office is or in Washington, D.C. The court will either end the conservatorship or dismiss the case, and it can overturn the Comptroller’s action only if the decision was clearly unreasonable or not allowed by law. The conservator can ask for a pause in any related court case for up to 45 days, and the court must grant that pause if asked. Generally, courts may not remove a conservator or interfere with the conservator’s powers, but a court can enforce the Comptroller’s orders when the Comptroller asks. The Comptroller can also appoint a conservator if a majority of the bank’s board or shareholders agree, or if the FDIC ends the bank’s insured status. Only the Comptroller has the power to make these appointments. The Comptroller may choose the FDIC as conservator, which gives the FDIC its usual conservator powers, or appoint someone else. The Comptroller may replace a conservator without notice; that replacement does not stop the bank’s right to seek the 20-day judicial review of the original appointment.