§205 Termination of conservatorship

Summary

The Comptroller may end a period when the government is running a troubled bank if it believes it is safe and in the public interest. If the FDIC is the conservator, the FDIC Board must agree. The Comptroller can either let the bank reopen under short-term rules the Comptroller sets, or end the conservatorship because the bank was sold, merged, taken over, or voluntarily wound up. The Comptroller can also end it if a receiver is put in place. Any rules the Comptroller imposes when reopening the bank can be enforced like other final bank enforcement orders. A bank can sue in federal court (where its main office is or in Washington, D.C.), but any challenge must start within 20 days after the conservatorship ends or the rules are imposed, whichever is later. If the conservatorship ends because of a sale, merger, change in control, purchase and assumption, or voluntary liquidation, the conservator must finish up the affairs this way: within 180 days deposit all net proceeds (after paying conservatorship expenses) with the U.S. district court where the bank’s main office is. The conservator must publish notice for three months in a row and mail notice to known creditors and shareholders. Within 60 days after that, depositors, creditors, claimants, or shareholders may file a court action to get their share and the court will divide the money fairly. If no one files within one year after the deposit, the money becomes U.S. property and the court sends it to the Treasury. Once the conservator makes the deposit and gives the notices, the conservator’s duties are ended.