§203 Appointment of Conservator

Summary

The Comptroller of the Currency can, without giving notice or holding a hearing, put a conservator in charge of a bank when the bank shows one or more of the trouble signs listed in another part of the law (section 11(c)(5)). The conservator can be the Federal Deposit Insurance Corporation (FDIC) or another person the Comptroller picks. The Comptroller may also appoint a conservator if the bank’s board or a majority of its shareholders agree, or if the FDIC ends the bank’s insured status. The Comptroller has the sole authority to make these appointments and can replace a conservator without notice. Within 20 days after a conservator is first named, the bank may ask a federal district court (in the bank’s home district or in Washington, D.C.) to order the Comptroller to end the conservatorship. The court will either dismiss the case or tell the Comptroller to end the conservator, and it will overturn the Comptroller’s choice only if the court finds the decision was unreasonable, a misuse of discretion, or not lawful. The conservator may ask a court to pause any legal action involving the bank for up to 45 days, and courts must grant that pause when asked. Courts generally may not interfere with a conservator’s powers except to enforce the Comptroller’s orders when the Comptroller asks.