§205 Termination of Conservatorship

Summary

The Comptroller can end a bank’s conservatorship when 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 conditions, or end the conservatorship when the bank is sold, merged, bought, has a change in control, or is voluntarily dissolved. The Comptroller can also end it if a receiver is appointed. Any conditions set by the Comptroller can be enforced like other FDIC orders. The bank can ask a federal court (where its main office is or in Washington, D.C.) to force the Comptroller to end the order, but must start that court case within 20 days after the conservatorship ends or the order is imposed, whichever is later. When the conservatorship ends because of a sale or similar transaction, the conservator must wrap up the affairs. Within 180 days the conservator must deposit all net proceeds (after conservatorship expenses) with the federal district court where the bank’s main office is, publish notice for three straight months, and mail notice to known creditors and shareholders. Within 60 days after those notices, depositors, creditors, other claimants, or shareholders may ask the court to decide how to divide the money. If nobody files within one year after the deposit, the funds go to the U.S. Treasury. Once the conservator deposits the proceeds and gives the required notices, the conservator is released from further responsibility.