§205 Termination of Conservatorship

Summary

The Comptroller of the Currency can end a bank’s conservatorship when the Comptroller thinks it is safe and in the public interest. If the FDIC was the conservator, the FDIC Board must agree. The Comptroller can either return the bank to normal business with conditions, or end the conservatorship after a sale, merger, consolidation, purchase and assumption, change in control, or voluntary liquidation. The Comptroller can also end it when a receiver is appointed under section 191. Any conditions the Comptroller sets can be enforced under section 8(i) of the Federal Deposit Insurance Act like orders under section 8(b). The bank can sue in federal district court where its main office is or in Washington, D.C., but any challenge to the conditions must start within 20 days after the conservatorship ends or the order is imposed, whichever is later. If the conservatorship ends because of a sale, merger, or similar transaction, the conservator must wrap up the case. 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 the deposit, any depositor, creditor, claimant, or shareholder may ask the court to decide how to divide the money. The court will divide the funds fairly. If no one asks within one year after the deposit, the money goes to the United States and the court sends it to the Treasury. The conservator is relieved of responsibility once it makes the deposit and gives the required notices.