§ 4619. — Appointment of conservators.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC4619]
TITLE 12--BANKS AND BANKING
CHAPTER 46--GOVERNMENT SPONSORED ENTERPRISES
SUBCHAPTER II--REQUIRED CAPITAL LEVELS FOR ENTERPRISES AND SPECIAL
ENFORCEMENT POWERS
Sec. 4619. Appointment of conservators
(a) Appointment
(1) Discretionary authority
The Director may, after providing notice under paragraph (3),
appoint a conservator for an enterprise upon a determination in
writing--
(A) that alternative remedies available to the Director
under this chapter are not satisfactory; and
(B) that--
(i) the enterprise is not likely to pay its obligations
in the normal course of business;
(ii) the enterprise has incurred or is reasonably likely
to incur losses that would deplete substantially all of its
core capital and it is unlikely that the enterprise will
replenish its core capital within a reasonable period;
(iii) the enterprise has concealed or is concealing
books, papers, records, or assets of the enterprise that are
material to the discharge of the Director's responsibilities
under this subchapter, or has refused or is refusing to
submit such books, papers, records, or information regarding
the affairs of the enterprise for inspection to the Director
upon request; or
(iv) the enterprise has willfully violated, or is
willfully violating, a final cease-and-desist order under
section 4631 of this title.
(2) Consent of enterprise
Notwithstanding paragraph (1), the Director may appoint a
conservator for an enterprise if the enterprise, by an affirmative
vote of a majority of the members of its board of directors or by an
affirmative vote of a majority of its shareholders, consents to such
appointment.
(3) Notice
Upon making a determination under paragraph (1) of this
subsection or under section 4616 or 4617 of this title to appoint a
conservator for an enterprise, or upon consent of the enterprise
under paragraph (2) to such an appointment, the Director shall
provide written notice to the enterprise, the Committee on Banking,
Finance and Urban Affairs of the House of Representatives, and the
Committee on Banking, Housing, and Urban Affairs of the Senate--
(A) that a conservator will be appointed for the enterprise;
(B) stating the reasons for the appointment of the
conservator; and
(C) identifying the person or governmental agency that the
Director intends to appoint as conservator.
(4) Qualifications
The conservator shall be--
(A) the Director or any other governmental agency; or
(B) any person that--
(i) has no claim against, or financial interest in, the
enterprise or other basis for a conflict of interest; and
(ii) has the financial and management expertise
necessary to direct the operations and affairs of the
enterprise.
(b) Judicial review
(1) Timing and jurisdiction
Except as provided in paragraph (2), an enterprise for which a
conservator is appointed (pursuant to this section or section 4616
or 4617 of this title) may bring an action in the United States
District Court for the District of Columbia for an order requiring
the Director to terminate the appointment of the conservator. The
court, upon the merits, shall dismiss such action or shall direct
the Director to terminate the appointment of the conservator. Such
an action may be commenced only during the 20-day period beginning
upon the appointment of the conservator.
(2) Consensual appointments
Appointment of a conservator pursuant to consent of the
enterprise under subsection (a)(2) of this section shall not be
subject to judicial review under this subsection.
(3) Standard of review
A decision of the Director to appoint a conservator may be set
aside under this subsection only if the court finds that the
decision was arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with applicable laws.
(4) Limitation on jurisdiction
Except as otherwise provided in this subsection, no court may
take any action regarding the removal of a conservator or otherwise
restrain or affect the exercise of powers or functions of a
conservator.
(c) Replacement
The Director may, without notice or hearing, replace a conservator
with another conservator. Such replacement shall not affect the right of
the enterprise under subsection (b) of this section to obtain judicial
review of the decision of the Director to appoint a conservator.
(d) Examinations
The Director may examine and supervise any enterprise in
conservatorship during the period in which the enterprise continues to
operate as a going concern.
(e) Termination
(1) Discretionary
At any time the Director determines that termination of a
conservatorship pursuant to an appointment under subsection (a) of
this section is in the public interest and may safely be
accomplished, the Director may terminate the conservatorship and
permit the enterprise to resume the transaction of its business
subject to such terms, conditions, and limitations as the Director
may prescribe.
(2) Mandatory
The Director shall terminate a conservatorship initiated
pursuant to section 4616 or 4617 of this title upon a determination
by the Director that the enterprise has maintained an amount of core
capital that is equal to or exceeds the minimum capital level for
the enterprise established under section 4612 of this title, and may
by written order prescribe such terms, conditions, and limitations
on the enterprise as the Director considers appropriate.
(3) Terms
Any terms, conditions, and limitations imposed by the Director
upon termination of a conservatorship shall be enforceable and
reviewable under the provisions of sections 4634 and 4635 of this
title, to the same extent as any cease-and-desist order issued
pursuant to subchapter III of this chapter.
(Pub. L. 102-550, title XIII, Sec. 1369, Oct. 28, 1992, 106 Stat. 3981.)
References in Text
This chapter, referred to in subsec. (a)(1)(A), was in the original
``this title'', meaning title XIII of Pub. L. 102-550, Oct. 28, 1992,
106 Stat. 3941, which is classified principally to this chapter. For
complete classification of title XIII to the Code, see Short Title note
set out under section 4501 of this title and Tables.
Change of Name
Committee on Banking, Finance and Urban Affairs of House of
Representatives treated as referring to Committee on Banking and
Financial Services of House of Representatives by section 1(a) of Pub.
L. 104-14, set out as a note preceding section 21 of Title 2, The
Congress. Committee on Banking and Financial Services of House of
Representatives abolished and replaced by Committee on Financial
Services of House of Representatives, and jurisdiction over matters
relating to securities and exchanges and insurance generally transferred
from Committee on Energy and Commerce of House of Representatives by
House Resolution No. 5, One Hundred Seventh Congress, Jan. 3, 2001.
Section Referred to in Other Sections
This section is referred to in sections 4616, 4617, 4620, 4623, 4635
of this title.
