Fdic Authorities

**FDIC's powers after a bank failure. Jeffrey L. Portis, 65 U.Det.L.Rev. 259 (1988).
12 u.s.c. 1811 FDIC westlaw

3. Purpose
Congress enacted Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) to aid the Federal
Deposit Insurance Corporation (FDIC) in its immediate responsibilities of dealing with mounting bank failures in
the United States, and, in so doing, Congress made pellucid that, in acting as a receiver of failed banks, the FDIC
fosters important public policies relating to the avoidance of a national banking crisis. U.S. v. Sweeney, C.A.1
(Mass.) 2000, 226 F.3d 43. Banks And Banking
505
Goal of Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) is to stem financial hemorrhaging
resulting from large number of failures in thrift industry. Resolution Trust Corp. v. Diamond, C.A.2 (N.Y.) 1995, 45
F.3d 665, 132 A.L.R. Fed. 637, certiorari denied 115 S.Ct. 2609, 515 U.S. 1158, 132 L.Ed.2d 853. Building And
Loan Associations
2
**Policies behind creation of Corporation are promoting stability of, and confidence in, nation's banking system.
Gunter v. Hutcheson, C.A.11 (Ga.) 1982, 674 F.2d 862, certiorari denied 103 S.Ct. 60, 459 U.S. 826, 74 L.Ed.2d 63,
rehearing denied 103 S.Ct. 477, 459 U.S. 1059, 74 L.Ed.2d 624. Banks And Banking
501
**This chapter set up system of insurance, primary function of which was stabilizing or promoting the stability of
banks. First State Bank of Hudson County v. U. S., C.A.3 (N.J.) 1979, 599 F.2d 558, certiorari denied 100 S.Ct. 662,
444 U.S. 1013, 62 L.Ed.2d 642. Banks And Banking
502
**The purpose of this section was to stabilize or to promote the stability of banks and to aid the federal government
in its evergrowing financial transactions. Doherty v. U.S., C.C.A.8 (Neb.) 1938, 94 F.2d 495, certiorari denied 58
S.Ct. 763, 303 U.S. 658, 82 L.Ed. 1117.
This chapter was intended to prevent runs on banks by depositors, to preserve solvency of insured banks, and thus to
keep open the channels of trade and commercial exchange. Weir v. U.S., C.C.A.7 (Ind.) 1937, 92 F.2d 634, certiorari
denied 58 S.Ct. 368, 302 U.S. 761, 82 L.Ed. 590, rehearing denied 58 S.Ct. 479, 302 U.S. 781, 82 L.Ed. 603,
certiorari denied 58 S.Ct. 369, 302 U.S. 761, 82 L.Ed. 590, rehearing denied 58 S.Ct. 480, 302 U.S. 781, 82 L.Ed.
603. Banks And Banking
4; United States
53(8)
**Under Federal Deposit Insurance Act, FDIC's regulatory oversight of banks is intended only to protect depositors,
insurance fund, and public, although benefit may inure incidentally to bank officers and directors; likewise, FDIC's
actions as receiver for failed bank are undertaken only to fulfill its mandate to stabilize banking system by protecting
depositors and creditors of failed bank and public generally. Federal Deposit Ins. Corp. v. Isham, D.Colo.1992, 782
F.Supp. 524. Banks And Banking
505
Congressional purpose in creating the Corporation was to promote soundness of banking and to aid the government
in discharge of its fiscal transactions. Freeling v. Federal Deposit Ins. Corp., W.D.Okla.1962, 221 F.Supp. 955,
affirmed 326 F.2d 971. See, also, Federal Deposit Ins. Corp. v. First Mortg. Investors, E.D.Wis.1980, 485 F.Supp.
502
The chief function of the Federal Deposit Insurance Corporation is to insure deposits of all banks entitled to
insurance under the law, to extent of $5,000 for each depositor, and second function of the corporation is to act as
receiver for insured banks which fail. Ghent v. Cliffside Park Title Guarantee & Trust Co., N.J.Sup.1938, 199 A.
416, 16 N.J. Misc. 308. Banks And Banking
505
6. Nature of Federal Deposit Insurance Corporation
Federal Deposit Insurance Corporation is a governmental institution. U. S. v.

Doherty, D.C.Neb.1937, 18 F.Supp. 793, affirmed 94 F.2d 495, certiorari denied 58 S.Ct. 763,
303 U.S. 658, 82 L.Ed. 1117. See, also, Federal Deposit Ins. Corp. v. Mangiaracina, 1938, 198 A. 777, 16
N.J.Misc. 203. United States
53(4)
3. ---- Disclosure of information, bank examinations
In reorganization proceedings under section 1101 et seq. of Title 11 in which question of whether debtor's president
had authority to file petition was at issue, Corporation, which was merely a witness in proceedings, was entitled to
protective order limiting scope of subpoena duces tecum requiring production of certain records, and court would
undertake in camera review of requested records to determine scope of official information privilege. Matter of
Verrazzano Towers, Inc., Bkrtcy.E.D.N.Y.1980, 7 B.R. 648. Records
66; Records
67
lexis
2. Purpose
Purpose of Federal Deposit Insurance Corporation is to promote
soundness of banking and aid government in discharge of its financial
transactions. Weir v United States (1937, CA7 Ind) 92 F2d 634, 114 ALR
481, cert den (1937) 302 US 761, 82 L Ed 590, 58 S Ct 368, reh den (1938)
302 US 781, 82 L Ed 603, 58 S Ct 479 and cert den (1937) 302 US 761, 82 L
Ed 590, 58 S Ct 369, reh den (1937) 302 US 781, 82 L Ed 603, 58 S Ct 480;
Freeling v Federal Deposit Ins. Corp. (1962, WD Okla) 221 F Supp 955, affd
(1963, CA10 Okla) 326 F2d 971.
**Policies behind creation of Federal
promoting stability of and confidence in
v Hutcheson (1982, CA11 Ga) 674 F2d 862,
den (1982) 459 US 826, 103 S Ct 60, 74 L
1059, 103 S Ct 477, 74 L Ed 2d 624.
Deposit Insurance Corporation are

nation's banking system. Gunter
CCH Fed Secur L Rep P 98654, cert
Ed 2d 63, reh den (1982) 459 US
7. Validity
Creation of Federal Deposit Insurance Corporation was within
constitutional power of government. Weir v United States (1937, CA7 Ind)
92 F2d 634, 114 ALR 481, cert den (1937) 302 US 761, 82 L Ed 590, 58 S Ct
368, reh den (1938) 302 US 781, 82 L Ed 603, 58 S Ct 479 and cert den
(1937) 302 US 761, 82 L Ed 590, 58 S Ct 369, reh den (1937) 302 US 781, 82
L Ed 603, 58 S Ct 480.
Congress had authority to create Federal Deposit Insurance Corporation
and make it depositary of public monies of United States and financial
agent of government, to enact regulatory legislation to protect and make
it effective, and to adopt such means as it deemed necessary for

protection and preservation of that institution. Doherty v United States
(1938, CA8 Neb) 94 F2d 495, cert den (1938) 303 US 658, 82 L Ed 1117, 58 S
Ct 763.
12 U.S.C. 1820. Administration of Corporation

(a) Board of Directors; use of mails; cooperation with other Federal agencies
The Board of Directors shall administer the affairs of the Corporation fairly and impartially and without
discrimination. The Board of Directors of the Corporation shall determine and prescribe the manner in which its
obligations shall be incurred and its expenses allowed and paid. The Corporation shall be entitled to the free use of
the United States mails in the same manner as the executive departments of the Government. The Corporation with
the consent of any Federal Reserve bank or of any board, commission, independent establishment, or executive
department of the Government, including any field service thereof, may avail itself of the use of information,
services, and facilities thereof in carrying out the provisions of this chapter.
(b) Examinations
(1) Appointment of examiners and claims agents
The Board of Directors shall appoint examiners and claims agents.
(2) Regular examinations
Any examiner appointed under paragraph (1) shall have power, on behalf of the Corporation, to examine-(A) any insured State nonmember bank or insured State branch of any foreign bank;
(B) any depository institution which files an application with the Corporation to become an insured depository
institution; and
(C) any insured depository institution in default,
whenever the Board of Directors determines an examination of any such depository institution is necessary.
(3) Special examination of any insured depository institution
(A) In general
In addition to the examinations authorized under paragraph (2), any examiner appointed under paragraph (1)
shall have power, on behalf of the Corporation, to make any special examination of any insured depository
institution or nonbank financial company supervised by the Board of Governors or a bank holding company
described in section section 165(a) of the Financial Stability Act of 2010 [12 U.S.C.A. 5365(a)], whenever the
Board of Directors determines that a special examination of any such depository institution is necessary to
determine the condition of such depository institution for insurance purposes, or of such nonbank financial
company supervised by the Board of Governors or bank holding company described in section 165(a) of the
Financial Stability Act of 2010 [12 U.S.C.A. 5365(a)], for the purpose of implementing its authority to
provide for orderly liquidation of any such company under title II of that Act, provided that such authority may
not be used with respect to any such company that is in a generally sound condition.
(B) Limitation
Before conducting a special examination of a nonbank financial company supervised by the Board of Governors
or a bank holding company described in section 165(a) of the Financial Stability Act of 2010 [ 12 U.S.C.A.
5365(a)], the Corporation shall review any available and acceptable resolution plan that the company has
submitted in accordance with section 165(d) of that Act [12 U.S.C.A. 5365(d)], consistent with the
nonbinding effect of such plan, and available reports of examination, and shall coordinate to the maximum
extent practicable with the Board of Governors, in order to minimize duplicative or conflicting examinations.
(4) Examination of affiliates
(A) In general
In making any examination under paragraph (2) or (3), any examiner appointed under paragraph (1) shall have
power, on behalf of the Corporation, to make such examinations of the affairs of any affiliate of any depository
institution as may be necessary to disclose fully-(i) the relationship between such depository institution and any such affiliate; and
(ii) the effect of such relationship on the depository institution.
(B) Commitment by foreign banks to allow examinations of affiliates
No branch or depository institution subsidiary of a foreign bank may become an insured depository institution
unless such foreign bank submits a written binding commitment to the Board of Directors to permit any
examination of any affiliate of such branch or depository institution subsidiary pursuant to subparagraph (A) to
the extent determined by the Board of Directors to be necessary to carry out the purposes of this chapter.
(5) Examination of insured State branches
The Board of Directors shall-(A) coordinate examinations of insured State branches of foreign banks with examinations conducted by the
Board of Governors of the Federal Reserve System under section 3105(c)(1) of this title; and
(B) to the extent possible, participate in any simultaneous examination of the United States operations of a
foreign bank requested by the Board under such section.

(6) Power and duty of examiners
Each examiner appointed under paragraph (1) shall-(A) have power to make a thorough examination of any insured depository institution or affiliate under
paragraph (2), (3), (4), or (5); and
(B) shall make a full and detailed report of condition of any insured depository institution or affiliate examined
to the Corporation.
(7) Power of claim agents
Each claim agent appointed under paragraph (1) shall have power to investigate and examine all claims for
insured deposits.
(c) Administration of oaths and affirmations; evidence; subpena powers
In connection with examinations of insured depository institutions and any State nonmember bank, savings
association, or other institution making application to become insured depository institutions, and affiliates thereof,
or with other types of investigations to determine compliance with applicable law and regulations, the appropriate
Federal banking agency, or its designated representatives, are authorized to administer oaths and affirmations, and to
examine and to take and preserve testimony under oath as to any matter in respect to the affairs or ownership of any
such bank or institution or affiliate thereof, and to exercise such other powers as are set forth in section 1818(n) of
this title.
(d) Annual on-site examinations of all insured depository institutions required
(1) In general
The appropriate Federal banking agency shall, not less than once during each 12-month period, conduct a fullscope, on-site examination of each insured depository institution.
(2) Examinations by Corporation
Paragraph (1) shall not apply during any 12-month period in which the Corporation has conducted a full-scope,
on-site examination of the insured depository institution.
(3) State examinations acceptable
The examinations required by paragraph (1) may be conducted in alternate 12-month periods, as appropriate, if
the appropriate Federal banking agency determines that an examination of the insured depository institution
conducted by the State during the intervening 12-month period carries out the purpose of this subsection.
(4) 18-month rule for certain small institutions

Paragraphs (1), (2), and (3) shall apply with 18-month substituted for 12-month if-(A) the insured depository institution has total assets of less than $500,000,000;
(B) the institution is well capitalized, as defined in section 1831o of this title;
(C) when the institution was most recently examined, it was found to be well managed, and its composite
condition-(i) was found to be outstanding; or
(ii) was found to be outstanding or good, in the case of an insured depository institution that has total assets of
not more than $100,000,000;
(D) the insured institution is not currently subject to a formal enforcement proceeding or order by the
Corporation or the appropriate Federal banking agency; and
(E) no person acquired control of the institution during the 12-month period in which a full-scope, on-site
examination would be required but for this paragraph.
(5) Certain Government-controlled institutions exempted
Paragraph (1) does not apply to-(A) any institution for which the Corporation is conservator; or
(B) any bridge depository institution, none of the voting securities of which are owned by a person or agency
other than the Corporation.
(6) Coordinated examinations
To minimize the disruptive effects of examinations on the operations of insured depository institutions-(A) each appropriate Federal banking agency shall, to the extent practicable and consistent with principles of
safety and soundness and the public interest-(i) coordinate examinations to be conducted by that agency at an insured depository institution and its
affiliates;
(ii) coordinate with the other appropriate Federal banking agencies in the conduct of such examinations;
(iii) work to coordinate with the appropriate State bank supervisor-(I) the conduct of all examinations made pursuant to this subsection; and
(II) the number, types, and frequency of reports required to be submitted to such agencies and supervisors
by insured depository institutions, and the type and amount of information required to be included in such
reports; and
(iv) use copies of reports of examinations of insured depository institutions made by any other Federal
banking agency or appropriate State bank supervisor to eliminate duplicative requests for information; and
(B) not later than 2 years after September 23, 1994, the Federal banking agencies shall jointly establish and
implement a system for determining which one of the Federal banking agencies or State bank supervisors shall
be the lead agency responsible for managing a unified examination of each insured depository institution and its
affiliates, as required by this subsection.
(7) Separate examinations permitted
Notwithstanding paragraph (6), each appropriate Federal banking agency may conduct a separate examination in
an emergency or under other exigent circumstances, or when the agency believes that a violation of law may have
occurred.
(8) Report
At the time the system provided for in paragraph (6) is established, the Federal banking agencies shall submit a
joint report describing the system to the Committee on Banking, Housing, and Urban Affairs of the Senate and the
Committee on Banking, Finance and Urban Affairs of the House of Representatives. Thereafter, the Federal
banking agencies shall annually submit a joint report to the Committee on Banking, Housing, and Urban Affairs of
the Senate and the Committee on Banking, Finance and Urban Affairs of the House of Representatives regarding
the progress of the agencies in implementing the system and indicating areas in which enhancements to the
system, including legislature improvements, would be appropriate.
(9) Standards for determining adequacy of State examinations
The Federal Financial Institutions Examination Council shall issue guidelines establishing standards to be used at
the discretion of the appropriate Federal banking agency for purposes of making a determination under paragraph
(3).
(10) Agencies authorized to increase maximum asset amount of institutions for certain purposes
At any time after the end of the 2-year period beginning on September 23, 1994, the appropriate Federal banking
agency, in the agency's discretion, may increase the maximum amount limitation contained in paragraph (4)(C)
(ii), by regulation, from $100,000,000 to an amount not to exceed $500,000,000 for purposes of such paragraph, if
the agency determines that the greater amount would be consistent with the principles of safety and soundness for
insured depository institutions.
(e) Examination fees
(1) Regular and special examinations of depository institutions
The cost of conducting any regular examination or special examination of any depository institution under
subsection (b)(2), (b)(3), or (d) or of any entity described in section 1813(q)(2) of this title may be assessed by the
Corporation against the institution or entity to meet the expenses of the Corporation in carrying out such
examinations.
(2) Examination of affiliates
The cost of conducting any examination of any affiliate of any insured depository institution under subsection (b)
(4) of this section may be assessed by the Corporation against each affiliate which is examined to meet the
Corporation's expenses in carrying out such examination.
(3) Assessment against depository institution in case of affiliate's refusal to pay
(A) In general
Subject to subparagraph (B), if any affiliate of any insured depository institution-(i) refuses to pay any assessment under paragraph (2); or
(ii) fails to pay any such assessment before the end of the 60-day period beginning on the date the affiliate
receives notice of the assessment,
the Corporation may assess such cost against, and collect such cost from, the depository institution.
(B) Affiliate of more than 1 depository institution
If any affiliate referred to in subparagraph (A) is an affiliate of more than 1 insured depository institution, the
assessment under subparagraph (A) may be assessed against the depository institutions in such proportions as
the Corporation determines to be appropriate.
(4) Civil money penalty for affiliate's refusal to cooperate
(A) Penalty imposed
If any affiliate of any insured depository institution--
(i) refuses to permit an examiner appointed by the Board of Directors under subsection (b)(1) of this section
to conduct an examination; or
(ii) refuses to provide any information required to be disclosed in the course of any examination,
the depository institution shall forfeit and pay a penalty of not more than $5,000 for each day that any such
refusal continues.
(B) Assessment and collection
Any penalty imposed under subparagraph (A) shall be assessed and collected by the Corporation in the manner
provided in section 1818(i)(2) of this title.
(5) Deposits of examination assessment
Amounts received by the Corporation under this subsection (other than paragraph (4)) may be deposited in the
manner provided in section 1823 of this title.
(f) Preservation of agency records
(1) In general
A Federal banking agency may cause any and all records, papers, or documents kept by the agency or in the
possession or custody of the agency to be-(A) photographed or microphotographed or otherwise reproduced upon film; or
(B) preserved in any electronic medium or format which is capable of-(i) being read or scanned by computer; and
(ii) being reproduced from such electronic medium or format by printing any other form of reproduction of
electronically stored data.
(2) Treatment as original records
Any photographs, microphotographs, or photographic film or copies thereof described in paragraph (1)(A) or
reproduction of electronically stored data described in paragraph (1)(B) shall be deemed to be an original record
for all purposes, including introduction in evidence in all State and Federal courts or administrative agencies, and
shall be admissible to prove any act, transaction, occurrence, or event therein recorded.
(3) Authority of the Federal banking agencies
Any photographs, microphotographs, or photographic film or copies thereof described in paragraph (1)(A) or
reproduction of electronically stored data described in paragraph (1)(B) shall be preserved in such manner as the
Federal banking agency shall prescribe, and the original records, papers, or documents may be destroyed or
otherwise disposed of as the Federal banking agency may direct.
(g) Authority to prescribe regulations and definitions
Except to the extent that authority under this chapter is conferred on any of the Federal banking agencies other than
the Corporation, the Corporation may-(1) prescribe regulations to carry out this chapter; and
(2) by regulation define terms as necessary to carry out this chapter.
(h) Coordination of examination authority
(1) State bank supervisors of home and host States
(A) Home State of bank
The appropriate State bank supervisor of the home State of an insured State bank has authority to examine and
supervise the bank.
(B) Host State branches
The State bank supervisor of the home State of an insured State bank and any State bank supervisor of an
appropriate host State shall exercise its respective authority to supervise and examine the branches of the bank
in a host State in accordance with the terms of any applicable cooperative agreement between the home State
bank supervisor and the State bank supervisor of the relevant host State.
(C) Supervisory fees
Except as expressly provided in a cooperative agreement between the State bank supervisors of the home State
and any host State of an insured State bank, only the State bank supervisor of the home State of an insured State
bank may levy or charge State supervisory fees on the bank.
(2) Host State examination
(A) In general
With respect to a branch operated in a host State by an out-of-State insured State bank that resulted from an
interstate merger transaction approved under section 1831u of this title, or that was established in such State
pursuant to section 36(g) of this title, the third undesignated paragraph of section 321 of this title or section
1828(d)(4) of this title, the appropriate State bank supervisor of such host State may--
(i) with written notice to the State bank supervisor of the bank's home State and subject to the terms of any
applicable cooperative agreement with the State bank supervisor of such home State, examine such branch for
the purpose of determining compliance with host State laws that are applicable pursuant to section 1831a(j) of
this title, including those that govern community reinvestment, fair lending, and consumer protection; and
(ii) if expressly permitted under and subject to the terms of a cooperative agreement with the State bank
supervisor of the bank's home State or if such out-of-State insured State bank has been determined to be in a
troubled condition by either the State bank supervisor of the bank's home State or the bank's appropriate
Federal banking agency, participate in the examination of the bank by the State bank supervisor of the bank's
home State to ascertain that the activities of the branch in such host State are not conducted in an unsafe or
unsound manner.
(B) Notice of determination
(i) In general
The State bank supervisor of the home State of an insured State bank shall notify the State bank supervisor of
each host State of the bank if there has been a final determination that the bank is in a troubled condition.
(ii) Timing of notice
The State bank supervisor of the home State of an insured State bank shall provide notice under clause (i) as
soon as is reasonably possible, but in all cases not later than 15 business days after the date on which the State
bank supervisor has made such final determination or has received written notification of such final
determination.
(3) Host State enforcement
If the State bank supervisor of a host State determines that a branch of an out-of-State insured State bank is
violating any law of the host State that is applicable to such branch pursuant to section 1831a(j) of this title,
including a law that governs community reinvestment, fair lending, or consumer protection, the State bank
supervisor of the host State or, to the extent authorized by the law of the host State, a host State law enforcement
officer may, with written notice to the State bank supervisor of the bank's home State and subject to the terms of
any applicable cooperative agreement with the State bank supervisor of the bank's home State, undertake such
enforcement actions and proceedings as would be permitted under the law of the host State as if the branch were a
bank chartered by that host State.
(4) Cooperative agreement
(A) In general
The State bank supervisors from 2 or more States may enter into cooperative agreements to facilitate State
regulatory supervision of State banks, including cooperative agreements relating to the coordination of
examinations and joint participation in examinations.

(B) Definition
For purposes of this subsection, the term cooperative agreement means a written agreement that is signed by
the home State bank supervisor and the host State bank supervisor to facilitate State regulatory supervision of
State banks, and includes nationwide or multi-State cooperative agreements and cooperative agreements solely
between the home State and host State.
(C) Rule of construction
Except for State bank supervisors, no provision of this subsection relating to such cooperative agreements shall
be construed as limiting in any way the authority of home State and host State law enforcement officers,
regulatory supervisors, or other officials that have not signed such cooperative agreements to enforce host State
laws that are applicable to a branch of an out-of-State insured State bank located in the host State pursuant to
section 1831a(j) of this title.
(5) Federal regulatory authority
No provision of this subsection shall be construed as limiting in any way the authority of any Federal banking
agency.
(6) State taxation authority not affected
No provision of this subsection shall be construed as affecting the authority of any State or political subdivision of
any State to adopt, apply, or administer any tax or method of taxation to any bank, bank holding company, or
foreign bank, or any affiliate of any bank, bank holding company, or foreign bank, to the extent that such tax or
tax method is otherwise permissible by or under the Constitution of the United States or other Federal law.
(7) Definitions
For purpose of this section, the following definitions shall apply:
(A) Host State, home State, out-of-State bank
The terms host State, home State, and out-of-State bank have the same meanings as in section 1831u(g)
of this title.
(B) State supervisory fees
The term State supervisory fees means assessments, examination fees, branch fees, license fees, and all other
fees that are levied or charged by a State bank supervisor directly upon an insured State bank or upon branches
of an insured State bank.
(C) Troubled condition

Solely for purposes of paragraph (2)(B), an insured State bank has been determined to be in troubled
condition if the bank-(i) has a composite rating, as determined in its most recent report of examination, of 4 or 5 under the Uniform
Financial Institutions Ratings System;
(ii) is subject to a proceeding initiated by the Corporation for termination or suspension of deposit insurance;
or
(iii) is subject to a proceeding initiated by the State bank supervisor of the bank's home State to vacate,
revoke, or terminate the charter of the bank, or to liquidate the bank, or to appoint a receiver for the bank.
(D) Final determination
For purposes of paragraph (2)(B), the term final determination means the transmittal of a report of
examination to the bank or transmittal of official notice of proceedings to the bank.
(i) Flood insurance compliance by insured depository institutions
(1) Examinations
The appropriate Federal banking agency shall, during each scheduled on-site examination required by this section,
determine whether the insured depository institution is complying with the requirements of the national flood
insurance program.
(2) Report
(A) Requirement
Not later than 1 year after September 23, 1994, and biennially thereafter for the next 4 years, each appropriate
Federal banking agency shall submit a report to the Congress on compliance by insured depository institutions
with the requirements of the national flood insurance program.
(B) Contents
Each report submitted under this paragraph shall include a description of the methods used to determine
compliance, the number of institutions examined during the reporting year, a listing and total number of
institutions found not to be in compliance, actions taken to correct incidents of noncompliance, and an analysis
of compliance, including a discussion of any trends, patterns, and problems, and recommendations regarding
reasonable actions to improve the efficiency of the examinations processes.
(j) Consultation among examiners
(1) In general
Each appropriate Federal banking agency shall take such action as may be necessary to ensure that examiners
employed by the agency-(A) consult on examination activities with respect to any depository institution; and
(B) achieve an agreement and resolve any inconsistencies in the recommendations to be given to such
institution as a consequence of any examinations.
(2) Examiner-in-charge
Each appropriate Federal banking agency shall consider appointing an examiner-in-charge with respect to a
depository institution to ensure consultation on examination activities among all of the examiners of that agency
involved in examinations of the institution.
(k) One-year restrictions on Federal examiners of financial institutions
(1) In general
In addition to other applicable restrictions set forth in Title 18, the penalties set forth in paragraph (6) of this
subsection shall apply to any person who-(A) was an officer or employee (including any special Government employee) of a Federal banking agency or a
Federal reserve bank;
(B) served 2 or more months during the final 12 months of his or her employment with such agency or entity as
the senior examiner (or a functionally equivalent position) of a depository institution or depository institution
holding company with continuing, broad responsibility for the examination (or inspection) of that depository
institution or depository institution holding company on behalf of the relevant agency or Federal reserve bank;
and
(C) within 1 year after the termination date of his or her service or employment with such agency or entity,
knowingly accepts compensation as an employee, officer, director, or consultant from-(i) such depository institution, any depository institution holding company that controls such depository
institution, or any other company that controls such depository institution; or
(ii) such depository institution holding company or any depository institution that is controlled by such
depository institution holding company.
(2) Definitions
For purposes of this subsection-(A) the term depository institution includes an uninsured branch or agency of a foreign bank, if such branch
or agency is located in any State; and
(B) the term depository institution holding company includes any foreign bank or company described in
section 3106(a) of this title.
(3) Rules of construction
For purposes of this subsection, a foreign bank shall be deemed to control any branch or agency of the foreign
bank, and a person shall be deemed to act as a consultant for a depository institution, depository institution
holding company, or other company, only if such person directly works on matters for, or on behalf of, such
depository institution, depository institution holding company, or other company.
(4) Regulations
(A) In general
Each Federal banking agency shall prescribe rules or regulations to administer and carry out this subsection,
including rules, regulations, or guidelines to define the scope of persons referred to in paragraph (1)(B).
(B) Consultation required
The Federal banking agencies shall consult with each other for the purpose of assuring that the rules and
regulations issued by the agencies under subparagraph (A) are, to the extent possible, consistent, comparable,
and practicable, taking into account any differences in the supervisory programs utilized by the agencies for the
supervision of depository institutions and depository institution holding companies.
(5) Waiver
(A) Agency authority
A Federal banking agency may grant a waiver, on a case by case basis, of the restriction imposed by this
subsection to any officer or employee (including any special Government employee) of that agency, and the
Board of Governors of the Federal Reserve System may grant a waiver of the restriction imposed by this
subsection to any officer or employee of a Federal reserve bank, if the head of such agency certifies in writing
that granting the waiver would not affect the integrity of the supervisory program of the relevant Federal
banking agency.
(B) Definition
For purposes of this paragraph, the head of an agency is--
(i) the Comptroller of the Currency, in the case of the Office of the Comptroller of the Currency;
(ii) the Chairman of the Board of Governors of the Federal Reserve System, in the case of the Board of
Governors of the Federal Reserve System; and
(iii) the Chairperson of the Board of Directors, in the case of the Corporation.
(6) Penalties
(A) In general
In addition to any other administrative, civil, or criminal remedy or penalty that may otherwise apply, whenever
a Federal banking agency determines that a person subject to paragraph (1) has become associated, in the
manner described in paragraph (1)(C), with a depository institution, depository institution holding company, or
other company for which such agency serves as the appropriate Federal banking agency, the agency shall
impose upon such person one or more of the following penalties:
(i) Industry-wide prohibition order
The Federal banking agency shall serve a written notice or order in accordance with and subject to the
provisions of section 1818(e)(4) of this title for written notices or orders under paragraph (1) or (2) of section
1818(e) of this title, upon such person of the intention of the agency-(I) to remove such person from office or to prohibit such person from further participation in the conduct of
the affairs of the depository institution, depository institution holding company, or other company for a
period of up to 5 years; and
(II) to prohibit any further participation by such person, in any manner, in the conduct of the affairs of any
insured depository institution for a period of up to 5 years.
(ii) Civil monetary penalty
The Federal banking agency may, in an administrative proceeding or civil action in an appropriate United
States district court, impose on such person a civil monetary penalty of not more than $250,000. Any
administrative proceeding under this clause shall be conducted in accordance with section 1818(i) of this title.
In lieu of an action by the Federal banking agency under this clause, the Attorney General of the United
States may bring a civil action under this clause in the appropriate United States district court.
(B) Scope of prohibition order
Any person subject to an order issued under subparagraph (A)(i) shall be subject to paragraphs (6) and (7) of
section 1818(e) of this title in the same manner and to the same extent as a person subject to an order issued
under such section.
(C) Definitions
Solely for purposes of this paragraph, the appropriate Federal banking agency for a company that is not a
depository institution or depository institution holding company shall be the Federal banking agency on whose
behalf the person described in paragraph (1) performed the functions described in paragraph (1)(B).
In order to effectuate the goals of public policy

65 UDTLR 259 FDIC'S POWERS AFTER A BANK FAILURE
The court in MM & S Partners held that in light of the substantial policy of promoting the stability of the nation's
banking system
From the time of its creation by Congress, the FDIC has been charged with a very important taskit must insure
the integrity of the national banking system. Additionally, the FDIC is authorized to, and as a practical matter does,
insure the integrity of the majority of state chartered banks
The FDIC mission and task is to insure the integrity of the national
banking system, and to protect the People of the United States.
As stated in, Borrower Beware: Doench, Duhme And Section 1823 Overprotect
The Insurer When Banks Fail, Marsha Hymanson, 62 S. Cal. L. Rev. 253, 259
November, 1988,
An important function of the FDIC is its role with respect to failed
banks. When a bank has failed or, in the opinion of the FDIC, is about to
fail,15 the FDIC has three basic options: (1) it can become the receiver of
the bank and liquidate the bank; (2) it can arrange a purchase of the bank
by another financial institution, with the acquiring institution then
assuming the liabilities to the depositors of the failed bank (also
referred to as purchase and assumption); or (3) it can use a variety of
tools for bailing out the failing institution.16 If the FDIC chooses the
first option, it will bring suit to collect loans in its capacity as
receiver of the liquidating bank. If it chooses either the second or third
option, any uncollected loans are held in its corporate capacity as
insurer, and the *260 FDIC will bring suit in that capacity. Thus, whether
the FDIC is suing as receiver or in its corporate capacity is a result of
the manner in which it chooses to handle the failed bank.
As stated in, A Primer On The Special Rights And Immunities Of The Federal
Deposit Insurance Corporation, John C. Platt, Ricki S. Darby, 11 Okla.
City U. L. Rev. Fall 1986, 683, 687,
the FDIC whenever feasible employs a purchase and assumption
transaction in which the Corporation attempts to arrange for another bank
to purchase the failed bank and reopen it without interrupting banking
operations and with no loss to depositors. A purchase and assumption
involves three entities: the receiver of the failed bank, the purchasing
bank, and the FDIC as insuror. In most cases, the FDIC is appointed
receiver by the appropriate banking authority and thus acts in two
separate capacities: as receiver and as corporate insuror. . . .
As soon as the receiver is appointed, the FDIC solicits bids from other
banks for the purchase of the failed bank and assumption of its
liabilities. The bids represent the going concern value of the failed
bank. After receiving the bids, the FDIC Board of Directors determines
whether the *688 purchase and assumption is feasible according to the
statutory requirements of 12 U.S.C. 1823(e). If a bid is accepted, the
purchasing bank agrees with the receiver to buy the assets and assume the
liabilities of the failed bank.18
In the receivership of the FDIC of Washington Mutual Bank, Henderson NV,
and assumption by JPMorgan Chase Bank, National Association, Seattle, WA
On June 18, 2010 you signed a document titled Amendment To Article 1,
Final Settlement Date, as Manager, Receivership Oversight to extend the
time period for the Final Settlement to August 30, 2010.
I attach a copy of the document on June 18, 2010, that you signed, titled
Amendment to Article 1, Final Settlement Date, as Manager, Receivership
Oversight to extend the time period for the Final Settlement to August 30,
2010.
To see that the FDIC, accomplishes its mission and task to insure the
integrity of the national banking system, to insure the integrity of the
FDIC and to protect the People of the United States, I request that you
by written testimony, in a declaration, authenticate the document, that I
have personal knowledge of the facts that the public record is what it is
claimed to be.
In order to insure the integrity of the national

I request that you perform your public functions
F
What is the FDICs duty in a purchase and assumption agreement to the
People of the United States
****insure the integrity of the FDIC and maintain accountability to the

People Of The United States, to protect the public, contributing to the
accomplishment of the Corporation's purpose of maintaining a stable
banking environment, the discharge of its statutory duty
Federal Deposit Ins. Corp. v. MM & S Partners, 626 F.Supp. 681, 687, (N.D.Ill., Dec 06, 1985)
D'Oench and 1823(e) demonstrate that there is a policy in federal banking law to the effect that the FDIC
should not be bound by anything outside a bank's loan documents when it purchases those documents. See D'Oench,
315 U.S. at 457, 62 S.Ct. at 679 (federal policy to protect FDIC and the public funds which it administers against
misrepresentations in the portfolio of banks); Van Laanen, 769 F.2d at 667 (same). Typically, the FDIC must move
quickly in buying a bank's assets, and it should not be obliged to rummage through a bank's records to find the
hidden value of the notes. See Wood, 758 F.2d at 161. See also Harrison, 735 F.2d at 41213 n. 6 (federal policy to
promote stability of nation's banking system by facilitating FDIC's smooth acquisition of assets).FN4 Therefore, the
policy supporting FDIC protection in collateral agreement situations applies equally to all situations in which the
maker's defense is based on something, representations or conduct, outside of the note itself.
Federal Deposit Ins. Corp. v. Isham, 782 F.Supp. 524, 531, (D.Colo. Jan 16, 1992)
[11] *531 Under the Federal Deposit Insurance Corporation Act, the FDIC's sole purpose is to promote the
stability of the banking system. See, D'Oench, Duhme & Co. v. FDIC, 315 U.S. 447, 62 S.Ct. 676, 86 L.Ed. 956
(1942). FDIC fulfills this purpose by insuring deposits in member banks and by acting as receiver for insured banks
that have failed. See, FDIC v. Harrison, 735 F.2d 408, 412 (11th Cir.1984). Under this general scheme, FDIC's
regulatory oversight of banks is intended only to protect depositors, the insurance fund, and the public, although a
benefit may inure incidentally to bank officers and directors. See, First State Bank of Hudson County v. United
States, 599 F.2d 558, 563 (3rd Cir.1979), cert. denied, 444 U.S. 1013, 100 S.Ct. 662, 62 L.Ed.2d 642 (1980), (bank
officers and directors cannot shift their responsibility to exercise due care onto the FDIC merely by purchasing
insurance from it). Likewise, FDIC's actions as receiver for failed banks are undertaken only to fulfill its mandate to
stabilize the banking system by protecting depositors and creditors of the failed bank and the public generally . Cf.
United States v. Gaubert, 499 U.S. 315, 111 S.Ct. 1267, 113 L.Ed.2d 335 (1991). See generally, FDIC v. Bank of
Boulder, 911 F.2d 1466, 1474 (10th Cir.1990), cert. denied, 499 U.S. 904, 111 S.Ct. 1103, 113 L.Ed.2d 213 (1991),
(overarching statutory mandate to FDIC is to minimize loss to the insurance fund).
Federal Deposit Ins. Corp. v. Harrison, 735 F.2d 408, 411, (11th Cir.(Ala.), Jun 29, 1984)
[3] FDIC was created as part of the Federal Deposit Insurance Corporation Act as an instrument for insuring to
a limited extent the deposits of the banks participating *412 in the plan. The purpose of the Corporation is to promote
the stability of the banking system by preventing runs on banks by depositors and keeping open the channels of
trade and commercial exchange. See D'Oench, Duhme & Company v. FDIC, 315 U.S. 447, 62 S.Ct. 676, 686, 86
L.Ed. 956 (1942). FDIC facilitates its purpose by serving in two distinct capacities: as an insurer of deposits of
member banks and as a receiver for insured banks that have failed. As insurer one of the primary duties of the
Corporation is to pay depositors of a failed bank; as receiver FDIC marshals the assets of the failed bank, sells
acceptable assets of the failed bank to a financially sound and insured bank, and purchases and liquidates the assets
that are unacceptable to the assuming bank. Because this purchase and assumption transaction facilitates a smooth
transfer of assets with little or no disruption of normal banking operations, it is generally regarded as the most
desirable means of maintaining stability in the banking industry when a bank fails. See FDIC v. Merchants National
Bank of Mobile, 725 F.2d 634 at 637 (11th Cir.1984); Gunter v. Hutcheson, 674 F.2d 862, 865 (11th Cir.), cert.
denied, 459 U.S. 826, 103 S.Ct. 60, 74 L.Ed.2d 63 (1982). FDIC in this case was acting as receiver of Southern
National Bank, and in its corporate capacity purchased the notes of Bell, Harrison and Rixey and demanded their
payment. In its dealings with Harrison and Rixey, the Corporation performed essentially the same function as any
other assuming bank that may have acquired some of the assets of a failed bank.
Although the issue has not been addressed in this circuit, other courts have held that when FDIC acts in its
corporate capacity as receiver, its liability must be determined in the same fashion as that of a private party. See
Santoni v. FDIC, 677 F.2d 174 (1st Cir.1982); see also Lapudula & Villani, Inc. v. United States, 563 F.Supp. 782,
784 (S.D.N.Y.1983) (FDIC is not an integral part of the governmental mechanism but is rather a separate legal
entity serving essentially a proprietary rather than a sovereign function.). FN5 It has been held that when FDIC acts as
a receiver and liquidating agent for a failed bank, as it did here, it merely stands in the shoes of the insolvent bank.
FDIC v. Glickman, 450 F.2d 416, 418 (9th Cir.1971).

FN5. The Supreme Court has indicated that one factor in determining whether the federal government
should be estopped is the effect of estoppel on the public treasury. Schweiker v. Hansen, 450 U.S. 785, 101
S.Ct. 1468, 147071, 67 L.Ed.2d 685 (1981). The court in Lapadula observed that FDIC's profits do not
inure to the benefit of the United States and its losses are not borne by the United States. 563 F.Supp. at
784. The Corporation sustains itself principally through insurance premiums assessed against member
banks. Thus, the public treasury will be unaffected by FDIC's success or failure in this action. But cf. INS v.
Miranda, 459 U.S. 14, 103 S.Ct. 281, 28384, 74 L.Ed.2d 12 (1983) (fact that public fisc will not be
affected does not necessarily mean that government is subject to estoppel).
We see no reason not to apply the traditional rules of equitable estoppel to the conduct of FDIC in this case. As
a holder of the three promissory notes, FDIC was acting as any liquidating agent or receiver of an insolvent bank .
Although the debt collection activities of the Corporation, like the activities of any government agency, might be
viewed in a broad sense as **contributing to the accomplishment of the Corporation's purpose of maintaining a
stable banking environment, FDIC was primarily serving as an instrument of the banking industry when it became
receiver for the failed Southern National Bank. As would any other receiver or liquidating agent, FDIC should be
required to deal fairly with its debtors and should be held accountable for the representations of its agents. Had
Bell's promissory note been acquired by a financially sound bank in a purchase and assumption transaction, the
assuming bank would be subject to the doctrine of equitable estoppel. The Corporation should be treated no
differently.FN6
FN6. This is not to say that FDIC should be treated the same as a privately owned bank in all
circumstances. Under federal common law and 12 U.S.C. 1823(e), FDIC is afforded limited protection
that is unavailable to assuming banks. The debtor may not attempt to avoid his obligation to FDIC by
asserting a claim of fraud on the part of the failed bank or by claiming that he and the bank had entered into
a secret oral agreement prior to the acquisition of the asset by the Corporation. This special protection,
however, is afforded only when necessary to further the policy of promoting the stability of the nation's
banking system by facilitating FDIC's smooth acquisition of assets in a purchase and assumption
transaction. It is essential that the Corporation be able to acquire assets of a failed bank without fear of
unknown defenses that may have been valid against the bank. Gunter v. Hutcheson, 674 F.2d 862, 870 (11th
Cir.), cert. denied, 459 U.S. 826, 103 S.Ct. 60, 74 L.Ed.2d 63 (1982). Such protections are not necessary
where, as here, the conduct of FDIC itself gave rise to the defense of estoppel after the Corporation had
acquired the asset.
Federal Deposit Ins. Corp. v. Bank of Boulder, 865 F.2d 1134, 1136, 7 UCC Rep.Serv.2d 837 (10th Cir.
(Colo.), Sep 28, 1988)
**The FDIC is an instrumentality created by Congress to promote stability and restore and maintain confidence
in the nation's banking system. See FDIC v. Philadelphia Gear Corp., 476 U.S. 426, 432-35, 106 S.Ct. 1931, 19351936, 90 L.Ed.2d 428 (1986); S.Rep. No. 1269, 81st Cong., 2d Sess. 2-3, reprinted in, 1950 U.S.Code Cong. Serv.
3765, 3765-66 (FDIC's purpose is to bring depositors sound, effective, and uninterrupted operation of banking
system with resulting safety and liquidity of bank deposits). To achieve this objective, FDIC insures bank deposits.
One of its primary duties as insurer is to pay depositors when an insured bank fails. Gunter v. Hutcheson, 674 F.
2d 862, 865 ( 11th Cir.), cert. denied, 459 U.S. 826, 103 S.Ct. 60, 74 L.Ed.2d 63 (1982), overruled on other
grounds, Langley v. FDIC, 484 U.S. 86, 108 S.Ct. 396, 98 L.Ed.2d 340 (1987); FDIC v. Godshall, 558 F.2d 220, 221
(4th Cir.1977). In fulfilling this duty, FDIC has various options available to it. One option is to close the failed bank,
liquidate its assets, and pay the depositors their insured amounts, covering any shortfall with insurance funds. This
procedure, however, has several disadvantages. The sight of a closed bank does not promote stability or confidence
in the banking system. Accounts are frozen, checks are returned unpaid, and a significant disruption of the
intricate financial machinery results. Gunter, 674 F. 2d at 865; accord FDIC v. Merchants National Bank, 725
F.2d 634, 637 (11th Cir.) (lost jobs, checks returned unpaid, interruption of banking services in community, erosion
in public confidence, adverse impact on affiliated or independent banks), cert. denied, 469 U.S. 829, 105 S.Ct. 114,
83 L.Ed.2d 57 (1984). Additionally, paying the deposit liabilities of the failed bank may result in a substantial loss to
FDIC's insurance fund; and depositors may have to wait for some time to recover even the insured portion of their
deposits. Uninsured funds may be irretrievably lost since uninsured deposit liabilities and debts owed to other
creditors are paid on a pro rata basis only after the receivership liquidates all of the assets and covers all costs of
liquidation. Merchants National Bank, 725 F.2d at 637.
To avoid the significant problems associated with full-scale liquidation, FDIC whenever feasible employs a P &
A transaction, a dramatically effective and cost-efficient way to protect depositors, the banking system, and the
resources of the insurance fund. Generally, a P & A involves three entities: the receiver, the assuming bank, and
FDIC as insurer. When FDIC is appointed as receiver, it acts simultaneously in two separate capacities: as receiver
of the failed bank and as insurer of the deposits. See Gunter, 674 F. 2d at 865; FDIC v. Ashley, 585 F.2d 157, 160
(6th Cir.1978); Godshall, 558 F.2d at 222 n. 4, 223; Freeling v. Sebring, 296 F.2d 244, 245 (10th Cir.1961); FDIC v.
Hudson, 643 F.Supp. 496, 498 (D.Kan.1986).
Federal Deposit Ins. Corp. v. Philadelphia Gear Corp., 476 U.S. 426, 432-435, 106 S.Ct. 1931, 90 L.Ed.2d
428, 54 USLW 4525 (U.S.Okla., May 27, 1986)
When Congress created the FDIC, the Nation was in the throes of an extraordinary financial crisis. See
generally F. Allen, Since Yesterday: The Nineteen-Thirties in America 98-121 (1940); A. Schlesinger, The Crisis of
the Old Order 474-482 (1957). More than one-third of the banks in the United States open in 1929 had shut their
doors just four years later. Bureau of the Census, Historical Statistics of the United States: Colonial Times to 1970,
pt. 2, pp. 1019, 1038 (1976). In response to this financial crisis, President Roosevelt declared a national banking
holiday effective the first business day after he took office. 48 Stat. 1689. Congress in turn responded with extensive
legislation on banking, including the laws that gave the FDIC its existence.
Congress' purpose in creating the FDIC was clear. Faced with virtual panic, Congress attempted to safeguard
the hard earnings of individuals against the possibility that bank failures would deprive them of their savings.
Congress passed the 1933 provisions [i]n order to provide against a repetition of the present painful experience in
which a vast sum of assets and purchasing power is tied up. S.Rep. No. 77, 73d Cong., 1st Sess., 12 (1933)
(emphasis added). The *433 focus of Congress was therefore upon ensuring that a deposit of hard earnings
entrusted by individuals to a bank would not lead to a tangible loss in the event of a bank failure. As the chairman of
the relevant Committee in the House of Representatives explained on the floor:
[The purpose of this legislation is to protect the people of the United States in the right to have banks in which
their deposits will be safe. They have a right to expect of Congress the establishment and maintenance of a system
of banks in the United States where citizens may place their hard earnings with reasonable expectation of being
able to get them out again upon demand....
[T]he purpose of the bill is to ensure that] the community is saved from the shock of a bank failure, and every
citizen has been given an opportunity to withdraw his deposits....

The public ... demand of you and me that we provide a banking system worthy of this great Nation and banks in
which citizens may place the fruits of their toil and know that a deposit slip in return for their hard earnings will
be as safe as a Government bond. 77 Cong.Rec.**1936 3837, 3838, 3840 (1933) (remarks of Rep. Steagall).
See also id., at 3913 (remarks of Rep. Keller) ([We must make] it absolutely certain that ... any and every man,
woman, or child who puts a dollar in any bank can absolutely know that he will under no circumstances lose a single
penny of it); id., at 3924 (remarks of Rep. Green) (It is time that we pass a law so secure that when a man puts his
money in a bank he will know for sure that when he comes back it will be there). To prevent bank failure that
resulted in the tangible loss of hard assets was therefore the focus of Congress' effort in creating deposit insurance.
Despite the fact Congress revisited the deposit insurance statute in 1935, 1950, and 1960, these comments
remain the *434 best indication of Congress' underlying purpose in creating deposit insurance. The Reports on the
1935 amendments presented the definition of deposit without any specific comment. See H.R.Rep. No. 742, 74th
Cong., 1st Sess., 2 (1935); S.Rep. No. 1007, 74th Cong., 1st Sess., 2-4 (1935); H.R.Conf.Rep. No. 1822, 74th Cong.,
1st Sess., 44 (1935). The floor debates centered around changes in the Federal Reserve System made in the same
bill, not on deposit insurance. See, e.g., 79 Cong.Rec. 6568-6577, 6651-6660 (1935). Indeed, in light of the fact that
instruments denominated promissory notes seem at the time to have been considered exclusively uncontingent,
see, e.g., 16 Fed.Res.Bull. 520 (1930) (Regulation A) (defining promissory note as an unconditional promise ... to
pay [a sum certain in dollars] at a fixed or determinable future time) (emphasis added); Gilman v. Commissioner, 53
F.2d 47, 50 (CA8 1931) (The form of these [contingent] instruments referred to as promissory notes' is very
unusual), it is unlikely that Congress would have had occasion to refer expressly to contingent notes such as the
one before us here even if Congress had turned its attention to the definition of deposit when it first enacted the
provision treating money or its equivalent.
The legislative history of the 1950 amendments is similarly unhelpful, as one would expect given that the
relevant provisions were reenacted but unchanged. See S.Rep. No. 1269, 81st Cong., 2d Sess., 2-3 (1950); H.R.Rep.
No. 2564, 81st Cong., 2d Sess., 5-6 (1950), U.S.Code Cong. & Admin.News 1950, p. 3765. The Committee Reports
on the 1960 amendments likewise give no indication that the amendments' phrasing was meant to effect any
fundamental changes in the definition of deposit; those Reports state only that the changes are intended to bring into
harmony the definitions of deposit used for purposes of deposit insurance with those used in reports of condition,
and that the FDIC's rules and regulations are to be incorporated into the new definition. See H.R.Rep. No. 1827,
86th Cong., 2d Sess., 3, 5 (1960); S.Rep. No. 1821, 86th Cong., 2d Sess., 7, 10 (1960), U.S.Code Cong. &
Admin.News 1960, p. 3234. *435 See also 106 Cong.Rec. 14794 (1960) (discussing pre-1960 scheme).
Federal Deposit Ins. Corp. v. Mangiaracina, 16 N.J. Misc. 203, 198 A. 777, 779 (N.J.Cir.Ct., Mar 25, 1938)
[3][4][5] This court is of the opinion that the Federal Deposit Insurance Corporation is an instrumentality
created by the government for the public welfare. It is financed by the government and is not a corporation
organized for private profit. As a government agency, it may be considered as a corporation of the United States,
created by Congress as hereinabove stated. It is not a foreign corporation within the meaning of our state law. The
corporation, so far as it partakes of the sovereign character of the United States, is subject to suit and judicial process
only as Congress may determine. There is no authority under the act for this court of a power to impose a limitation
upon the corporation in the discharge of its statutory duty by requiring the corporation to deposit security of costs in
this cause. That Congress has power to create a corporation as an agency of the government to fulfill governmental
purposes and to endow it with powers of a private corporation is not now open to question. United States v.
Doherty, D.C., 18 F.Supp. 793 and cases cited at page 794.
Duties to the People Of The United States

Gunter v. Hutcheson, 674 F.2d 862, 869, Fed. Sec. L. Rep. P 98,654 (11th Cir.(Ga.), Apr 30, 1982)
[3] Banks and Banking 52
501
52 Banks and Banking

52XI Federal Deposit Insurance Corporation
52k501 k. In General; Nature and Status. Most Cited Cases
**Federal Deposit Insurance Corporation operates under authority derived from specific statutory scheme
passed by Congress in exercise of constitutional function or power to protect and stabilize national banking system,
and this federal law applies to control rights and obligations of FDIC. Federal Deposit Insurance Act, 2[11](a, c,
e), 2[13](e), 12 U.S.C.A. 1821(a, c, e), 1823(e).
501

52k501 k. In General; Nature and Status. Most Cited Cases
Policies behind creation of Federal Deposit Insurance Corporation are promoting stability of, and confidence in,
nation's banking system. Federal Deposit Insurance Act, 2[11](a, c, e), 2[13](e), 12 U.S.C.A. 1821(a, c, e),
1823(e).
**the rights and obligations of the FDIC, the FDIC operates under authority derived from a specific statutory
scheme passed by Congress in exercise of a constitutional function or power to protect and stabilize the national
banking system. Hence, federal law applies.
As part of duties and your duties to the People Of The United States
**
10. Federal Deposit Ins. Corp. v. Blackburn
United States District Court, E.D. Tennessee, Northeastern Division. October 29, 1985 109 F.R.D. 66
https://www.westlaw.com/Search/Results.html?query=fi
%3A&transitionType=Search&contextData=%28sc.Default%29&VR=3.0&RS=cblt1.0
CIV-2-84-388
Federal Deposit Insurance Corporation brought action against bank officers and directors arising out
of bank failure, and FDIC moved for protective order relating to discovery requests, bank officers and
directors moved for leave to file amendment to their answer and to file counterclaim, and FDIC moved to
recover costs of service of process....
...The FDIC moved on February 22, 1985, for a protective order pursuant to Rule 26(c), Federal Rules of Civil
Procedure, which would have (1) quashed all pending discovery requests and (2) prohibited defendants from filing
additional discovery requests until such time as defendants have reviewed certain documents which the FDIC
proposes to submit voluntarily....
...Federal Deposit Insurance Corporations conduct in connection with manner in which purchase and assumption
agreement relating to bank which failed was handled between FDIC/corporate, FDIC/receiver, and another bank was
irrelevant to action by FDIC against bank officers and directors related to bank failure....
... The FDIC shall respond to defendant Wests pending discovery requests within thirty-three days of entry of this
Memorandum and Order and as otherwise required by Rules 33(a) and 34(b), Federal Rules of Civil Procedure....
... No one objected, however, to the Memorandum to Counsel, see Rule 72(a), Federal Rules of Civil Procedure,
nor did anyone ask for a discovery conference as suggested therein....
**11. F.D.I.C. v. McCaffree
United States District Court, D. Kansas. December 27, 2012 289 F.R.D. 331 2012 WL 6726406 11-2447-JAR
FINANCE AND BANKING - FDIC. FDIC did not violate duty to preserve documents and evidence,
even though it did not maintain failed banks filing system.
...Federal Deposit Insurance Corporation (FDIC), as receiver of failed bank, would be required to provide further
responses to discovery requests by banks former directors and executive officers, to the extent such documents
were in its possession, custody, or control, in action alleging negligence and other claims, even though FDIC stated in
good faith that it had fully responded to the discovery requests, in light of evidence showing problems associated
with document...
...Federal Deposit Insurance Corporation (FDIC), as receiver of failed bank, would not be required to produce
documents maintained by another bank in response to discovery requests by failed banks former directors and
executive officers, in action alleging negligence and other claims, absent evidence that FDIC had a legal right to
obtain such documents. Fed.Rules Civ.Proc.Rule 34(a)(1), 28 U.S.C.A....
...Failure by Federal Deposit Insurance Corporation (FDIC), as receiver of failed bank, to maintain banks
documents as they were kept in the usual course of business did not breach its duty to conduct a reasonable search
for documents responsive to discovery requests of banks former directors and executive officers, in action alleging
negligence and other claims. Fed.Rules Civ.Proc.Rule 34(b)(2)(E), 28 U.S.C.A....
...Federal Deposit Insurance Corporation (FDIC), as receiver of failed bank, did not violate its duty to preserve
documents and evidence for future litigation, even though it did not maintain banks filing system, where FDIC
captured the vast majority of documents it knew or should have known were relevant to litigation at the time it
assumed control of the bank and began efforts to image the banks files....
**
12. F.D.I.C. v. Hurwitz
United States District Court, S.D. Texas. August 23, 2005 384 F.Supp.2d 1039 2005 WL 2044560 CIV.A. H-953956
LITIGATION - Sanctions. FDIC sanctioned $72 million in connection with attempted debt for nature
swap.
...D.FDIC....
...34.Arrangement....
...35.Discovery....
...Sanctions were warranted against Federal Deposit Insurance Corporation (FDIC), in its action against
businessman for gross negligence arising from failure of thrift, for discovery abuse, based on FDICs continual
flouting of orders, evasive and false answers at depositions and in interrogatories, and failure to produce or
destruction of documents. Fed.Rules Civ.Proc.Rule 37, 28 U.S.C.A....
F.D.I.C. v. Hurwitz, 384 F.Supp.2d 1039 (S.D.Tex. Aug 23, 2005)

Background: Federal Deposit Insurance Corporation (FDIC) sued chief executive officer (CEO) of two companies
that owned stock in thrift's holding company, alleging failure to maintain thrift's net-worth requirement, and gross
negligence in management of investment portfolio. Following FDIC's dismissal of its claims, CEO moved for
sanctions.
Holdings: The District Court, Hughes, J., held that:
(1) agreement, under which FDIC surreptitiously paid Office of Thrift Supervision (OTS) to bring administrative
claim against CEO, was illegal;
(2) FDIC waived work product and attorney-client privilege by sharing documents with Vice President of United
States concerning claims against CEO;
(3) sanctions were appropriate; and
(4) appropriate amount of sanctions was $72,255,147.51.
Order accordingly.
505

52k505 k. Powers, Functions and Dealings in General. Most Cited Cases
Actions of Council on Environmental Quality (CEQ), in connection with attempted debt for nature swap
under which businessman's holdings of redwood forests would be traded for government's claims against him
relating to failed thrift, including CEQ's action of receiving disclosures from Federal Deposit Insurance Corporation
(FDIC), were illegal, in that CEQ was purely advisory body, its statute allowed it to study and recommend to
President about trends in the environment, and it had no lawful authority to broker deals within executive branch or
between it and citizens. National Environmental Policy Act of 1969, 204, 42 U.S.C.A. 4344.
[7] Building and Loan Associations 66
42(6)
66 Building and Loan Associations

66k42 Insolvency and Receivers
66k42(6) k. Rights, Powers, Duties, and Liabilities of Receiver in General. Most Cited Cases
Agreement, under which **Federal Deposit Insurance Corporation (FDIC) surreptitiously paid **Office of
Thrift Supervision (OTS) to bring administrative claim against **chief executive officer (CEO) of two companies
that owned stock in failed thrift's holding company, was illegal in that it violated Congress's mandate to both
agencies. Home Owners' Loan Act, 3(i), 9(m), as amended, 12 U.S.C.A. 1462a(i), 1467(m); Federal Deposit
Insurance Act, 2 [1], 2[11](c), 12 U.S.C.A. 1811, 1821(c).
505


Building and Loan Associations 66
42(6)

Agreement, under which Federal Deposit Insurance Corporation (FDIC) surreptitiously paid Office of Thrift
Supervision (OTS) to bring administrative claim against chief executive officer (CEO) of two companies that owned
stock in failed thrift's holding company, was illegal in that it exceeded FDIC's limited powers. Federal Deposit
Insurance Act, 2[9](a-d), 2[10], 12 U.S.C.A. 1819(a-d), 1820.
505

42(6)

stock in failed thrift's holding company, violated statute permitting FDIC to make recommendations to OTS. Federal
Deposit Insurance Act, 2[8] (t), 12 U.S.C.A. 1818(t).
[12] United States 393
85
393 United States

393VI Fiscal Matters
393k85 k. Appropriations. Most Cited Cases
stock in failed thrift's holding company, violated appropriations law, in that FDIC transferred its resources to OTS to
bring claims that FDIC could not, FDIC supplied appropriated funds to agency not entitled to receive them, and
OTS improperly took money from another agency to fulfill its charge. U.S.C.A. Const. Art. 1, 9, cl. 7; Home
Owners' Loan Act, 9(m), as amended, 12 U.S.C.A. 1467(m); Federal Home Loan Bank Act, 21A(m)(2), as
amended, 12 U.S.C.A. 1441a(m)(2); Federal Deposit Insurance Act, 2[11] (a)(4)(ii)(5), (a)(6), 2[11A](a)(2),
(c), 12 U.S.C.A. 1821(a)(4)(ii)(5), (a)(6), 1821a(a)(2), (c); 31 U.S.C.A. 1301(a).
85
393 United States

**Under the Purpose Law, even if a deal between agencies may save money or generate other benefits, agencies
may spend appropriated funds only as Congress says. 31 U.S.C.A. 1301(a).
85
393 United States

**An agency may not pay another to do what the first may not do directly.
40
393 United States

393I Government in General
393k40 k. Authority and Powers of Officers and Agents and Exercise Thereof. Most Cited Cases
Agencies may work for each other only if they act under: **(1) specific statutory authorization, or (2) the
Economy Act, if no specific statute exists. 31 U.S.C.A. 1535(a).
505

42(6)

stock in failed thrift's holding company, violated Economy Act, in that Congress's lack of authorization of agreement
precluded funds from being available, FDIC did not have proper express agreement, OTS could not supply
requested services without support from FDIC, OTS's role was governmental rather than commercial, and OTS was
subsidizing FDIC's work. 31 U.S.C.A. 1501, 1535(a); 48 C.F.R. 17.503(a), 17.504(a, b).
85
393 United States

The Economy Act does not override the Purpose Law, under which agencies may spend appropriated funds only
as Congress says; agencies must still use their funds only as authorized. 31 U.S.C.A. 1535(a).
**18. In re Selected Somersworth Bank Cases

United States District Court, D. Maine. March 16, 1993 148 F.R.D. 1 1993 WL 104909 CIV. 92-267, CIV. 92-269,
CIV. 92-270, CIV. 92-271, CIV. 92-272, CIV. 92-276, CIV. 92-277, CIV. 92-149, CIV. 92-273, CIV. 92-150, CIV. 92274, CIV. 92-151, CIV. 92-275
Defendants moved to dismiss based on Federal Deposit Insurance Corporations (FDICs) history of
discovery violations. The District Court, Gene Carter, Chief Judge, held that sanction short of outright
dismissal of FDICs action was appropriate. So ordered.
...Therefore, in order to assure the ongoing preparation of these cases for trials to commence in May 1993, in the
event that dismissal is not ordered, it is hereby ORDERED that the FDIC: (1)Forthwith undertake to assemble,
through its substitute counsel in these cases and its other operatives, every scrap of paper or other type of written
record within the scope of any Defendants Request for Production of Documents filed in any one or more of these
cases, including all original documents and any copies thereof, now in the possession, custody, and/or control of the
FDIC, its counsel, officers, employees, agencies, private contractors, and all and every other person, legal entity,
institution, firm, corporation...
...Federal Deposit Insurance Corporation (FDIC) would be required, as sanction for its failure to produce
documents and to attend and answer questions at noticed depositions, to produce all documents that were subject
of production requests either for parties or for in-camera inspection by court, to precisely set forth the basis for any
discovery objections it had, and to designate officers and agents for deposition, with no further extensions in which to
comply with district courts orders, and subject to ultimate sanction of dismissal for lack of timely and full compliance;
such a sanction, rather than extreme sanction of outright dismissal, was appropriate for FDICs...
...(5)On or before March 22, 1993, shall designate one or more officers, directors, or managing agents, or other
persons who consent to testify on its behalf, pursuant to Federal Rules of Civil Procedure 30(b)(6), to be deposed
pursuant to the original Notices of Deposition of FDIC filed in each of these cases on or about December 15, 1992,
that precipitated the deposition of January 20, 1993, to which no designation has ever been made by the FDIC and at
which deposition the FDICs original counsel appeared and declined to present a deponent or to produce any
documents...
...AND IT IS FURTHER ORDERED that all counsel for Defendants herein proceed forthwith to examine the
documents produced by the FDIC pursuant to paragraph (2)(a) hereinabove as soon as advised by FDICs counsel
of the location within the city of Portland, Maine of said documents, and said counsel shall file with the Court and
serve on opposing counsel, on or before April 12, 1993, a list identifying any and all documents not produced which
are within the scope of an original Request for Product of Documents which counsel has a good-faith basis to
believe are in existence and subject to FDICs...
12 U.S.C. 1823. Corporation monies
(a) Investment of Corporation's funds

(1) Authority
Funds held in the Deposit Insurance Fund or the FSLIC Resolution Fund, that are not otherwise employed shall be
invested in obligations of the United States or in obligations guaranteed as to principal and interest by the United
States.
(2) Limitation
The Corporation shall not sell or purchase any obligations described in paragraph (1) for its own account, at any
one time aggregating in excess of $100,000, without the approval of the Secretary of the Treasury. The Secretary
may approve a transaction or class of transactions subject to the provisions of this paragraph under such
conditions as the Secretary may determine.
(b) Depository accounts
The depository accounts of the Corporation shall be kept with the Treasurer of the United States, or, with the
approval of the Secretary of the Treasury, with a Federal Reserve bank, or with a depository institution designated as
a depository or fiscal agent of the United States: Provided, That the Secretary of the Treasury may waive the
requirements of this subsection under such conditions as he may determine: And provided further, That this
subsection shall not apply to the establishment and maintenance in any depository institution for temporary purposes
of depository accounts not in excess of $50,000 in any one depository institution, or to the establishment and
maintenance in any depository institution of any depository accounts to facilitate the payment of insured deposits, or
the making of loans to, or the purchase of assets of, insured depository institutions. When designated for that
purpose by the Secretary of the Treasury, the Corporation shall be a depositary of public moneys, except receipts
from customs, under such regulations as may be prescribed by the said Secretary, and may also be employed as a
financial agent of the Government. It shall perform all such reasonable duties as depositary of public moneys and
financial agent of the Government as may be required of it.
(c) Assistance to insured depository institutions
(1) The Corporation is authorized, in its sole discretion and upon such terms and conditions as the Board of
Directors may prescribe, to make loans to, to make deposits in, to purchase the assets or securities of, to assume the
liabilities of, or to make contributions to, any insured depository institution-(A) if such action is taken to prevent the default of such insured depository institution;
(B) if, with respect to an insured bank in default, such action is taken to restore such insured bank to normal
operation; or
(C) if, when severe financial conditions exist which threaten the stability of a significant number of insured
depository institutions or of insured depository institutions possessing significant financial resources, such action
is taken in order to lessen the risk to the Corporation posed by such insured depository institution under such
threat of instability.
(2)(A) In order to facilitate a merger or consolidation of another [FN1] insured depository institution described in
subparagraph (B) with another insured depository institution or the sale of any or all of the assets of such insured
depository institution or the assumption of any or all of such insured depository institution's liabilities by another
insured depository institution, or the acquisition of the stock of such insured depository institution, the Corporation
is authorized, in its sole discretion and upon such terms and conditions as the Board of Directors may prescribe-(i) to purchase any such assets or assume any such liabilities;
(ii) to make loans or contributions to, or deposits in, or purchase the securities of, such other insured depository
institution or the company which controls or will acquire control of such other insured depository institution;
(iii) to guarantee such other insured depository institution or the company which controls or will acquire control
of such other insured depository institution against loss by reason of such insured institution's merging or
consolidating with or assuming the liabilities and purchasing the assets of such insured depository institution or by
reason of such company acquiring control of such insured depository institution; or
(iv) to take any combination of the actions referred to in subparagraphs (i) through (iii).
(B) For the purpose of subparagraph (A), the insured depository institution must be an insured depository
institution-(i) which is in default;
(ii) which, in the judgment of the Board of Directors, is in danger of default; or
(iii) which, when severe financial conditions exist which threaten the stability of a significant number of insured
depository institutions or of insured depository institutions possessing significant financial resources, is
determined by the Corporation, in its sole discretion, to require assistance under subparagraph (A) in order to
lessen the risk to the Corporation posed by such insured depository institution under such threat of instability.
(C) Any action to which the Corporation is or becomes a party by acquiring any asset or exercising any other
authority set forth in this section shall be stayed for a period of 60 days at the request of the Corporation.
(3) The Corporation may provide any person acquiring control of, merging with, consolidating with or acquiring the
assets of an insured depository institution under subsection (f) or (k) of this section with such financial assistance as
it could provide an insured institution under this subsection.
(4) Least-cost resolution required
(A) In general
Notwithstanding any other provision of this chapter, the Corporation may not exercise any authority under this
subsection or subsection (d), (f), (h), (i), or (k) of this section with respect to any insured depository institution
unless-(i) the Corporation determines that the exercise of such authority is necessary to meet the obligation of the
Corporation to provide insurance coverage for the insured deposits in such institution; and
(ii) the total amount of the expenditures by the Corporation and obligations incurred by the Corporation
(including any immediate and long-term obligation of the Corporation and any direct or contingent liability for
future payment by the Corporation) in connection with the exercise of any such authority with respect to such
institution is the least costly to the Deposit Insurance Fund of all possible methods for meeting the Corporation's
obligation under this section.
(B) Determining least costly approach
In determining how to satisfy the Corporation's obligations to an institution's insured depositors at the least
possible cost to the Deposit Insurance Fund, the Corporation shall comply with the following provisions:
(i) Present-value analysis; documentation required
The Corporation shall-(I) evaluate alternatives on a present-value basis, using a realistic discount rate;
(II) document that evaluation and the assumptions on which the evaluation is based, including any
assumptions with regard to interest rates, asset recovery rates, asset holding costs, and payment of contingent
liabilities; and
(III) retain the documentation for not less than 5 years.
(ii) Foregone tax revenues
Federal tax revenues that the Government would forego as the result of a proposed transaction, to the extent
reasonably ascertainable, shall be treated as if they were revenues foregone by the Deposit Insurance Fund.
(C) Time of determination
(i) General rule
For purposes of this subsection, the determination of the costs of providing any assistance under paragraph (1)
or (2) or any other provision of this section with respect to any depository institution shall be made as of the
date on which the Corporation makes the determination to provide such assistance to the institution under this
section.
(ii) Rule for liquidations
For purposes of this subsection, the determination of the costs of liquidation of any depository institution shall
be made as of the earliest of-(I) the date on which a conservator is appointed for such institution;
(II) the date on which a receiver is appointed for such institution; or
(III) the date on which the Corporation makes any determination to provide any assistance under this section
with respect to such institution.
(D) Liquidation costs
In determining the cost of liquidating any depository institution for the purpose of comparing the costs under
subparagraph (A) (with respect to such institution), the amount of such cost may not exceed the amount which is
equal to the sum of the insured deposits of such institution as of the earliest of the dates described in subparagraph
(C), minus the present value of the total net amount the Corporation reasonably expects to receive from the
disposition of the assets of such institution in connection with such liquidation.
(E) Deposit Insurance Fund available for intended purpose only
(i) In general
After December 31, 1994, or at such earlier time as the Corporation determines to be appropriate, the
Corporation may not take any action, directly or indirectly, with respect to any insured depository institution
that would have the effect of increasing losses to the Deposit Insurance Fund by protecting-(I) depositors for more than the insured portion of deposits (determined without regard to whether such
institution is liquidated); or
(II) creditors other than depositors.
(ii) Deadline for regulations
The Corporation shall prescribe regulations to implement clause (i) not later than January 1, 1994, and the
regulations shall take effect not later than January 1, 1995.
(iii) Purchase and assumption transactions
No provision of this subparagraph shall be construed as prohibiting the Corporation from allowing any person
who acquires any assets or assumes any liabilities of any insured depository institution for which the
Corporation has been appointed conservator or receiver to acquire uninsured deposit liabilities of such
institution so long as the insurance fund does not incur any loss with respect to such deposit liabilities in an
amount greater than the loss which would have been incurred with respect to such liabilities if the institution
had been liquidated.

(F) Discretionary determinations
Any determination which the Corporation may make under this paragraph shall be made in the sole discretion of
the Corporation.
(G) Systemic risk
(i) Emergency determination by Secretary of the Treasury
Notwithstanding subparagraphs (A) and (E), if, upon the written recommendation of the Board of Directors
(upon a vote of not less than two-thirds of the members of the Board of Directors) and the Board of Governors
of the Federal Reserve System (upon a vote of not less than two-thirds of the members of such Board), the
Secretary of the Treasury (in consultation with the President) determines that-(I) the Corporation's compliance with subparagraphs (A) and (E) with respect to an insured depository
institution for which the Corporation has been appointed receiver would have serious adverse effects on
economic conditions or financial stability; and
(II) any action or assistance under this subparagraph would avoid or mitigate such adverse effects,
the Corporation may take other action or provide assistance under this section for the purpose of winding
up the insured depository institution for which the Corporation has been appointed receiver as necessary to
avoid or mitigate such effects.
(ii) Repayment of loss
(I) In general
The Corporation shall recover the loss to the Deposit Insurance Fund arising from any action taken or
assistance provided with respect to an insured depository institution under clause (i) from 1 or more special
assessments on insured depository institutions, depository institution holding companies (with the
concurrence of the Secretary of the Treasury with respect to holding companies), or both, as the Corporation
determines to be appropriate.
(II) Treatment of depository institution holding companies
For purposes of this clause, sections 1817(c)(2) and 1828(h) of this title shall apply to depository institution
holding companies as if they were insured depository institutions.
(III) Regulations
The Corporation shall prescribe such regulations as it deems necessary to implement this clause. In
prescribing such regulations, defining terms, and setting the appropriate assessment rate or rates, the
Corporation shall establish rates sufficient to cover the losses incurred as a result of the actions of the
Corporation under clause (i) and shall consider: the types of entities that benefit from any action taken or
assistance provided under this subparagraph; economic conditions, the effects on the industry, and such other
factors as the Corporation deems appropriate and relevant to the action taken or the assistance provided. Any
funds so collected that exceed actual losses shall be placed in the Deposit Insurance Fund.
(iii) Documentation required
The Secretary of the Treasury shall-(I) document any determination under clause (i); and
(II) retain the documentation for review under clause (iv).
(iv) GAO review
The Comptroller General of the United States shall review and report to the Congress on any determination
under clause (i), including-(I) the basis for the determination;
(II) the purpose for which any action was taken pursuant to such clause; and
(III) the likely effect of the determination and such action on the incentives and conduct of insured depository
institutions and uninsured depositors.
(v) Notice
(I) In general
Not later than 3 days after making a determination under clause (i), the Secretary of the Treasury shall
provide written notice of any determination under clause (i) to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Banking, Finance and Urban Affairs of the House of
Representatives.
(II) Description of basis of determination
The notice under subclause (I) shall include a description of the basis for any determination under clause (i).
(H) Rule of construction
No provision of law shall be construed as permitting the Corporation to take any action prohibited by paragraph
(4) unless such provision expressly provides, by direct reference to this paragraph, that this paragraph shall not
apply with respect to such action.
(5) The Corporation may not use its authority under this subsection to purchase the voting or common stock of an
insured depository institution. Nothing in the preceding sentence shall be construed to limit the ability of the
Corporation to enter into and enforce covenants and agreements that it determines to be necessary to protect its
financial interest.
(6)(A) During any period in which an insured depository institution has received assistance under this subsection
and such assistance is still outstanding, such insured depository institution may defer the payment of any State or
local tax which is determined on the basis of the deposits held by such insured depository institution or of the
interest or dividends paid on such deposits.
(B) When such insured depository institution no longer has any outstanding assistance, such insured depository
institution shall pay all taxes which were deferred under subparagraph (A). Such payments shall be made in
accordance with a payment plan established by the Corporation, after consultation with the applicable State and
local taxing authorities.
(7) The transfer of any assets or liabilities associated with any trust business of an insured depository institution in
default under subparagraph (2)(A) shall be effective without any State or Federal approval, assignment, or consent
with respect thereto.
(8) Assistance before appointment of conservator or receiver
(A) In general
Subject to the least-cost provisions of paragraph (4), the Corporation shall consider providing direct financial
assistance under this section for depository institutions before the appointment of a conservator or receiver for
such institution only under the following circumstances:
(i) Troubled condition criteria
The Corporation determines-(I) grounds for the appointment of a conservator or receiver exist or likely will exist in the future unless the
depository institution's capital levels are increased; and
(II) it is unlikely that the institution can meet all currently applicable capital standards without assistance.
(ii) Other criteria
The depository institution meets the following criteria:
(I) The appropriate Federal banking agency and the Corporation have determined that, during such period of
time preceding the date of such determination as the agency or the Corporation considers to be relevant, the
institution's management has been competent and has complied with applicable laws, rules, and supervisory
directives and orders.
(II) The institution's management did not engage in any insider dealing, speculative practice, or other abusive
activity.
(B) Public disclosure
Any determination under this paragraph to provide assistance under this section shall be made in writing and
published in the Federal Register.
(9) Any assistance provided under this subsection may be in subordination to the rights of depositors and other
creditors.
(10) In its annual report to the Congress, the Corporation shall report the total amount it has saved, or estimates it
has saved, by exercising the authority provided in this subsection.
(11) Unenforceability of certain agreements
No provision contained in any existing or future standstill, confidentiality, or other agreement that, directly or
indirectly-(A) affects, restricts, or limits the ability of any person to offer to acquire or acquire,
(B) prohibits any person from offering to acquire or acquiring, or
(C) prohibits any person from using any previously disclosed information in connection with any such offer to
acquire or acquisition of,
all or part of any insured depository institution, including any liabilities, assets, or interest therein, in connection
with any transaction in which the Corporation exercises its authority under section 1821 of this title or this
section, shall be enforceable against or impose any liability on such person, as such enforcement or liability
shall be contrary to public policy.
**(d) Sale of assets to Corporation
(1) In general
Any conservator, receiver, or liquidator appointed for any insured depository institution in default, including the
Corporation acting in such capacity, shall be entitled to offer the assets of such depository institutions for sale to
the Corporation or as security for loans from the Corporation.
(2) Proceeds
The proceeds of every sale or loan of assets to the Corporation shall be utilized for the same purposes and in the
same manner as other funds realized from the liquidation of the assets of such depository institutions.
(3) Rights and powers of Corporation
(A) In general
With respect to any asset acquired or liability assumed pursuant to this section, the Corporation shall have all of
the rights, powers, privileges, and authorities of the Corporation as receiver under sections 1821 and 1825(b) of
this title.
(B) Rule of construction
Such rights, powers, privileges, and authorities shall be in addition to and not in derogation of any rights,
powers, privileges, and authorities otherwise applicable to the Corporation.
(C) Fiduciary responsibility
In exercising any right, power, privilege, or authority described in subparagraph (A), the Corporation shall
continue to be subject to the fiduciary duties and obligations of the Corporation as receiver to claimants against
the insured depository institution in receivership.
(D) Disposition of assets
In exercising any right, power, privilege, or authority described in subparagraph (A) regarding the sale or
disposition of assets sold to the Corporation pursuant to paragraph (1), the Corporation shall conduct its
operations in a manner which-**(i) maximizes the net present value return from the sale or disposition of such assets;
**(ii) minimizes the amount of any loss realized in the resolution of cases;
**(iii) ensures adequate competition and fair and consistent treatment of offerors;
**(iv) prohibits discrimination on the basis of race, sex, or ethnic groups in the solicitation and consideration
of offers; and
(v) maximizes the preservation of the availability and affordability of residential real property for low- and
moderate-income individuals.
(4) Loans
The Corporation, in its discretion, may make loans on the security of or may purchase and liquidate or sell any
part of the assets of an insured depository institution which is now or may hereafter be in default.
(e) Agreements against interests of Corporation
(1) In general
No agreement which tends to diminish or defeat the interest of the Corporation in any asset acquired by it under
this section or section 1821 of this title, either as security for a loan or by purchase or as receiver of any insured
depository institution, shall be valid against the Corporation unless such agreement-(A) is in writing,
(B) was executed by the depository institution and any person claiming an adverse interest thereunder, including
the obligor, contemporaneously with the acquisition of the asset by the depository institution,
(C) was approved by the board of directors of the depository institution or its loan committee, which approval
shall be reflected in the minutes of said board or committee, and
(D) has been, continuously, from the time of its execution, an official record of the depository institution.
(2) Exemptions from contemporaneous execution requirement
An agreement to provide for the lawful collateralization of-(A) deposits of, or other credit extension by, a Federal, State, or local governmental entity, or of any depositor
referred to in section 1821(a)(2) of this title, including an agreement to provide collateral in lieu of a surety
bond;
(B) bankruptcy estate funds pursuant to section 345(b)(2) of Title 11;
(C) extensions of credit, including any overdraft, from a Federal reserve bank or Federal home loan bank; or
(D) one or more qualified financial contracts, as defined in section 1821(e)(8)(D) of this title,
shall not be deemed invalid pursuant to paragraph (1)(B) solely because such agreement was not executed
contemporaneously with the acquisition of the collateral or because of pledges, delivery, or substitution of
the collateral made in accordance with such agreement.
(f) Assisted emergency interstate acquisitions
(1) This subsection shall apply only to an acquisition of an insured bank or a holding company by an out-of-State
bank [FN2] savings association or out-of-State holding company for which the Corporation provides assistance
under subsection (c) of this section.

(2)(A) Whenever an insured bank with total assets of $500,000,000 or more (as determined from its most recent
report of condition) is in default, the Corporation, as receiver, may, in its discretion and upon such terms and
conditions as the Corporation may determine, arrange the sale of assets of the bank in default and the assumption of
the liabilities of the bank in default, including the sale of such assets to and the assumption of such liabilities by an
insured depository institution located in the State where the bank in default was chartered but established by an outof-State bank or holding company. Where otherwise lawfully required, a transaction under this subsection must be
approved by the primary Federal or State supervisor of all parties thereto.
(B)(i) Before making a determination to take any action under subparagraph (A), the Corporation shall consult the
State bank supervisor of the State in which the insured bank in default was chartered.
(ii) The State bank supervisor shall be given a reasonable opportunity, and in no event less than forty-eight hours, to
object to the use of the provisions of this paragraph. Such notice may be provided by the Corporation prior to its
appointment as receiver, but in anticipation of an impending appointment.
(iii) If the State supervisor objects during such period, the Corporation may use the authority of this paragraph only
by a vote of 75 percent of the Board of Directors. The Board of Directors shall provide to the State supervisor, as
soon as practicable, a written certification of its determination.
(3) Emergency interstate acquisitions of insured banks in danger of default
(A) Acquisition of insured banks in danger of default
One or more out-of-State banks or out-of-State holding companies may acquire and retain all or part of the shares
or assets of, or otherwise acquire and retain-(i) an insured bank in danger of default which has total assets of $500,000,000 or more; or
(ii) 2 or more affiliated insured banks in danger of default which have aggregate total assets of $500,000,000 or
more, if the aggregate total assets of such banks is equal to or greater than 33 percent of the aggregate total
assets of all affiliated insured banks.
(B) Acquisition of a holding company or other bank affiliate
If one or more out-of-State banks or out-of-State holding companies acquire 1 or more affiliated insured banks
under subparagraph (A) the aggregate total assets of which is equal to or greater than 33 percent of the aggregate
total assets of all affiliated insured banks, any such out-of-State bank or out-of-State holding company may also,
as part of the same transaction, acquire and retain the shares or assets of, or otherwise acquire and retain-(i) the holding company which controls the affiliated insured banks so acquired; or
(ii) any other affiliated insured bank.
(C) Request for assistance by corporate board of directors

The Corporation may assist an acquisition or merger authorized under subparagraph (A) only if the board of
directors or trustees of each insured bank in danger of default which is being acquired has requested in writing
that the Corporation assist the acquisition or merger.
(D) Certain acquisitions authorized after assistance is provided
Notwithstanding paragraph (1), if-(i) at any time after August 10, 1987, the Corporation provides any assistance under subsection (c) of this
section to an insured bank; and
(ii) at the time such assistance is granted, the insured bank, the holding company which controls the insured
bank (if any), or any affiliated insured bank is eligible to be acquired by an out-of-State bank or out-of-State
holding company under this paragraph,
the insured bank, the holding company, and such other affiliated insured bank shall remain eligible, subject to
such terms and conditions as the Corporation (in the Corporation's discretion) may impose, to be acquired by an
out-of-State bank or out-of-State holding company under this paragraph as long as any portion of such
assistance remains outstanding.
(E) State bank supervisor approval
The Corporation may take no final action in connection with any acquisition under this paragraph unless the State
bank supervisor of the State in which the bank in danger of default is located approves the acquisition.
(F) Other requirements not affected
This paragraph does not affect any other requirement under Federal or State law for regulatory approval of an
acquisition under this paragraph.
(G) Acquisition may be conditioned on receipt of consideration for Corporation's assistance
Any acquisition described in subparagraph (D) may be conditioned on the receipt of such consideration for the
Corporation's assistance as the Board of Directors deems appropriate.
(4)(A) Acquisitions not subject to certain other laws
Section 1842(d) of this title, any provision of State law, and section 1730a(e)(3) of this title shall not apply to
prohibit any acquisition under paragraph (2) or (3), except that an out-of-State bank may make such an acquisition
only if such ownership is otherwise specifically authorized.
(B) Any subsidiary created by operation of this subsection may retain and operate any existing branch or branches of
the institution merged with or acquired under paragraph (2) or (3), but otherwise shall be subject to the conditions
upon which a national bank may establish and operate branches in the State in which such insured institution is
located.
(C) No insured institution acquired under this subsection shall after it is acquired move its principal office or any
branch office which it would be prohibited from moving if the institution were a national bank.
(D) Subsequent nonemergency interstate acquisitions subject to State law
(i) In general
Any out-of-State bank holding company which acquires control of an insured bank in any State under paragraph
(2) or (3) may acquire any other insured bank and establish branches in such State to the same extent as a bank
holding company whose insured bank subsidiaries' operations are principally conducted in such State may acquire
any other insured bank or establish branches.
(ii) Delayed date of applicability
Clause (i) shall not apply with respect to any out-of-State bank holding company referred to in such clause before
the earlier of-(I) the end of the 2-year period beginning on the date the acquisition referred to in such clause with respect to
such company is consummated; or
(II) the end of any period established under State law during which such out-of-State bank holding company
may not be treated as a bank holding company whose insured bank subsidiaries' operations are principally
conducted in such State for purposes of acquiring other insured banks or establishing bank branches.
(iii) Determination of principally conducted
For purposes of this subparagraph, the State in which the operations of a holding company's insured bank
subsidiaries are principally conducted is the State determined under section 1842(d) of this title with respect to
such holding company.
(E) Certain State interstate banking laws inapplicable
Any holding company which acquires control of any insured bank or holding company under paragraph (2) or (3) or
subparagraph (D) of this paragraph shall not, by reason of such acquisition, be required under the law of any State to
divest any other insured bank or be prevented from acquiring any other bank or holding company.
(5) In determining whether to arrange a sale of assets and assumption of liabilities or an acquisition or a merger
under the authority of paragraph (2) or (3), the Corporation may solicit such offers or proposals as are practicable
from any prospective purchasers or merger partners it determines, in its sole discretion, are both qualified and
capable of acquiring the assets and liabilities of the bank in default or the bank in danger of default.
(6)(A) If, after receiving offers, the offer presenting the lowest expense to the Corporation, that is in a form and with
conditions acceptable to the Corporation (hereinafter referred to as the lowest acceptable offer), is from an offeror
that is not an existing in-State bank of the same type as the bank that is in default or is in danger of default (or,
where the bank is an insured bank other than a mutual savings bank, the lowest acceptable offer is not from an inState holding company), the Corporation shall permit the offeror which made the initial lowest acceptable offer and
each offeror who made an offer the estimated cost of which to the Corporation was within 15 per centum or
$15,000,000, whichever is less, of the initial lowest acceptable offer to submit a new offer.
(B) In considering authorizations under this subsection, the Corporation shall give consideration to the need to
minimize the cost of financial assistance and to the maintenance of specialized depository institutions. The
Corporation shall authorize transactions under this subsection considering the following priorities:
(i) First, between depository institutions of the same type within the same State.
(ii) Second, between depository institutions of the same type-(I) in different States which by statute specifically authorize such acquisitions; or
(II) in the absence of such statutes, in different States which are contiguous.
(iii) Third, between depository institutions of the same type in different States other than the States described in
clause (ii).
(iv) Fourth, between depository institutions of different types in the same State.
(v) Fifth, between depository institutions of different types-(I) in different States which by statute specifically authorize such acquisitions; or
(II) in the absence of such statutes, in different States which are contiguous.
(vi) Sixth, between depository institutions of different types in different States other than the States described in
clause (v).
(C) Minority bank priority
In the case of a minority-controlled bank, the Corporation shall seek an offer from other minority-controlled banks
before proceeding with the bidding priorities set forth in subparagraph (B).
(D) In determining the cost of offers and reoffers, the Corporation's calculations and estimations shall be
determinative. The Corporation may set reasonable time limits on offers and reoffers.
(7) No sale may be made under the provisions of paragraph (2) or (3)-(A) which would result in a monopoly, or which would be in furtherance of any combination or conspiracy to
monopolize or to attempt to monopolize the business of banking in any part of the United States;
(B) whose effect in any section of the country may be substantially to lessen competition, or to tend to create a
monopoly, or which in any other manner would be in restraint of trade, unless the Corporation finds that the
anticompetitive effects of the proposed transactions are clearly outweighed in the public interest by the probable
effect of the transaction in meeting the convenience and needs of the community to be served; or
(C) if in the opinion of the Corporation the acquisition threatens the safety and soundness of the acquirer or does
not result in the future viability of the resulting depository institution.
(8) As used in this subsection-(A) the term in-State depository institution or in-State holding company means an existing insured depository
institution currently operating in the State in which the bank in default or the bank in danger of default is chartered
or a company that is operating an insured depository institution subsidiary in the State in which the bank in default
or the bank in danger of default is chartered;
(B) the term acquire means to acquire, directly or indirectly, ownership or control through-(i) an acquisition of shares;
(ii) an acquisition of assets or assumption of liabilities;
(iii) a merger or consolidation; or
(iv) any similar transaction;
(C) the term affiliated insured bank means-(i) when used in connection with a reference to a holding company, an insured bank which is a subsidiary of
such holding company; and
(ii) when used in connection with a reference to 2 or more insured banks, insured banks which are subsidiaries
of the same holding company; and
(D) the term subsidiary has the meaning given to such term in section 1841(d) of this title.
(9) No assistance authorized for certain subsidiaries of holding companies
(A) In general
The Corporation shall not provide any assistance to a subsidiary, other than a subsidiary that is an insured
depository institution, of a holding company in connection with any acquisition under this subsection.
(B) Intermediate holding company permitted
This paragraph does not prohibit an intermediate holding company or an affiliate of an insured depository
institution from being a conduit for assistance ultimately intended for an insured bank.
(10) Annual report
(A) Required
In its annual report to Congress the Corporation shall include a report on the acquisitions under this subsection
during the preceding year.
(B) Contents
The report required under subparagraph (A) shall contain the following information:
(i) The number of acquisitions under this subsection.
(ii) A brief description of each such acquisition and the circumstances under which such acquisition occurred.
(11) Determination of total assets
For purposes of this subsection, the total assets of any insured bank shall be determined on the basis of the most
recent report of condition of such bank which is available at the time of such determination.
(12) Acquisition of minority bank by minority bank holding company without regard to asset size
(A) In general
For the purpose of ensuring continued minority control of a minority-controlled bank, paragraphs (2) and (3) shall
apply with respect to the acquisition of a minority-controlled bank by an out-of-State minority-controlled
depository institution or depository institution holding company without regard to the fact that the total assets of
such minority-controlled bank are less than $500,000,000.
(B) Definitions
For purposes of this paragraph:
(i) Minority bank

The term minority bank means any depository institution described in clause (i), (ii), or (iii) of section 461(b)
(1)(A) of this title-(I) more than 50 percent of the ownership or control of which is held by one or more minority individuals;
and
(II) more than 50 percent of the net profit or loss of which accrues to minority individuals.
(ii) Minority
The term minority means any Black American, Native American, Hispanic American, or Asian American.
(g) Payment of interest on stock subscriptions
Prior to July 1, 1951, the Corporation shall pay out of its capital account to the Secretary of the Treasury an amount
equal to 2 per centum simple interest per annum on amounts advanced to the Corporation on stock subscriptions by
the Secretary of the Treasury and the Federal Reserve banks, from the time of such advances until the amounts
thereof were repaid. The amount payable hereunder shall be paid in two equal installments, the first installment to be
paid prior to December 31, 1950.
(h) Reopening or aversion of closing of insured branch of foreign bank
The powers conferred on the Board of Directors and the Corporation by this section to take action to reopen an
insured depository institution in default or to avert the default of an insured depository institution may be used with
respect to an insured branch of a foreign bank if, in the judgment of the Board of Directors, the public interest in
avoiding the default of such branch substantially outweighs any additional risk of loss to the Deposit Insurance Fund
which the exercise of such powers would entail.
(i) Repealed. Pub.L. 97-320, Title II, 206, Oct. 15, 1982, 96 Stat. 1496
(j) Loan loss amortization for certain banks
(1) Eligibility
The appropriate Federal banking agency shall permit an agricultural bank to take the actions referred to in
paragraph (2) if it finds that-(A) there is no evidence that fraud or criminal abuse on the part of the bank led to the losses referred to in
paragraph (2); and
(B) the agricultural bank has a plan to restore its capital, not later than the close of the amortization period
established under paragraph (2), to a level prescribed by the appropriate Federal banking agency.
(2) Seven-year loss amortization

(A) Any loss on any qualified agricultural loan that an agricultural bank would otherwise be required to show on
its annual financial statement for any year between December 31, 1983, and January 1, 1992, may be amortized
on its financial statements over a period of not to exceed 7 years, as provided in regulations issued by the
appropriate Federal banking agency.
(B) An agricultural bank may reappraise any real estate or other property, real or personal, that it acquired
coincident to the making of a qualified agricultural loan and that it owned on January 1, 1983, and any such
additional property that it acquires prior to January 1, 1992. Any loss that such bank would otherwise be required
to show on its annual financial statements as the result of any such reappraisal may be amortized on its financial
statements over a period of not to exceed 7 years, as provided in regulations issued by the appropriate Federal
banking agency.
(3) Regulations
Not later than 90 days after August 10, 1987, the appropriate Federal banking agency shall issue regulations
implementing this subsection with respect to banks that it supervises, including regulations implementing the
capital restoration requirement of paragraph (1)(B).
(4) Definitions
As used in this subsection-(A) the term agricultural bank means a bank-(i) the deposits of which are insured by the Federal Deposit Insurance Corporation;
(ii) which is located in an area the economy of which is dependent on agriculture;
(iii) which has assets of $100,000,000 or less; and
(iv) which has-(I) at least 25 percent of its total loans in qualified agricultural loans; or
(II) fewer than 25 percent of its total loans in qualified agricultural loans but which the appropriate Federal
banking agency or State bank commissioner recommends to the Corporation for eligibility under this
section, or which the Corporation, on its motion, deems eligible; and
(B) the term qualified agricultural loan means a loan made to finance the production of agricultural products
or livestock in the United States, a loan secured by farmland or farm machinery, or such other category of loans
as the appropriate Federal banking agency may deem eligible.
(5) Maintenance of portfolio

As a condition of eligibility under this subsection, the agricultural bank must agree to maintain in its loan portfolio
a percentage of agricultural loans which is not lower than the percentage of such loans in its loan portfolio on
January 1, 1986.
(k) Emergency acquisitions
(1) In general
(A) Acquisitions authorized
(i) Transactions described
Notwithstanding any provision of State law, upon determining that severe financial conditions threaten the
stability of a significant number of savings associations, or of savings associations possessing significant
financial resources, the Corporation, in its discretion and if it determines such authorization would lessen the
risk to the Corporation, may authorize-(I) a savings association that is eligible for assistance pursuant to subsection (c) of this section to merge or
consolidate with, or to transfer its assets and liabilities to, any other savings association or any insured
bank,
(II) any other savings association to acquire control of such savings association, or
(III) any company to acquire control of such savings association or to acquire the assets or assume the
liabilities thereof.
The Corporation may not authorize any transaction under this subsection unless the Corporation
determines that the authorization will not present a substantial risk to the safety or soundness of the
savings association to be acquired or any acquiring entity.
(ii) Terms of transactions
Mergers, consolidations, transfers, and acquisitions under this subsection shall be on such terms as the
Corporation shall provide.
(iii) Approval by appropriate agency
Where otherwise required by law, transactions under this subsection must be approved by the appropriate
Federal banking agency of every party thereto.
(iv) Acquisitions by savings associations

Any Federal savings association that acquires another savings association pursuant to clause (i) may, with the
concurrence of the Comptroller of the Currency, hold that savings association as a subsidiary notwithstanding
the percentage limitations of section 1464(c)(4)(B) of this title.
(v) Dual service
Dual service by a management official that would otherwise be prohibited under the Depository Institution
Management Interlocks Act [12 U.S.C.A. 3201 et seq.] may, with the approval of the Corporation, continue
for up to 10 years.
(vi) Continued applicability of certain State restrictions
Nothing in this subsection overrides or supersedes State laws restricting or limiting the activities of a savings
association on behalf of another entity.
(B) Consultation with State official
(i) Consultation required
Before making a determination to take any action under subparagraph (A), the Corporation shall consult the
State official having jurisdiction of the acquired institution.
(ii) Period for State response
The official shall be given a reasonable opportunity, and in no event less than 48 hours, to object to the use of
the provisions of this paragraph. Such notice may be provided by the Corporation prior to its appointment as
receiver, but in anticipation of an impending appointment.
(iii) Approval over objection of State official
If the official objects during such period, the Corporation may use the authority of this paragraph only by a
vote of 75 percent or more of the voting members of the Board of Directors. The Corporation shall provide to
the official, as soon as practicable, a written certification of its determination.
(2) Solicitation of offers
(A) In general
In considering authorizations under this subsection, the Corporation may solicit such offers or proposals as are
practicable from any prospective purchasers or merger partners it determines, in its sole discretion, are both
qualified and capable of acquiring the assets and liabilities of the savings association.
(B) Minority-controlled institutions

In the case of a minority-controlled depository institution, the Corporation shall seek an offer from other
minority-controlled depository institutions before seeking an offer from other persons or entities.
(3) Determination of costs
In determining the cost of offers under this subsection, the Corporation's calculations and estimations shall be
determinative. The Corporation may set reasonable time limits on offers.
(4) Branching provisions
(A) In general
If a merger, consolidation, transfer, or acquisition under this subsection involves a savings association eligible
for assistance and a bank or bank holding company, a savings association may retain and operate any existing
branch or branches or any other existing facilities. If the savings association continues to exist as a separate
entity, it may establish and operate new branches to the same extent as any savings association that is not
affiliated with a bank holding company and the home office of which is located in the same State.
(B) Restrictions
(i) In general
Notwithstanding subparagraph (A), if-(I) a savings association described in such subparagraph does not have its home office in the State of the
bank holding company bank subsidiary, and
(II) such association does not qualify as a domestic building and loan association under section 7701(a)(19)
of Title 26, or does not meet the asset composition test imposed by subparagraph (C) of that section on
institutions seeking so to qualify,
such savings association shall be subject to the conditions upon which a bank may retain, operate, and
establish branches in the State in which the savings association is located.
(ii) Transition period
The Corporation, for good cause shown, may allow a savings association up to 2 years to comply with the
requirements of clause (i).
(5) Assistance before appointment of conservator or receiver
(A) Assistance proposals

The Corporation shall consider proposals by savings associations for assistance pursuant to subsection (c) of
this section before grounds exist for appointment of a conservator or receiver for such member under the
following circumstances:
(i) Troubled condition criteria
The Corporation determines-(I) that grounds for appointment of a conservator or receiver exist or likely will exist in the future unless
the member's tangible capital is increased;
(II) that it is unlikely that the member can achieve positive tangible capital without assistance; and
(III) that providing assistance pursuant to the member's proposal would be likely to lessen the risk to the
Corporation.
(ii) Other criteria
The member meets the following criteria:
(I) Before August 9, 1989, the member was solvent under applicable regulatory accounting principles but
had negative tangible capital.
(II) The member's negative tangible capital position is substantially attributable to its participation in
acquisition and merger transactions that were instituted by the Federal Home Loan Bank Board or the
Federal Savings and Loan Insurance Corporation for supervisory reasons.
(III) The member is a qualified thrift lender (as defined in section 1467a(m) of this title) or would be a
qualified thrift lender if commercial real estate owned and nonperforming commercial loans acquired in
acquisition and merger transactions that were instituted by the Federal Home Loan Bank Board or the
Federal Savings and Loan Insurance Corporation for supervisory reasons were excluded from the member's
total assets.
(IV) The appropriate Federal banking agency has determined that the member's management is competent
and has complied with applicable laws, rules, and supervisory directives and orders.
(V) The member's management did not engage in insider dealing or speculative practices or other activities
that jeopardized the member's safety and soundness or contributed to its impaired capital position.
(VI) The member's offices are located in an economically depressed region.
(B) Corporation consideration of assistance proposal

If a member meets the requirements of clauses (i) and (ii) of subparagraph (A), the Corporation shall consider
providing direct financial assistance.
(C) Economically depressed region defined
For purposes of this paragraph, the term economically depressed region means any geographical region which
the Corporation determines by regulation to be a region within which real estate values have suffered serious
decline due to severe economic conditions, such as a decline in energy or agricultural values or prices.
**9. Sale of assets by corporation

Evidence supported conclusion that company which purchased insolvent bank's assets from Federal Deposit
Insurance Corporation (FDIC), was not entitled to enforcement of note inasmuch as company failed to prove that
note was included in assets company purchased from FDIC. Cadle Co. v. Friedman, Ala.1994, 631 So.2d 962. Bills
And Notes
505
Cadle Co. v. Friedman, 631 So.2d 962 (Ala., Jan 14, 1994)
Company which had purchased certain assets of insolvent bank from Federal Deposit Insurance Corporation
(FDIC) brought action to recover money due pursuant to note and lease. The Tuscaloosa Circuit Court, No. CV91
454,Steve Wilson, J., held that company was not entitled to enforcement of note inasmuch as it had failed to prove
that note was included in assets company had purchased from FDIC. Company appealed. The Supreme Court, Cook,
J., held that record supported finding that company failed to prove note was included in assets purchased.
Affirmed.
[2] Bills and Notes 56
505
56 Bills and Notes

56XI Actions
56k500 Admissibility of Evidence
56k505 k. Mistake, fraud, or duress. Most Cited Cases
Evidence supported conclusion that company which purchased insolvent bank's assets from Federal Deposit
Insurance Corporation (FDIC), was not entitled to enforcement of note inasmuch as company failed to prove that
note was included in assets company purchased from FDIC.
**First, it was disputed whether either financial institution ever received or accepted the Friedman note,
ownership of which was a prerequisite to the institution's right to assign it to Cadle. In this connection, Friedman
testified: To my knowledge, nothing ever happened with that note. It was like I submitted it and it vanished.
Indeed, there was evidence that Friedman had, on June 5, 1987, sent to FNB a check in the amount of $8,197.95
representing a three-month payment pursuant to the Friedman note and that on July 10, 1987, the FNB had returned
the check, stating that the Friedman note had been turned over to the FDIC. The FDIC, however, in a letter dated
June 5, 1989, addressed to Friedman's attorney, stated that the FDIC had researched its files and was unable to
locate any information on the [Friedman note]. FN1
FN1. Significantly, these communications preceded Cadle's December 1990 purchase of assets.
Also, the only original document Cadle presented at trial was the Swaland note.FN2 The trial court's judgment in
favor of Friedman on all issues was apparently based, in part, on a finding that evidence consisting of copies of the
Friedman note and of the Friedman assignment did not sufficiently establish ownership of the obligations.
FN2. That note, however, did not identify the crane. Instead, it referred only to a U.C.C. form securing
equipment. No attempt was made to place in evidence the U.C.C. form.
*965 In this connection, the majority of trial time was consumed by Cadle's proffer of, and Friedman's
objections to, the copies. Also significant were the factual disputations surrounding Cadle's attempts to account for
the absence of the original documents.
Moreover, the record does not clearly indicate whether the trial judge ultimately admitted all, or only some, of these
copies. In any case, each copy that was admitted was admitted with the express reservation that its character would
detract from its evidential value. We conclude that this evidence is not inconsistent with the trial court's ultimate
finding that a gap existed in Cadle's proof of ownership of the disputed obligations and, therefore, that the trial
court's findings were not plainly and palpably wrong. FN3
14. Purchase and assumption transactions--Generally
**Absent any claim that assignment to Corporation in its corporate capacity was without consideration or sham,
Corporation as receiver of closed bank could assign assets to Corporation as corporation as insurer of bank . Federal
Deposit Ins. Corp. v. Abraham, E.D.La.1977, 439 F.Supp. 1150. Banks And Banking
505
Federal Deposit Ins. Corp. v. Abraham, 439 F.Supp. 1150 (E.D.La. Oct 21, 1977)
The Federal Deposit Insurance Corporation brought suit against the former director of a state chartered bank on
a chose in action purchased by the FDIC in its corporate capacity from the FDIC in its receivership capacity. On
motions to dismiss, the District Court, Charles Schwartz, J., held that (1) the mere fact that activities of the FDIC as
a corporation might in some respects be similar to its activities as receiver did not serve as a ground to deny federal
jurisdiction of statutorily mandated actions involving the FDIC as a corporation, and the court had jurisdiction of the
suit for such reason; and **(2) the FDIC was an agency of the United States, and where FDIC as corporation was
not suing as receiver and was not limited by a statute denying to the federal district court original jurisdiction in suits
brought by the FDIC when the FDIC is a party in its capacity as receiver of a state bank or when the action involves
only rights or obligations of depositors, creditors or stockholders of state bank under state law, the court had
independent federal jurisdiction under the statute conferring jurisdiction of civil actions commenced by the United
States or an agency or officer thereof expressly authorized to sue by act of Congress.
Motions denied.
505

52k505 k. Powers, functions and dealings in general. Most Cited Cases
**As receiver of insolvent bank, Federal Deposit Insurance Corporation becomes representative of bank and is
required to marshal its assets for its shareholders and creditors, but in its corporate capacity the FDIC functions
separately as federal insurer of bank deposits. Federal Deposit Insurance Act, 2[9], 2[13](d), 12 U.S.C.A.
1819, 1823(d); 28 U.S.C.A. 1345.
**Federal Deposit Insurance Corporation, as receiver of failed bank, has discretionary authority, coextensive with
that permitted by federal law, to enter into a purchase and assumption agreement . Matter of Liquidation of United
American Bank in Knoxville, Tenn.1987, 743 S.W.2d 911. Banks And Banking
505
15. ---- Alternative to liquidation, purchase and assumption transactions
**This section authorizing Corporation to make loans or purchase assets whenever in judgment of board of directors
such action will reduce risk or avert threatened loss to Corporation and will facilitate merger or consolidation of one
insured bank with another or facilitate sale of assets of open or closed insured bank to and assumption of its
liabilities by another insured bank does not require that Corporation know its ultimate losses to last cent before
selecting purchase and assumption, but rather, requires reasoned judgment that risk of purchase and assumption is
not greater than liquidation, and such subsec. permits error. Gunter v. Hutcheson, C.A.11 (Ga.) 1982, 674 F.2d 862,
certiorari denied 103 S.Ct. 60, 459 U.S. 826, 74 L.Ed.2d 63, rehearing denied 103 S.Ct. 477, 459 U.S. 1059, 74
L.Ed.2d 624. Banks And Banking
505
**Federal Deposit Insurance Corporation may undertake purchase and assumption transaction in regard to failed
bank only if it determines that such action is reasonably necessary to save cost of liquidating, including paying
insured accounts, or that continuing bank's operation is necessary to provide community with adequate banking
services; moreover, FDIC must determine that such action will minimize its losses. Federal Deposit Ins. Corp. v.
National Union Fire Ins. Co. of Pittsburgh, Pa., W.D.La.1986, 630 F.Supp. 1149. Banks And Banking
505
16. ---- Terms and conditions, purchase and assumption transactions
**Corporation in its corporate capacity has statutory discretion to set terms and conditions of purchase of assets
from itself as a receiver but a receiver does not have unlimited discretion to fix terms and conditions of sale of
receivership assets, and, as to the receiver, fairness of terms to which it agrees are not beyond scope of traditional
judicial review. Corbin v. Federal Reserve Bank of New York, S.D.N.Y.1978, 458 F.Supp. 143. Banks And Banking
287(3)
19. ---- Transfer of unacceptable assets, purchase and assumption transactions
**Transfer of Federal Deposit Insurance Corporation/receiver's right, title, and interest in unacceptable assets of
insolvent bank to FDIC/Corporation for an amount that assuming bank accepts in lieu of unacceptable assets is a
bona fide transfer of assets, not a sham transaction. Federal Deposit Ins. Corp. v. Bank of Boulder, C.A.10 (Colo.)
1988, 865 F.2d 1134, on rehearing 911 F.2d 1466, certiorari denied 111 S.Ct. 1103, 499 U.S. 904, 113 L.Ed.2d 213.
Banks And Banking
505
**The FDIC does not act as receiver after assignment of unacceptable assets to itself in its corporate capacity, but,
rather, as a corporation, acquires assets as ordinary purchaser for value; as such, FDIC is merely assignee of claims
and assumes no liabilities of receivership. Batsakis v. Federal Deposit Ins. Corp., W.D.Mich.1987, 670 F.Supp. 749.
Banks And Banking
505
24. Persons entitled to maintain action
**Affidavit of custodian of records of Federal Deposit Insurance Corporation (FDIC) regarding transfer of assets of
insolvent bank, together with original note containing endorsements of financial entities between which note was
transferred, were sufficient to establish FDIC's present ownership of note in its possession for purposes of
establishing standing to recover on guaranty. NCNB Texas Nat. Bank v. Johnson, C.A.5 (Tex.) 1994, 11 F.3d 1260,
rehearing and suggestion for rehearing en banc denied 19 F.3d 17. Bills And Notes
523; Guaranty
82(1)
**Federal Deposit Insurance Corporation acting in its corporate capacity had standing to bring action seeking to
collect certain assets acquired from receiver of a closed bank absent any evidence or legal basis warranting
conclusion of lack of standing. Federal Deposit Ins. Corp. v. Martinetz Almodovar, D.Puerto Rico 1987, 671 F.Supp.
508
I request that you perform your public functions

What is the FDICs duty in a purchase and assumption agreement to the
People of the United States?
As stated in, Borrower Beware: Doench, Duhme And Section 1823 Overprotect
The Insurer When Banks Fail, Marsha Hymanson, 62 S. Cal. L. Rev. 253, 259
November, 1988,
An important function of the FDIC is its role with respect to failed
banks. When a bank has failed or, in the opinion of the FDIC, is about to
fail,15 the FDIC has three basic options: (1) it can become the receiver of
the bank and liquidate the bank; (2) it can arrange a purchase of the bank
by another financial institution, with the acquiring institution then
assuming the liabilities to the depositors of the failed bank (also
referred to as purchase and assumption); or (3) it can use a variety of
tools for bailing out the failing institution.16 If the FDIC chooses the
first option, it will bring suit to collect loans in its capacity as
receiver of the liquidating bank. If it chooses either the second or third
option, any uncollected loans are held in its corporate capacity as
insurer, and the *260 FDIC will bring suit in that capacity. Thus, whether
the FDIC is suing as receiver or in its corporate capacity is a result of

the manner in which it chooses to handle the failed bank.

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**FDIC's powers after a bank failure. Jeffrey L. Portis, 65 U.Det.L.Rev. 259 (1988).

12 u.s.c. 1811 FDIC westlaw

Federal Deposit Insurance Corporation is a governmental institution. U. S. v.

Deposit Insurance Corporation are

it effective, and to adopt such means as it deemed necessary for

12 U.S.C. 1820. Administration of Corporation

foreign bank requested by the Board under such section.

(4) 18-month rule for certain small institutions

examinations and joint participation in examinations.

(C) Troubled condition

In order to effectuate the goals of public policy

In order to insure the integrity of the national

****insure the integrity of the FDIC and maintain accountability to the

FDIC v. Glickman, 450 F.2d 416, 418 (9th Cir.1971).

citizen has been given an opportunity to withdraw his deposits....

Duties to the People Of The United States

52 Banks and Banking

52 Banks and Banking

10. Federal Deposit Ins. Corp. v. Blackburn

**11. F.D.I.C. v. McCaffree

12. F.D.I.C. v. Hurwitz

F.D.I.C. v. Hurwitz, 384 F.Supp.2d 1039 (S.D.Tex. Aug 23, 2005)

52 Banks and Banking

66 Building and Loan Associations

52 Banks and Banking

52k505 k. Powers, Functions and Dealings in General. Most Cited Cases

66 Building and Loan Associations

52 Banks and Banking

66 Building and Loan Associations

393 United States

[13] United States 393

393 United States

393 United States

393 United States

52 Banks and Banking

66 Building and Loan Associations

393 United States

**18. In re Selected Somersworth Bank Cases

12 U.S.C. 1823. Corporation monies

(a) Investment of Corporation's funds

had been liquidated.

under subsection (c) of this section.

(C) Request for assistance by corporate board of directors

(i) Minority bank

(2) Seven-year loss amortization

(5) Maintenance of portfolio

(iv) Acquisitions by savings associations

(B) Minority-controlled institutions

(A) Assistance proposals

(B) Corporation consideration of assistance proposal

**9. Sale of assets by corporation

56 Bills and Notes

52 Banks and Banking

I request that you perform your public functions

the FDIC is suing as receiver or in its corporate capacity is a result of

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