2007 California Financial Code Article 4. Conservatorship

CA Codes (fin:3180-3187)

3180.  Whenever the commissioner deems it necessary in order to
conserve the assets of any bank for the benefit of the depositors and
other creditors, he or she may appoint a conservator of such bank
and require of the conservator such bond as the commissioner deems
proper.  The conservator, under the direction of the commissioner,
shall take possession of the books, records, and assets of every
description of such bank and take such action as the conservator may
deem necessary to conserve the assets of such bank pending further
disposition of its business.



3181.  A conservator so appointed has all of the powers and rights
with relation to the business and the property of the bank for which
he or she is appointed conservator as are possessed by the
commissioner under Article 1 of this chapter with relation to a bank
of which he or she has taken possession and the conservator is
subject to the same obligations as are imposed upon the commissioner
under that article.  Upon the appointment of a conservator the bank
shall have the same rights as are granted by Sections 3101 and 3102
hereof to a bank whose business and assets have been taken possession
of by the commissioner.  During the time that the conservator
remains in possession of such bank the rights of the bank and of all
persons with respect thereto, subject to the other provisions of this
article, are the same as if the commissioner had taken possession of
the property and business of such bank for the purposes of
liquidation.  All expenses of any such conservatorship shall be paid
out of the assets of the bank and shall be a lien thereon which shall
be prior to any other lien.  The conservator shall receive a salary
in an amount no greater than that which would be paid by the
commissioner to a special deputy in charge of the liquidation of a
bank.


3182.  The commissioner shall cause to be made and completed at the
earliest possible date such an examination of the affairs of a bank
for which the commissioner has appointed a conservator as shall be
necessary to inform the commissioner as to its financial condition.



3183.  While any bank is in the hands of a conservator the
commissioner may require the conservator to set aside and make
available for withdrawal by depositors and for payment to other
creditors on a ratable basis such amounts as in the opinion of the
commissioner may safely be used for that purpose.



3184.  The commissioner in his or her discretion may permit the
conservator to receive deposits but any deposits received while the
bank is in the hands of a conservator shall be held as trust funds
and shall not be subject to any limitation as to payment or
withdrawal.  Such deposits shall be segregated and shall not be used
to liquidate any indebtedness of such bank existing at the time such
conservator was appointed or for the payment of any later
indebtedness incurred for the purpose of liquidating any indebtedness
of such bank existing at the time such conservator was appointed.
Such deposits shall be kept on hand in cash, invested in direct
obligations of the United States, or deposited with the Federal
Reserve Bank.



3185.  If the commissioner becomes satisfied that it may safely be
done and that it would be in the public interest he or she may
terminate the conservatorship and permit the bank for whom a
conservator was appointed to resume the transaction of its business
under the direction of its board, subject to such terms, conditions,
restrictions, and limitations as he or she may prescribe.



3186.  In any case in which a bank for which a conservator has been
appointed has been permitted to accept deposits since the appointment
of a conservator, the conservator, before the date upon which the
bank may be permitted to resume business under direction of its
board, shall cause to be published in a newspaper selected by him or
her as most likely to give proper notice, a notice giving the date on
which the affairs of the bank will be returned to its board and
stating that the provisions of Section 3184 will not be effective
after 30 days from such date.  The form of such notice and the
newspaper in which the same is to be published shall be first
approved by the commissioner.  On the date of the publication of such
notice the conservator shall mail to every person who made any
deposit in such bank after the date of the appointment of the
conservator a copy of such notice addressed to such person at the
address appearing upon the books of the bank and shall mail a similar
notice to every person making a deposit in the bank after the date
of the publication of such notice and prior to the time when the
affairs of the bank are returned to its board.



3187.  The commissioner is authorized to assess and collect from all
banks as may become subject to the provisions of this article their
ratable share of the costs incurred in the administration thereof.