Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

ANONYMOOUS v. FDIC

October 10, 1985

ANONYMOUS, Plaintiff,
v.
FEDERAL DEPOSIT INSURANCE CORPORATION, Defendant



The opinion of the court was delivered by: GREENE

 This case involves the authority of the Federal Deposit Insurance Corporation (FDIC) (1) to prohibit a bank officer, who may have participated in the making of imprudent loans, from working for any federally insured bank in the United States without prior permission from the FDIC, and (2) to take such action at the initiation of administrative procedures designed to determine the bank officer's culpability rather than at their conclusion.

 I

 Plaintiff is a banker who holds positions in several small banks in the southeastern United States. He served as the President of Bank in from March 10, 1981 to November 9, 1982, and as a director of that bank from March 10, 1981 to January 24, 1984, and from July 10, 1984 to July 19, 1985. Until the actions taken by the FDIC which are the subject of this lawsuit, he also served as a director of the Bank of in the Bank in and Bank in .

 In March of 1985, the FDIC, which is responsible for monitoring federally insured banks, and empowered to detect, prevent, and remedy violations of federal banking laws and unsafe banking practices, *fn1" commenced an examination of the Bank. The examination revealed a number of loans of allegedly "inferior quality," and according to the FDIC examiners, a check of the bank records revealed that plaintiff was associated in various degrees with the major portion of these problem loans. *fn2"

 Following this examination of Bank, the FDIC served a notice on plaintiff on August 5, 1985, advising him that, pursuant to 12 U.S.C. § 1818(e)(1) and (2), it was initiating administrative procedures to remove him from office at and to prohibit him from any future participation in any other federally insured bank. Further, under 12 U.S.C. § 1818(e)(4), *fn3" the FDIC issued an interim suspension order removing plaintiff from office and prohibiting him from further banking participation forthwith pending resolution of the administrative removal proceedings. *fn4"

 Plaintiff thereupon brought this action, petitioning the Court to set aside or stay the FDIC's interim suspension order, in accordance with 12 U.S.C. § 1818(f) -- a specific provision granting authority to the courts to stay FDIC interim suspension orders. *fn5"

 The apparent lack of criteria to guide the agency's discretion in choosing between emergency suspension orders issued at the initiation of administrative proceedings, and ordinary orders issued following the administrative process, led the Court to suggest that the FDIC promulgate some standards to guide agency officials in that regard, and incidentally thereby also to provide the courts with an adequate basis for review. *fn7"

 Upon remand, the FDIC reconsidered and rescinded the August 5 order, replacing it on September 9, 1985 with an Amended Order of Suspension. *fn8" The Amended Order contains two basic provisions: (1) it prohibits plaintiff from further participation in the affairs of both the and the banks pending the outcome of the administrative proceedings; and (2) it requires plaintiff to secure prior written approval before serving or acting as a director, officer, or employee of any federally insured bank or voting for a director of any such bank.

 On September 16, 1985, plaintiff petitioned the Court for a stay of the Amended Order, challenging it on the same grounds as asserted against the original order, as failing to provide an adequate legal and factual rationale for the blanket prohibition and, more broadly, as exceeding the agency's statutory authority. *fn9"

 The FDIC opposed plaintiff's request for the stay, claiming that it had reconsidered plaintiff's suspension in accordance with the Court's Memorandum Order and had issued a narrower suspension order justified under the circumstances. The FDIC further claimed full authority under the statutory scheme to issue broad, industry-wide orders.

 II

 It is clear that the Amended Order, like the FDIC's original order, amounts to a blanket order barring plaintiff's participation in all federally insured banks pending the outcome of the administrative proceedings, *fn10" in that it suspends plaintiff from all banks unless and until he receives prior written permission. The issue whether this kind of blanket restriction is within the statutory authority of the FDIC requires an examination of the statutory scheme in 12 U.S.C. § ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.