PART 309-PAYMENT OF INSURED
DEPOSITS

§ 309.1 Payment of insured deposits in closed banks. When an insured bank closes under circumstances requiring the Corporation to make payment of the insured deposits therein, as prescribed by law,' the board of directors appoints one or more Claim Agents with power and authority as provided by law 2 who maintain a temporary office at the site of the closed bank for the purpose of receiving claims for insured deposits and making payment thereof as soon as possible in accordance with applicable law. Claimants for insured deposits are required to submit to such Claim Agents appropriate proofs of claim, in form and manner prescribed by law or by the board of directors, to deliver up any pass book or other record issued by the bank evidencing the insured deposit, to assign their claims for insured deposits to the Corporation to the extent required by law, and to furnish proper identification. The claimant is required to make proof thereof to the satisfaction of the Claim Agent. Disputed claims which cannot be adjusted in the field are referred to the Chief of the Division of Liquidation for determination and when satisfactory disposition cannot be so made, may be referred to the board of directors for appropriate action. In cases where the Corporation is not satisfied as to the validity of a claim for an insured deposit, it may require the final determination of a court of competent jurisdiction before paying such claim. The Corporation is authorized to make payment of the insured deposits by making available to each depositor a transferred deposit in a new bank in the community or in another insured bank in an amount equal to the insured deposit of such depositor and subject to withdrawal on demand, which is the equivalent of cash, or in such other manner as the board of directors may prescribe. The Corporation's more recent practice has been to make such

same

1 See subsection (1) of section 12B of the Federal Reserve Act, as amended (12 U.S.C. 264 (1)), particularly paragraphs (2), (6), and (7); for definition of the term "insured deposit" see subsection (c) (13) thereof.

* See subsectior (k) (2) of section 12B of the Federal Reserve Act, as amended (12 U.S.C. 264 (k) (2)).

payment by issuing its check for the amount of the insured deposit. In making such payments, the Corporation exercises its statutory authority to withhold payment of such portion of the insured deposit of any depositor as may be required to provide for the payment of any liability of such depositor as a stockholder of the bank, or of any liability of such depositor to the closed bank or its receiver, which is not offset against a claim due from the bank, pending the determination and payment of such liability by the depositor or any other person liable therefor. (48 Stat. 168, as amended; 12 U.S.C. and Sup., 264) [Res., Aug. 30, 1946, effective Sept. 11, 1946, 11 F.R. 177A-439]

PART 310-RECEIVERSHIPS AND LIQUIDATIONS

Sec. 310.1

310.2

Liquidation of assets acquired through loans and purchases.

National bank receiverships. 310.3 State bank receiverships.

AUTHORITY: §§ 310.1 to 310.3, inclusive, issued under 48 Stat. 168, as amended; 12 U.S.C. and Sup., 264.

SOURCE: §§ 310.1 to 310.3, inclusive, contained in Resolution, Federal Deposit Insurance Corporation, Aug. 30, 1946, effective Sept. 11, 1946, 11 F.R. 177A-439.

§ 310.1 Liquidation of assets acquired through loans and purchases. Assets acquired by the Corporation pursuant to contracts of loan or purchase from insured banks or receivers of closed insured banks, in accordance with the provisions of section 12B (n) (3) and (n) (4) of the Federal Reserve Act, as amended (sec. 12B (n) (3), (4), 48 Stat. 176, as amended; 12 U.S.C. 264 (n) (3), (4), are liquidated by the Corporation

The

Liquidation and are in turn submitted to the Committee on Liquidations, Loans, and Purchase of Assets and to the board of directors of the Corporation for approval. Expenses of administration, attorneys' fees, proposals for leasing, engaging brokers or others, independent contractors, and advances to protect assets are likewise submitted by the liquidator for transmission with the recommendation of the Division of Liquidation to the Committee on Liquidations, Loans, and Purchase of Assets and to the board of directors of the Corporation for approval. In general, the liquidator is the local representative of the Corporation and proceeds in compliance with the manual of instructions of the Division of Liquidation to liquidate the assets so acquired.

§ 310.2 National bank receiverships. Whenever any insured national bank or insured District bank shall have been closed by action of its board of directors, or of the Comptroller of the Currency, on account of inability to meet the demands of its depositors,' or whenever the insured status of a national member bank is terminated by action of the board of directors of the Corporation, or it ceases to be a member of the Federal Reserve System,' and is unable to meet the demands of its depositors, the Comptroller of the Currency appoints the Corporation as receiver for such bank. Immediately upon appointment the Corporation takes possession of the records, assets, and affairs of the bank through one of its agents, usually a liquidator, appointed to represent the Corporation in that receivership. If possession is taken by an agent other than a liquidator, the liquidator, when appointed, is substituted for the agent. The board of directors of the Corporation appoints the agent to take possession, the liquidator, such assistant liquidators, and personnel, as may be necessary, as well as an attorney to furnish the Corporation as receiver with such legal assistance as may be required in the administration of the receivership. The liquidator as local representative of the Corporation proceeds, in compliance with the manual of instructions of the Division of Liquidation, and in conformity with the appli

*Sec. 12B (1) (3) of the Federal Reserve Act, as amended (12 U.S.C. 264 (l) (3)).

* Section 12B (1) (2) of the Federal Reserve Act, as amended (12 U.S.C. 264 (1) (2)).

cable provisions of the National Bank Act and section 12B of the Federal Reserve Act, as amended, to liquidate the assets, receive claims of depositors (claiming in excess of $5,000 per depositor) and other creditors, pay the expenses of administration, distribute the proceeds of such liquidation, and otherwise wind up the affairs of the bank subject to the control of the board of directors of the Corporation and under the supervision of the Chief of the Division of Liquidation. After notice by advertisement pursuant to law, depositors having claims in excess of $5,000 per depositor, and other creditors, are permitted to file claims with the liquidator, who transmits such claims to the Division of Liquidation for allowance, classification, and deductions by way of setoffs or counterclaims. Such claims are filed on blanks prescribed from time to time by the Corporation and when allowed are evidenced by receiver's certificates issued by the Division of Liquidation on such forms as are from time to time prescribed by the Corporation. The liquidator receives collections of debts and claims due to the receivership, effects sales of assets, compositions and compromises of debts, and otherwise enforces claims and obligations, owing to the receivership. All proceeds of the liquidation are segregated and are kept separate and apart from the general and other funds of the Corporation. Proposals for the sale of assets, compositions, and compromises are transmitted by the liquidator to the Division of Liquidation, which in turn submits them to the Committee on Liquidations, Loans, and Purchase of Assets and to the board of directors of the Corporation as well as to the Comptroller of the Currency for approval; and upon such approval the liquidator, through local counsel, presents the proposals to a court of competent jurisdiction for authorization as provided by 12 U. S. C. 192. Expenses of administration are similarly submitted by the Division of Liquidation for approval by the board of directors and the Comptroller of the Currency. Attorney fees are submitted by the Legal Division

Claims for insured deposits up to $5,000 for each depositor are filed with a Claim Agent appointed by the board of directors of the Corporation who represents the Corporation in its capacity as insurer of deposits. (See sec. 302.2 (d) and Part 309 of this chapter.)

to the Special Committee for determination by the board of directors and the Comptroller of the Currency. Proposals for leasing, engaging brokers or others, independent contractors, extensions or renewals of debts due the receivership, or other contracts, and advances to protect assets, are submitted by the liquidator for transmission and recommendation by the Division of Liquidation to the Committee on Liquidations, Loans, and Purchase of Assets and to the board of directors for authorization. When sufficient funds have been realized from the liquidation to justify payment of a dividend to creditors, the Division of Liquidation submits a recommendation to the Comptroller of the Currency, who orders a ratable dividend to be paid. Dividend checks are drawn by the Division of Liquidation on receivership funds and transmitted to the liquidator for delivery to the claimants who are required to present their receiver's certificates for endorsement thereon and to execute receipts for such dividends. If such claims are paid in full with interest, receivership certificates must be surrendered. If surplus assets remain after payment of dividends to creditors equal to the principal of their respective claims plus interest thereon a meeting of the shareholders is called pursuant to the provisions of 12 U. S. C. 196, for the purpose of determining whether a shareholders' agent shall be elected or the receivership continued. If the shareholders elect to have a shareholders' agent appointed then the assets are assigned and delivered to the shareholders' agent upon compliance with the requirements of 12 U. S. C. 196.

§ 310.3 State bank receiverships. When the Corporation accepts appointment as receiver of an insured State bank' the board of directors appoints an agent or liquidator to take possession, on behalf of the Corporation, of the assets, books, and records, and to administer the affairs, of the closed bank. The liquidator as the local representative of the Corporation proceeds, in accordance with the provisions of the applicable law of the state in which the bank is located, and in conformity with the manual of instructions of the Division of Liquidation, to administer the receiver

1 Pursuant to the provisions of section 12B (1) (5) of the Federal Reserve Act, as amended (12 U.S.C. 264 (l) (5)).

ship, subject to the control of the board of directors and under the supervision of the Division of Liquidation.

PART 311-VOLUNTARY TERMINATION OF INSURED STATUS

Sec. 311.1

Steps to be taken and records to be furnished the Corporation by an insured nonmember bank in liquidation.

311.2 Steps to be taken and records to be furnished the Corporation by a member bank in liquidation (both State and national).

311.3 Steps to be taken and records to be furnished the Corporation where deposits are assumed by another insured bank.

AUTHORITY: §§ 311.1 to 311.3, inclusive, issued under 48 Stat. 168, as amended; 12 U.S.C. and Sup., 264.

SOURCE: §§ 311.1 to 311.3, inclusive, contained in Resolution, Federal Deposit Insurance Corporation, Aug. 30, 1946, effective Sept. 11, 1946, 11 F.R. 177A-440.

§ 311.1 Steps to be taken and records to be furnished the Corporation by an insured nonmember bank in liquidation. (a) Whenever a nonmember bank goes into liquidation and its insured status has not been terminated by the board 2 and its deposit liabilities are not assumed by another insured bank, it shall terminate its status as an insured bank in accordance with the provisions of paragraph (1) of subsection (i) of section 12B of the Federal Reserve Act, as amended (48 Stat. 171, as amended; 12 U.S.C. 264 (i) (1)).3 To effect such ter

"Board means board of directors of the Federal Deposit Insurance Corporation.

$ Section 12B (1) (1) of the Federal Reserve Act, as amended (12 U.S.C. 264 (1) (1)). provides, in part, as follows: "Any insured bank (except a national member bank or State member bank) may, upon not less than ninety days' written notice to the Corporation, and to the Reconstruction Finance Corporation if it owns or holds as pledgee any preferred stock, capital notes, or debentures of such bank, terminate its status as an insured bank. After the termination of the insured status of any bank the insured deposits of each depositor in the bank on the date of such termination, less all subsequent withdrawals from any deposits of such depositor, shall continue for a period of two years to be insured, and the bank shall continue to pay to the Corporation assessments as in the case of an insured bank during such period. [Italics supplied.]

"

hereby directed to immediately forward a certified copy of this resolution to the Federal Deposit Insurance Corporation, Washington, D. C., which shall constitute the notice of termination prescribed in paragraph (1) of subsection (1) of said section 12B.

Upon receipt of a certified copy of the aforesaid resolution the Corporation will promptly advise the bank of the date of the receipt thereof, and confirm the date of the termination of its insured status.

Thereupon, and prior to the termination date, the bank shall give notice to its depositors of the termination of its insured status. Such notice shall be (1) mailed to each depositor at his last address of record as shown upon the books of the bank, (2) published in not less than two issues of a local newspaper of general circulation, and (3) in form substantially as follows:

(Name of

(City or town) (State) upon your direction to this bank and your acknowledgment in writing of the payment of your deposits in full by such transfer.

(Name of noninsured bank)、

is not a member of the Federal Deposit Insurance Corporation and deposits made in it, or transferred to it, will not be insured.

(b) The bank shall furnish to the Corporation the following records and information:

(1) An affidavit of the mailing and an affidavit of the publication of the notice to depositors. The affidavit of mailing should be executed by the person mailing the notice and should state (i) the date of mailing, (ii) that it was mailed to each depositor at his last address of record as shown on the books of the bank, and (iii) that a copy of the notice as mailed is attached.

(2) A certified copy of the resolutions pursuant to which the bank was placed in liquidation and/or any other document or instrument required by law to place the bank in liquidation.

(3) The bank shall continue to file certified statements and pay assessments thereon for the period its deposits are insured, as provided by the Federal Reserve Act, as amended: 5 Provided, That after the bank shall have paid in full its deposit liabilities and the assessment to the Corporation required to be paid for the semiannual period in which its deposit liabilities are paid in full, and after it shall, under applicable law, have ceased to have authority to transact a banking business and to have existence, except for the purpose of, and to the extent permitted by law for, winding up its affairs, it shall not be required to file further certified statements nor to pay further assessments.

(4) When the deposit liabilities of the bank shall have been paid in full, the bank shall furnish to the Corporation an

See footnote 3 to § 311.1 (a).

affidavit executed by two of its officers, which affidavit shall state the fact that the deposit liabilities have been paid in full and give the date of the final payment thereof.6

(5) Where the bank has unclaimed deposits the affidavit to be furnished pursuant to subparagraph (4) of this paragraph, shall further state the amount of such unclaimed deposits and the disposition made of the funds to be held to meet such claims. For assessment purposes, the following will be considered as payment of such unclaimed deposits, viz:

(i) The transfer of cash funds in an amount sufficient to pay such unclaimed and unpaid deposits to the public official authorized under the law to receive the same; or

(ii) If no provision is made by law for the transfer of funds to a public official, the transfer of cash funds or compensatory assets to an insured bank in an amount sufficient to pay the unclaimed and unpaid deposits in consideration of such insured bank assuming the payment thereof: Provided, That, prior to such transfer, the liquidating bank shall have given notice, as hereinafter provided, to the owners of the unclaimed deposits of the intended transfer and a reasonable time shall have elapsed after the giving of such notice to enable the depositors to obtain their deposits. Such notice shall be mailed to each depositor and shall be published in a local newspaper of general circulation. The notice shall advise such depositors of the liquidation of the bank, shall request them to call for and accept payment of their deposits, and shall state the disposition to be made of their deposits upon their failure to promptly claim the same.

If such unclaimed and unpaid deposits are disposed of as provided in subdivision (i) of this subparagraph, a certified copy of the public official's receipt issued for such funds shall be furnished to the Corporation. If such unclaimed and unpaid deposits are disposed of as provided in subdivision (ii) of this subparagraph, an affidavit of the publication and of the mailing of the notice to depositors, to

The issuance of a draft or officer's check does not constitute the discharge of a deposit liability nor relieve the bank of assessment until such draft or other evidence of payment has been duly presented for payment and has been paid.

gether with a copy of such notice, and a certified copy of the contract of assumption shall be furnished to the Corporation.

(6) The liquidating bank shall advise the Corporation of the date on which the authority or right of the bank to do a banking business shall have terminated and the method or means whereby such termination shall have been effected, that is, whether such termination has been effected by the surrender of its charter, by the cancellation of its authority or license to do a banking business by the supervisory authority, or otherwise."

§ 311.2 Steps to be taken and records to be furnished the Corporation by a member bank in liquidation (both State and national). (a) Whenever a bank which is a member of the Federal Reserve System goes into liquidation and its insured status has not been terminated by the board and its deposit liabilities are not assumed by another insured bank, it shall notify its depositors of the date of the termination of its insured status.9 Such notice shall be in the form prescribed in § 311.1 and shall be given at the time and in the manner therein provided.

(b) The bank shall furnish to the Corporation the records and informa

As the governing law of the various jurisdictions is not uniform in this respect, it is suggested that the applicable statute be consulted and that this Corporation be advised of the manner in which the termination or cancellation of such authority has been effected.

8 See footnote 2 to § 311.1 (a).

• Section 12B (i) (2) of the Federal Reserve Act, as amended, provides, in part, as follows: "Whenever a member bank shall cease to be a member of the Federal Reserve System, its status as an insured bank shall, without notice or other action by the board of directors, terminate on the date the bank shall cease to be a member of the Federal Reserve System, with like effect as if its insured status had been terminated on said date by the board of directors after proceedings under paragraph (1) of this subsection." Section 10, subsection (c) of regulation H of the Board of Governors of the Federal Reserve System provides, in part, as follows (see 12 CFR, Cum. Supp., 208.10, footnote 18): "A bank's withdrawal from membership in the Federal Reserve System is effective on the date on which the Federal Reserve bank stock held by it is duly canceled."