§ 1709. Unsound condition of association or unauthorized conduct of business; receivership and other remedial proceedings.
331 words·~2 min read·
/de/title-5/chapter-17-regulation/subchapter-i-general-provisions/1709·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)Proceedings may be instituted against any building and loan association doing business within the boundaries of this State, whenever it appears to the State Bank Commissioner that the affairs of any building and loan association are in an unsound condition because of illegal or unsafe investments, or that its liabilities exceed its assets, or that it is transacting business without authority or in violation of law, or that it is unsafe or inexpedient for the association to continue business.
(b)The Attorney General, on notice by the State Bank Commissioner, shall institute such proceedings against the building and loan association as the nature of the case may require. For any of the reasons mentioned in this section the State Bank Commissioner may forthwith take possession of the building and loan association’s property and business and retain such possession until the termination of the action or proceeding instituted by the Attorney General, or until the appointment of a receiver by due process of law.
(c)The receiver to be appointed in a proceeding under this section shall be the State Bank Commissioner or, in his or her absence or disability, the Deputy Bank Commissioner. Neither of those officials shall receive any extra compensation for acting as receiver. The Court may vest the receiver with full power and authority to borrow such sum or sums of money as the Court determines in order the more readily or expeditiously to settle the affairs of the building and loan association and/or to make payments to its creditors, depositors or shareholders. Such borrowing may be from any public or governmental or quasi-public or quasi-governmental corporation, board, commission or other agency or from any source whatsoever, and the Court may authorize the receiver to secure any loan by the pledge of any of the property or assets of the building and loan association, and to give the lender a preference as to the pledged property and assets over the creditors of the building and loan association.