- OTS Disapproves By-Law Change Permanently Barring Bad Boy
The OTS has denied an application by a federal savings bank to amend its by-laws to permanently bar a person who has been subject to a cease and desist order based on certain types of wrongful conduct from serving as a director or nominating anyone to be a director, and to require directors to be residents of the state where the savings bank is located.
Nutter Notes: In the January 14 Director’s Order, the OTS concluded, among other things, that the proposed restriction on director nominations would diminish the property rights of stockholders and members of a federal savings bank. The OTS also noted that a permanent ban on service as a director was too harsh in that it would preclude the possibility of rehabilitation of a person who had been subject to a cease and desist order.
- OCC Approves First Use of a Shelf Charter to Acquire a Failed Bank
The OCC announced on January 22 that it approved the first use of a “shelf charter” for the acquisition of a failed bank by an investor group. The investor group was granted preliminary approval for a shelf charter on October 23, 2009. Final approval is subject to various conditions to ensure the safe and sound operation of the new bank.
Nutter Notes: A shelf charter remains inactive, or “on the shelf,” until such time as the investor group is in a position to acquire a troubled institution. The OCC said that by granting preliminary approvals of this kind, it expands the pool of potential buyers available to buy troubled institutions, and in particular the pool of new equity capital available to bid on troubled institutions through the FDIC’s bid process.