Legal Seminar, Denver, CO

CSBS Legal Conference  Panel on Legal Issues and De Novo Banks (Wednesday, July 18, 2:30 pm MDT)  Discussion Outline 

Legal Nuts and Bolts  I.

High Level Process Overview   Two key elements to forming a de novo bank  a. Obtain permission from chartering authority from the state   b. Obtain FDIC insurance from the FDIC  c. (If forming a holding company, must also get HoCo approval from the Fed) 

II.

Statutory Criteria  a. Overview   b. Potential Hurdles  

i. Convenience and needs  ii. Economic support and reasonable chance for success – Camp v. Pitts, 411 U.S.  138 (1973)  iii. ___ ‐ (Texas case – see if lower court provides factual context)  iv. Character and fitness  1. Breach of fiduciary duty  2. Other “hypothetical examples”  Legal Challenges to Chartering Decisions   a. Consider whether the legal avenue challenge is based on is appropriate.    i. Administrative Procedures Act  1. Have the exhausted their administrative remedies  ii. Tort claims act – maybe not the right vehicle  See Magellsen v. FDIC, 341 F. Supp.  1031 (D. Mont. 1972)  b. How your state’s administrative law applies to your agency’s decision – especially if the  decision is challenged  i. Applicant challenges denial  ii. Third party challenges the application (State Banking Bd. V. Allied Bank, 748  S.W.2d 447 (Texas 1988))  c. Administrative law standard of review  i. Iowa – 2 types of challenges to agency action  1. Contested case proceeding (evidentiary hearing)  2. Other agency action  ii. The applicable standard of review is different depending on what type of  challenge it is   1. Contested case proceeding (very deferential to the agency)  2. Other agency action (several different potential tests – boil down to  arbitrary and capricious)  iii. You need to figure out what kind of challenge it is

Additional Legal Considerations  III.