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A total of 114 OCC-supervised, nationally chartered commercial banks and OTS- or OCC-supervised savings associations have been shuttered by their regulators out of a total of 427 such closures since the start of 2008, but only in two recent instances have the principals of the failed institutions exercised their rights under federal law to challenge the fate to which they were assigned.
Denver-based United Western Bank filed suit over its January 2011 closure by the OTS, and Hoffman Estates, Ill.-based Charter National Bank & Trust recently initiated legal action regarding its February closure by the OCC. The task they face is daunting and the relief to which they are statutorily entitled may be unappealing, but litigation is the only available means to challenge what they both characterized as "arbitrary and capricious" closures.
Federal law gives nationally chartered commercial banks and federally chartered savings associations 30 days to initiate legal action either in federal district court in Washington, D.C., or in the district in which the institution is based, seeking an order for the sole remedy of the OCC's removal of its conservator or receiver. The FDIC serves as the receiver for United Western Bank and Charter National Bank & Trust.
Benjamin Shapiro, a partner at Belongia Shapiro & Franklin LLP, the firm representing Charter National Bank & Trust, said he...