Receivership: It is what it is.

There has been a lot of talk and confusion regarding the bank and receivership and conservatorship, etc.

Apparently some people think all that means is that the regulators would have another bank step in to replace Citizens to manage the bank, and it would be business as usual. That may be true in some instances, but there appear to be some other outcomes that could occur, depending on the circumstances. All of the possible scenarios do protect the insured accounts of the customers. The OCC policy and procedures manual, referenced below, lays it out pretty well, though there is a lot of room for interpretation. Read it for yourself and decide. Any banking experience here would be helpful.

Some of the contributors to this site have narrowed the scope on the concept under other posts. Click here for a fairly involved explanation from the PPM (policy and procedures manual) of the OCC. Towards the bottom of page 9 hits on the topic. This document also explains some of the enforcement actions to which Princeton National Bancorp, Inc. has subjected of late.

Read Section 38 h of the Federal Deposit Insurance Act . It is just over halfway down in section ” h 3″      “Conservatorship, receivership, or other actions required.”

Electronic books

I heard from a seemingly knowledgeable source that, at a certain point in the process of shutting down a bank, the bank’s financial information is made available electronically so other banks with an interest in it can easily access those records when deciding a course of action regarding said bank. It was explained that when that happened, it usually took 60 to 70 days before the bank was closed. Keep in mind that it could well open the next day with business as usual, just under a different name. I would be interested to know if anyone can verify or debunk that.