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Abstract

This project is divided into five parts. Part I examines the federal statutory scheme for the supervision of federally-chartered savings and loans. The provisions of 12 U.S.C. § 1464 are examined closely to determine the extent of the power of the Federal Home Loan Bank Board to appoint a receiver. The due process implications of this process are examined in light of the United States Supreme Court's opinion in Fahey v. Mallonee. Finally, the question of the scope of judicial review of the Board's decision is examined. Whether the association is entitled to a review de novo is a question which could play a significant role in litigation in this area in the future.

Part II compliments the discussion of Part I with an examination of the recent decision of Washington Federal Savings and Loan Association v. Federal Home Loan Bank Board. In this case, the officers of the association challenged the Board's decision to appoint a receiver and merge the association. The Federal District Court in Cleveland, Ohio, upheld the appointment. This case represents the first challenge to a receivership proceeding in many years.

Part III examines the issues in terms of the states' supervision of savings and loan associations. The same questions that arise in the federal area are addressed here. The statutory scheme in Ohio is used as a starting point for the analysis. As is the case in the federal area, the small amount of precedent indicates that associations have little or no recourse from the appointment of a receiver.

Part IV represents an exploration of a different area of the supervision of the savings and loan industry. Six states, including Ohio, have organized deposit guarantee funds to protect the depositors of savings and loan associations. These funds represent important alternatives to the Federal Savings and Loan Insurance Corporation. This part examines the statuory framework of these funds (in conjunction with Professor Ronald Alexander's article on the Ohio Deposit Guarantee Fund, found elsewhere in this issue) and discusses the question of whether such funds are agencies of the respective states for purpose of compliance the states' Administrative Procedure Act.

Part V concludes the project by analyzing whether a state might be liable to the shareholders or depositors for the negligent supervision of an insolvent savings and loan association. Two cases which have found such liability are examined in depth. Finally, the Ohio Court of Claims Act is analyzed to determine whether such action is possible in Ohio.

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