---
kind: "section"
citation: "12 C.F.R. § 1777.28"
title: "12"
number: "1777.28"
heading: "Appointment of conservator for a significantly undercapitalized or critically undercapitalized Enterprise."
url: "https://uscodex.org/cfr/12/1777.28"
---

# §1777.28. Appointment of conservator for a significantly undercapitalized or critically undercapitalized Enterprise.

- (a) **Significantly undercapitalized Enterprise.** At any time after an Enterprise is classified as significantly undercapitalized, OFHEO may issue an order appointing a conservator for the Enterprise upon determining that:
  - (1) The amount of core capital of the Enterprise is less than the minimum capital level; and
  - (2) **The alternative remedies available to OFHEO under the 1992 Act are not satisfactory.**
- (b) **Critically undercapitalized Enterprise—**
  - (1) **Appointment upon classification.** Not later than thirty days after issuing a final notice of capital classification pursuant to [§ 1777.21(a)(3)](/cfr/12/1777.21.md?p=a-3) classifying an Enterprise as significantly undercapitalized, OFHEO shall issue an order appointing a conservator for the Enterprise.
  - (2) **Exception.** Notwithstanding [paragraph (b)(1)](#b-1) of this section, OFHEO may determine not to appoint a conservator if OFHEO makes a written finding, with the written concurrence of the Secretary of the Treasury, that:
    - (i) The appointment of a conservator would have serious adverse effects on economic conditions of national financial markets or on the financial stability of the housing finance market; and
    - (ii) The public interest would be better served by taking some other enforcement action authorized under this title.
- (c) **Judicial review.** An Enterprise for which a conservator has been appointed pursuant to paragraph [(a)](#a) or [(b)](#b) of this section may seek judicial review of the appointment in accordance with [section 1369(b)](/cfr/12/1369.md?p=b) of the 1992 Act ([12 U.S.C. 4619(b)](/usc/12/4619.md?p=b)). Except as provided therein, no court may take any action regarding the removal of a conservator or otherwise restrain or affect the exercise of the powers or functions of a conservator.
- (d) **Termination—**
  - (1) **Upon reaching the minimum capital level.** OFHEO will issue an order terminating a conservatorship appointment under paragraph [(a)](#a) or [(b)](#b) of this section upon a determination that the Enterprise has maintained an amount of core capital that is equal to or exceeds the minimum capital level.
  - (2) **In OFHEO's discretion.** OFHEO may, in its discretion, issue an order terminating a conservatorship appointment under paragraph [(a)](#a) or [(b)](#b) of this section upon a determination that such termination order is in the public interest and may safely be accomplished.

## Notes

### Authority

Authority: 12 U.S.C. 1452(b)(2), 1456(c), 1718(c)(2), 1723a(k), 4513(a), 4513(b), 4514, 4517, 4611-4619, 4622, 4623, 4631, 4635.

### Source

Source: 67 FR 3598, Jan. 25, 2002, unless otherwise noted.