Federal Home Loan Bank Board v. Greater Delaware Valley Federal Savings and Loan Association

In 1938, Greater Delaware Valley Federal Savings and Loan Association (the association) (defendant) received a federal charter from the Federal Home Loan Bank Board (the board) (plaintiff). In 1958, the relationship between the board and the directors of the association became contentious. The board proposed to take over management of the association through a board representative. The board commenced administrative proceedings regarding the mismanagement of the association and the potential appointment of a conservator for the association. While the dispute between the board and the association was ongoing, the association’s directors approved a plan for the conversion of the association to a state-chartered institution. The association called a special meeting and held a vote regarding conversion, which was approved. Subsequently, the association filed articles of conversion, and Pennsylvania issued a formal certificate of conversion to the association. The formal conversion was completed while the board’s proceedings were still pending. Accordingly, the association began operating as a state-chartered institution and refused to recognize the authority of the board. The board sued the association, seeking a declaration that the association’s conversion to a state-chartered institution was legally ineffective. The board argued that conversion of the association required board approval. Officers of Pennsylvania intervened in the litigation in opposition to the board. The district court entered judgment for the association. The board appealed.