## Facts

- Greater Delaware Valley Federal Savings and Loan Association was federally chartered in 1938 under the Home Owners’ Loan Act.
- In 1958, disputes arose between the Federal Home Loan Bank Board and the Association’s management regarding alleged mismanagement.
- The Board sought to assert direct managerial control through a supervisory representative; related litigation resulted in a ruling that the Board’s proposed intervention was not judicially enjoinable.
- The Board also initiated administrative proceedings aimed at appointing a conservator for the Association.
- While the federal dispute and administrative proceedings were ongoing, the Association pursued conversion to a Pennsylvania-chartered institution.
- The Association’s members approved a conversion plan at a special meeting; articles of conversion were filed; Pennsylvania issued a certificate of conversion.
- After receiving the state certificate, the Association operated as a state-chartered institution and refused to recognize the Board’s authority.
- The Board filed a federal action seeking a declaratory judgment that the conversion was legally ineffective.
- The district court ruled for the Association and the intervening Pennsylvania officials, holding the conversion lawful and effective.

## Issues

1. Whether a federally chartered savings and loan association may convert to a state-chartered institution under state law without Federal Home Loan Bank Board approval, thereby terminating federal supervisory authority, including during pending federal administrative conservatorship proceedings.

## Decision

- The Third Circuit affirmed the district court’s judgment.
- The court held the Association’s conversion under Pennsylvania law was legally effective.
- The court held neither the Home Owners’ Loan Act nor the federal charter required Board consent for conversion.
- The court held the conversion ended the Board’s supervisory authority because that authority depended on the Association’s continued status as a federal association.

## Legal Principles

- Agency supervisory authority over a federally chartered institution exists only while the institution remains within the federal chartering framework established by statute.
- Courts will not infer a federal restriction on a federal association’s ability to change chartering status absent clear statutory text or unmistakable congressional intent.
- Pending federal administrative enforcement or conservatorship proceedings do not, by themselves, create a federal veto over an otherwise lawful state-law conversion.

## Conclusion

The Third Circuit held that, because Congress had not conditioned federal-to-state conversion on Board approval, the Association could validly convert under Pennsylvania law and thereby terminate the Federal Home Loan Bank Board’s supervisory jurisdiction even while federal conservatorship proceedings were pending.


Fed. Home Loan Bank Bd. v. Greater Del. Valley Fed. Sav. & Loan Ass'n, 277 F.2d 437 (3d Cir. 1960)