## Facts

- Great Life Savings Association, a Florida state-chartered thrift, sought federal deposit insurance from FSLIC.
- As a condition of insurance approval, FSLIC required Great Life’s principal owner, Robert D. Rapaport, to execute a personal Net Worth Maintenance Agreement tied to regulatory net worth minimums.
- Rapaport acquired 69.9% of Great Life’s stock and signed a five-year agreement promising to maintain the association’s net worth at required levels in exchange for FSLIC insurance of accounts.
- Great Life later developed capital deficiencies largely associated with nonperforming commercial real estate loans and ultimately failed.
- OTS, as FSLIC’s successor, brought an administrative enforcement action under 12 U.S.C. § 1818(b) seeking an order requiring Rapaport to pay about $1.5 million.
- The agency theory did not rely on Rapaport’s managerial misconduct; it rested on his shareholder status and a finding that he was “unjustly enriched” by retaining funds the agency characterized as a disputed capital contribution while Great Life benefited from federal deposit insurance.
- An ALJ found Rapaport liable; the OTS Acting Director adopted the decision and issued a final order requiring payment.
- Rapaport petitioned for judicial review, arguing that § 1818 did not authorize administrative enforcement of the agreement on the asserted “unjust enrichment” rationale.

## Issues

1. Whether OTS had authority under 12 U.S.C. § 1818(b) to order Rapaport to make a $1.5 million payment to enforce a net worth maintenance agreement based solely on a finding of “unjust enrichment.”
2. Whether OTS’s interpretation of § 1818(b) was entitled to Chevron deference where multiple federal banking agencies administer the statute.

## Decision

- The court granted the petition for review and set aside (vacated) the OTS order.
- The court held that OTS lacked § 1818(b) authority to impose the administrative payment remedy because the agency did not establish “unjust enrichment” (and did not proceed on a “reckless disregard” theory).
- The court declined to give Chevron deference to OTS’s interpretation of § 1818(b) because the statute is administered by multiple agencies.
- The court limited its ruling to administrative enforcement under § 1818, leaving open whether the agreement could be pursued, if at all, in a judicial contract action.
- A separate concurrence agreed with vacating the order but questioned any categorical rule against deference for jointly administered statutes.

## Legal Principles

- Under 12 U.S.C. § 1818(b), an agency may order affirmative monetary relief (including restitution-type payments) in an administrative cease-and-desist proceeding only upon a statutory predicate, including a finding that the respondent was “unjustly enriched” or acted with “reckless disregard for the law or any applicable regulations or prior order.”
- “Unjust enrichment” under § 1818(b) requires more than a shareholder’s retention of funds that could have been contributed to meet capital requirements; a payment order cannot rest solely on a capital shortfall and an attenuated benefit theory.
- When a statute is administered by multiple federal banking agencies, the D.C. Circuit does not automatically apply Chevron deference to a single agency’s interpretation of that statute.
- Failure to satisfy § 1818(b)’s prerequisites restricts administrative collection mechanisms and does not, by itself, resolve whether a separate judicial remedy exists under contract law.

## Conclusion

The D.C. Circuit vacated OTS’s administrative order compelling payment under a net worth maintenance agreement because the agency did not prove “unjust enrichment” within the meaning of § 1818(b), and thus could not use § 1818’s administrative remedies to collect the claimed contractual amount.


Rapaport v. U.S. Dep’t of the Treasury, Off. of Thrift Supervision, 59 F.3d 212 (D.C. Cir. 1995)