FDIC v. Mallen

486 U. S. 230

May 31, 1988

The FDIC has the power to suspend bank officials if good evidence shows that the official committed a crime involving dishonesty. There is no pre-suspension hearing, but a post-suspension hearing must be held within 30 days. At the post suspension hearing, there is no unqualified right to oral testimony, though the suspended official may request to proffer it. Mallen, a bank official suspended under these workings, charged that the procedures failed to protect his rights under the Due Process clause.

The Court ruled unanimously that the FDIC procedures were just fine. Justice Stevens said that the need for banks to have trustworthy leadership was compelling enough to allow for a suspension prior to a hearing. The 30 day period afterward to have a hearing, and the 90 day period to reach a final solution were reasonably prompt. Indeed, to shorten these periods would probably work to the bank official’s detriment, argued Stevens, because it would encourage hasty rather than deliberate consideration of the facts. Finally, because oral testimony would often be irrelevant or duplicative, there was no need for an unqualified right to offer it. A legal challenge would still be available, Stevens reminded, in a case where truly relevant oral testimony had been irrationally excluded from consideration.

Another case that’s perfectly reasonable, provided you accept as a premise the Constitutional validity of the expansive administrative state. Maybe it’s a good idea for the government to have the power to suspend rogue bank presidents, but a century ago I doubt the Supreme Court would have found that power consistent with the Constitution.

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