P.R. Laws tit. 7, § 204
(a) Whenever Puerto Rico is affected by earthquakes, hurricanes, plagues or other unpredictable phenomena causing a major breakdown in its economy with unfavorable effects on banking, or whenever there are periods of recession or depression which affect to a great extent the economic and monetary structure of the country with their concomitant ill effects on banking, the Governor may proclaim a state of emergency and adopt emergency measures with regard to the banks for the protection of the public and the best interests of Puerto Rico.
(b) If as a result of any of the conditions mentioned in subsection (a) of this section, the assets of one or more banks should be reduced in their temporary or permanent value, and it is concluded, from the periodic reports received by the Commissioner or from his/her examinations of the banking institutions, that their worth is insufficient to cover all of it depositors, and there is threat of loss of trust in the banking system of Puerto Rico by the public, the Commissioner shall so notify the Governor, who may then exercise the powers conferred upon him/her in this section.
(c) The Governor may adopt the following measures among others;
(1) Limit the withdrawal of deposits for as much and as long as he/she may see fit.
(2) Take over the administration of as many banks as he/she may deem necessary.
(3) Dispense with compliance, in whole or in part, of any requirement provided by §§ 1 et seq. of this title.
(d) The Governor, through a resolution issued to such effect, shall forthwith take whatever action he/she may deem most proper in the light of the situation at hand.
(e) The Governor may exercise these powers either directly or through a receiver designated by him/her for such cases, who may be the Commissioner. The Governor may delegate on the receiver such powers as he/she may deem necessary within the scope of the powers conferred upon him/her by this section.
(f) The Governor, or the receiver by him/her designated, in the exercise of his/her power to take over the banks in a manner compatible with the purpose of affording protection to the public and the interests of Puerto Rico, shall control the assets and liabilities of the banks, and their books (including the minute books), records, papers and files of every description, and shall continue the operations of the bank within the objectives of this section and until the termination of the emergency, as determined by the Governor.
(g) The Governor, or the receiver designated by him/her, in the event he/she decides to take over the management of one or more banks, shall exercise his/her powers through the bank’s own management, which shall obey the orders of the Governor or his/her receiver, under penalty of incurring a violation of the provisions of this section, which violation shall constitute a misdemeanor punishable by a fine of up to one thousand dollars ($1,000) for each specific violation.
(h) To achieve the purposes of this section, the receiver, in the exercise of the powers hereby conferred upon him/her, may administer oaths, issue subpoenas requiring the appearance of witnesses and the production of any evidence, documentary or otherwise, that the receiver may deem necessary.
(i) If in taking over one or more banks, the Governor, or the receiver by him/her designated, should determine that the liquidation of one or more banks would be for the public benefit, the procedure set forth in § 201 of this title shall be followed such effect.
(j) The expenses incurred by the receiver designated by the Governor, if any, and the officials selected to carry out the purposes of this section, including their compensation, shall be paid from the resources of the banks proper. The profits or losses of the banks during such period shall be assumed by the banks themselves and shall not constitute, obligations or debts of the Government of Puerto Rico, in the case of losses. In determining these profits or losses, the compensation of the receiver and other officials whose services may be required during the period of emergency, shall be included.
(k) When the Governor determines that the emergency is over and that the proper balance between the assets and liabilities of the banks and the public trust in these institutions have been restored, the Governor shall return these to their own management.
(l) The banks may obtain the annulment of any decision made by the Governor or his/her representative that will affect their best interests if they prove before the Court of First Instance, San Juan Superior Part, that the grounds for such a decision were malicious. The banks may also resort to said court to seek termination of the governmental intervention. The court shall return control to the management of the banks if they can prove that the emergency period is over. The banks may also resort to said part should they consider that the compensation charged to them for the receiver or other personnel appointed by the latter or by the Governor, is excessive.
(m) The Governor shall be empowered to draft, amend and repeal regulations as needed to enforce the provisions of this section. Said power shall not be delegated.
History —May 12, 1933, No. 55, p. 322, § 42; Sept. 7, 1961, No. 12, p. 353, § 1; renumbered as § 41 and amended on Aug. 28, 1997, No. 108, § 48.