An appeals court has temporarily thrown out a lower court's decision blocking a Federal Deposit Insurance Corp. order against Advanta Bank.

The case stems from FDIC attempts to prevent the $10 million-asset bank from propping up its bankrupt parent, Advanta Corp.

After the bank challenged an initial cease-and-desist order in administrative court — that case is ongoing — the agency issued what it called a "temporary" order to last through the administrative proceeding, claiming authority to act despite legal challenges when unsafe practices cause a bank to lose significant assets.

Advanta then challenged the second order, this time in the U.S. district court. There, Judge John Facciola ruled Feb. 16 that the FDIC misused its authority, saying Advanta was losing assets under an FDIC-approved downsizing — not from safety and soundness.

The same day, the FDIC filed an appeal with the U.S. Court of Appeals for the D.C. Circuit.

Last week, the FDIC asked the court to stay Facciola's ruling pending the appeal. The appeals court said it was not ruling on the request, but simply wanted time to hear the case. The stay "should not be construed in any way as a ruling on the merits of that motion," the court said.

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