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Financial Regulation News | Mortgage Regulations
Bank and mortgage regulators, regulations and regulatory actions. Coverage of regulatory legislation and testimony.

Sharp Rise in Bank Cease-and-Desist Orders

Recent regulatory actions against financial institutions

Jan. 9, 2011


photo of Paula Parisot
Paula Parisot
A jump in monthly cease-and-desist orders against banks could indicate a bump ahead for failed institutions. Overall regulatory actions were heavier.

The Federal Deposit Insurance Corp. processed 91 matters during November, a sharp increase from the
57 matters reported a month earlier. The increase was even more striking when compared with 51 matters previously reported for November 2009.

The Federal Reserve Board executed a formal agreement Dec. 7 with Charlotte, N.C.-based Bank of America, the same day the Securities and Exchange Commission filed a cease-and-Desist proceedings order against Banc of America Securities LLC, now known as Merrill Lynch, Pierce, Fenner & Smith Incorporated, successor by merger.

Bank of America entered into agreements with the SEC, the Internal Revenue Service, the Office of the Comptroller of the Currency and 20 state attorneys general. The financial institution has agreed to pay $137.3 million in restitution to federal and state agencies as a condition of the Justice Department's Antitrust Corporate Leniency Program, according to a government news release.

The FDIC last month modified a cease and desist order that was issued against Lenox, Ga.-based The Trust Bank, formerly known as, Bank of Lenox.

A decision and order to prohibit from further participation was handed down to Cheryl Ann High from the FDIC on Nov. 9. High was a former employee of Union City, N.J.-based Hudson United Bank, now known as TD Bank, National Association in Wilmington, Del.

The FDIC also gave a notice of assessment of civil money penalty, findings of fact and conclusions of law, order to pay, and notice of hearing against Salvatore Pane and Port Chester, N.Y.-based USA Bank (in receivership) on Nov. 4, 2010.

The FDIC issued 28 cease-and-desist orders and was joined by the OCC in issuing a total of 30 cease-and-desist orders or consent orders during November. Such orders numbered 21 in the last regulatory report.

Historically, banks that have failed often received cease-and-desist orders before their demise. The FDIC issues such orders pursuant to Section 8(b), 12 U.S.C. §1818(b).

Cease-and-Desist and "Consent" Orders
Company Location Regulator Order/Docket No. Date
Access 1st Capital Bank Denton, TX FDIC FDIC-10-697b Nov. 1
Banc of America Securities LLC, now known as Merrill Lynch, Pierce, Fenner & Smith Incorporated, successor by merger na Securities and Exchange Commission File No. 3-14153 Dec. 7
Bank of Wausau Wausau, WI FDIC FDIC-10-488b Nov. 17
Community Bank of Oak Park River Forest Oak Park, IL FDIC FDIC-10-500b Nov. 10
Community Central Bank Mount Clemens, MI FDIC FDIC-10-561b Nov. 1
Fairview State Banking Company Fairview, IL FDIC FDIC-10-536b Nov. 19
First Capital Bank Marianna, FL FDIC FDIC-10-537b Nov. 15
First Citizens Bank of Polson, National Association Polson, Montana OCC 2010-223 Nov. 9
First Home Bank Seminole, FL FDIC FDIC-10-673b Nov. 18
First Intercontinental Bank Doraville, GA FDIC FDIC-10-464b Nov. 23
Fox River State Bank Burlington, WI FDIC FDIC-10-658b Nov. 4
Grand Bank & Trust of Florida West Palm Beach, FL FDIC FDIC-10-692b Nov. 19
Integrity First Bank Wausau, WI FDIC FDIC-10-395b Nov. 3
Lake Region Bank New London, MN FDIC FDIC-10-532b Nov. 17
Metro Phoenix Bank Phoenix, AZ FDIC FDIC-10-759b Nov. 10
Mid-Wisconsin Bank Medford, WI FDIC FDIC-10-807b Nov. 9
New Market Bank Elko-New Market, MN FDIC FDIC-10-608b Nov. 23
New Millennium Bank New Brunswick, NJ FDIC FDIC-10-837b Nov. 16
NewDominion Bank Charlotte, NC FDIC FDIC-10-553b Nov. 9
One World Bank Dallas, TX FDIC FDIC-10-505b Nov. 1
Pan American Bank Los Angeles, CA FDIC FDIC-10-718b Nov. 5
Regent Bank Davie, FL FDIC FDIC-10-609b Nov. 24
Seattle Bank Seattle, WA FDIC FDIC-10-830b Nov. 30
Signature Bank of Arkansas Fayetteville, AR FDIC FDIC-10-602b Nov. 4
State Bank of Taunton Taunton, MN FDIC FDIC-10-776b Nov. 8
SunFirst Bank St. George, UT FDIC FDIC-10-845b Nov. 9
The Leaders Bank Oak Brook, IL FDIC FDIC-10-511b Nov. 3
The Tampa State Bank Tampa, KS FDIC FDIC-10-743b Nov. 23
United American Bank San Mateo, CA FDIC FDIC-10-424b Nov. 2
Westbound Bank Katy, TX FDIC FDIC-10-668b Nov. 12

Modification of an Order to Cease-and-Desist
Company Location Regulator Order/Docket No. Date
The Trust Bank, F/K/A Bank of Lenox Lenox, GA FDIC FDIC-10-538L Nov. 23

The FDIC terminated cease-and-desist orders against 13 institutions.

Orders Terminating Consent or Cease-and-Desist Orders
Company Location Regulator Order/Docket No. Date
Bank of Agriculture and Commerce Stockton, CA FDIC FDIC-08-408b Nov. 4
Butler Bank Lowell, MA FDIC FDIC-09-148b Nov. 22
First Asian Bank Las Vegas, NV FDIC FDIC-10-220b Nov. 30
First Bank of Jacksonville Jacksonville, FL FDIC FDIC-09-355b Nov. 19
First Resource Bank Savage, MN FDIC FDIC-09-269b Nov. 3
Fox River State Bank Burlington, WI FDIC FDIC-09-226b Nov. 4
Hillcrest Bank Overland Park, KS FDIC FDIC-09-390b Nov. 8
McClave State Bank McClave, CO FDIC FDIC-08-118b Nov. 16
Mountain Commerce Bank Erwin, TN FDIC FDIC-08-213b Nov. 29
Statewide Bank Covington, LA FDIC FDIC-08-369b Nov. 29
The Gordon Bank Gordon, GA FDIC FDIC-09-109b Nov. 24
West Suburban Bank Lombard, IL FDIC FDIC-08-183b Nov. 19
West Suburban Bank Lombard, IL FDIC FDIC-08-384b Nov. 22

The OCC, the Federal Reserve and several state banking regulators recently entered formal agreements with 28 institutions. Such agreements often require the conservation of capital, operational improvements and, occasionally, management changes.

Formal Agreements
Company Location Regulator Order/Docket No. Date
Bank of America Corporation Charlotte, North Carolina Federal Reserve Bank of Richmond 10-240-WA/RB-HC Dec. 6
Bank of America, National Association Charlotte, North Carolina OCC 2010-239 Dec. 7
Baylake Corp., Baylake Bank Sturgeon Bay, Wisconsin Federal Reserve Bank of Chicago, State of Wisconsin Department of Financial Institutions 10-149-WA/RB-HC, 10-149-WA/RB-SM Dec. 23
Capital Commerce Bancorp Inc. Milwaukee, Wis. FEDERAL RESERVE BANK OF CHICAGO 10-247-WA/RB-HC Dec. 31
City National Bancshares Corporation Newark, New Jersey Federal Reserve Bank of New York 10-229-WA/RB-HC Dec. 14
Community Shores Bank Corporation Muskegon, Michigan Federal Reserve Bank of Chicago 10-243-WA/RB-HC Dec. 16
Empire National Bank Islandia, New York OCC 2010-226 Oct. 21
FCB Financial Corp. Savannah, Georgia Federal Reserve Bank of Atlanta, Banking Commissioner of the State of Georgia 10-221-WA/RB-HC Nov. 12
FEB Bancshares, Inc. Louisville, Alabama Federal Reserve Bank of Atlanta 10-234-WA/RB-HC Dec. 21
First Community Bank Glasgow, Montana Federal Reserve Bank of Minneapolis, Montana Division of Banking and Financial Institutions 10-194-WA/RB-SM Nov. 29
First International Bancorp of Texas, Inc., First International Bancorp America Plano, Texas/Reno, Nevada Federal Reserve Bank of Dallas 10-239-WA/RB-HC Dec.15
The First National Bank of Fleming Fleming, Colorado OCC 2010-237 Nov. 19
The First National Bank of Mercersburg Mercersburg, Penn. OCC 2010-229 Oct. 27
First National Community Bancorp, Inc. Dunmore, Pennsylvania Federal Reserve Bank of Philadelphia 10-220-WA/RB-HC Nov. 24
First South Bancorp, Inc. Spartanburg, South Carolina Federal Reserve Bank of Richmond 10-225-WA/RB-HC Nov. 23
Foundation Bancorp Inc. Bellevue, Wash. FEDERAL RESERVE BANK OF SAN FRANCISCO 10-235-WA/RB-HC Dec. 23
HarVest Bancorp, Inc. Gaithersburg, Maryland Federal Reserve Bank of Richmond 10-215 -WA/RB-HC Nov. 22
The Headland National Bank Headland, Alabama OCC 2010-225 Nov. 9
Lino Lakes Banc Shares, Inc. Forest Lake, Minnesota Federal Reserve Bank of Minneapolis 10-226-WA/RB-HC Dec. 2
Metropolitan Bank Holding Corp. New York FEDERAL RESERVE BANK OF NEW YORKCISCO 10-237-WA/RB-HC Jan. 4
Norcal Community Bancorp Alameda, California Federal Reserve Bank of San Francisco 10-242-WA/RB-HC Dec. 20
Omnibank, National Association Houston, Texas OCC 2010-230 Nov. 18
Oxford Financial Corporation Oak Brook, Illinois Federal Reserve Bank of Chicago 10-224-WA/RB-HC Nov. 29
Prairie Star Bancshares Inc. Olathe, Kan. FEDERAL RESERVE BANK OF KANSAS CITY 10-246-WA/RB-HC Dec. 22
Ridgestone Financial Services, Inc. Brookfield, Wisconsin Federal Reserve Bank of Chicago 10-210-WA /RB-HC Nov. 29
Santa Lucia Bancorp, Santa Lucia Bank Atascadero, California Federal Reserve Bank of San Francisco 10-238-WA/RB-HC, 10-238-WA/RB-SM Dec. 23
Southport Financial Corporation Kenosha, Wisconsin Federal Reserve Bank of Chicago 10-196-WA/RB-HC Nov. 24
The Suffolk County National Bank of Riverhead Riverhead, New York OCC 2010-228 Oct. 25
TCSB Bancorp, Inc. Traverse City, Michigan Federal Reserve Bank of Chicago 10-214-WA/RB-HC Dec. 6
Village Bancshares, Inc. St. Francis, Minnesota Federal Reserve Bank of Minneapolis 10-218-WA/RB-HC Dec. 1
Weststar Financial Services Corporation Asheville, North Carolina Federal Reserve Bank of Richmond 10-232-WA/RB-HC Dec. 9
Wilber National Bank Oneonta, New York OCC 2010-227 Oct.13

The FDIC, OCC and National Credit Union Administration banned 18 individuals from financial institutions through removal-and-prohibition orders issued pursuant to Section 8(e), 12 U.S.C. § 1818(e).

Removal / Prohibition Orders
Employer Location Individual Regulator Amount Order # Date
Algonquin State Bank, National Association Algonquin, Illinois Elaine J. Hopkins OCC na 2010-232 Nov. 15
Bank of Crocker Waynesville, MO Troy W. Posten FDIC na FDIC-10-390e Nov. 10
Branch Banking and Trust Company Winston-Salem, NC Chester Williams FDIC na FDIC-09-488e Nov. 9
Citizens Union Bank of Shelbyville, Century Bank of Kentucky Shelbyville, KY, Lawrenceburg, KY Roy T. Edwards FDIC na FDIC-09-197e Nov. 17
D. Edward Wells Federal Credit Union Springfield, Mass. Carol Aranjo NCUA $1,400,000 10-0046-R1 Nov. 4
First National Bank of Platteville Platteville, WI James L. Klein OCC na 2010-224 Nov. 1
Hometown Bank of Villa Rica Villa Rica, GA S. Pope Cleghorn, Jr. FDIC na FDIC-10-155e Nov. 18
Hudson United Bank, n/k/a TD Bank, National Association Union City, New Jersey/Wilmington, DE Cheryl Ann High FDIC na FDIC-08-291e Nov. 9
New Frontier Bank Greeley, CO Greg Bell FDIC na FDIC-10-551e Nov. 4
New Frontier Bank Greeley, CO Jack P. Renfroe FDIC na FDIC-10-544e Nov. 4
New Frontier Bank Greeley, CO John O. Kammeier FDIC na FDIC-10-543e Nov. 4
New Frontier Bank Greeley, CO Larry G. Seastrom FDIC na FDIC-10-539e Nov. 4
New Frontier Bank Greeley, CO Robert J. Brunner FDIC na FDIC-10-540e Nov. 4
New Frontier Bank Greeley, CO Timothy W. Thissen FDIC na FDIC-10-541e Nov. 4
Omni Bank Metairie, LA Lynne Fruchtnicht FDIC na FDIC-09-602e Nov. 9
Riverland Bank Jordan, MN Ronald E. Shealer FDIC na FDIC-10-005e Nov. 9
Tinker Federal Credit Union Oklahoma City, Oklahoma Donna Kay Gainer NCUA $32,790 10-0047-R4 Nov. 3
United Bank Atmore, AL George L. Price, Jr. FDIC na FDIC-10-265e; FDIC-10-446k Nov. 10

Civil Money Penalties were issued against 30 companies by the OCC and the FDIC -- which noted that such orders are issued pursuant to Section 8(i), 12 U.S.C. § 1818(i).

Final Orders - Civil Money Penalties
Company Location Individual Regulator Amount Order/Docket No. Date
Alliance Bank Lake City, MN na FDIC $7,190 FDIC-10-583k Nov. 3
Blackhawk State Bank Beloit, WI na FDIC $4,500 FDIC-10-298k Nov. 12
California Pacific Bank San Francisco, CA na FDIC $1,925 FDIC-10-808k Nov. 8
Century Bank and Trust Milledgeville, GA na FDIC $2,250 FDIC-10-650k Nov. 9
Chester County Bank Henderson, TN na FDIC $4,000 FDIC-10-710k Nov. 30
Citizens State Bank Miles, TX na FDIC $10,500 FDIC-10-564K Nov. 22
Citizens Union Bank of Shelbyville, Century Bank of Kentucky Shelbyville, KY, Lawrenceburg, KY na FDIC $1,000 FDIC-10-479k Nov. 17
EvaBank Eva, AL na FDIC $10,000 FDIC-10-607k Nov. 23
Exchange Bank Milledgeville, GA na FDIC $5,250 FDIC-10-685k Nov. 18
Farmers & Merchants State Bank Waterloo, WI na FDIC $5,535 FDIC-10-408k Nov. 12
Farmers & Merchants State Bank Waterloo, WI na FDIC $3,000 FDIC-10-409k Nov. 12
First National Bank of Platteville Platteville, WI James L. Klein OCC na 2010-224 Nov. 1
First Security Trust and Savings Bank Elmwood Park, IL na FDIC $4,250 FDIC-10-458k Nov. 3
First State Bank New London, WI na FDIC $16,300 FDIC-10-623k Nov. 12
First State Bank of Forsyth Forsyth, MT na FDIC $2,640 FDIC-10-729k Nov. 16
FirstBank of Colorado Lakewood, CO na FDIC $50,000 FDIC-10-480k Nov. 10
Foundation Bank Bellevue, WA na FDIC $5,000 FDIC-10-734k Nov. 15
Lisle Savings Bank Lisle, IL na FDIC $5,500 FDIC-09-157k Nov. 3
Merrimac Savings Bank Merrimac, MA na FDIC $5,000 FDIC-10-810k Nov. 2
Metropolitan National Bank New York, NY na OCC na 2010-238 Nov. 5
Mid America Bank Linn, MO na FDIC $23,000 FDIC-10-717k Nov. 22
Northwest Georgia Bank Ringgold, GA na FDIC $23,485 FDIC-10-684k Nov. 18
Omni Bank Metairie, LA Lynne Fruchtnicht FDIC $5,000 FDIC-09-604k Nov. 9
Oostburg State Bank Oostburg, WI na FDIC $5,500 FDIC-10-412k Nov. 12
Peach State Bank & Trust Gainesville, GA na FDIC $4,000 FDIC-10-783k Nov. 18
Regional Missouri Bank Marceline, MO na FDIC $17,325 FDIC-10-732k Nov. 12
Riverland Bank Jordan, MN Ronald E. Shealer FDIC $6,500 FDIC-10-006k Nov. 9
The Peoples Bank IVA, SC na FDIC $5,500 FDIC-10-758k Nov. 18
United Bank Atmore, AL George L. Price, Jr. FDIC $5,000 FDIC-10-265e; FDIC-10-446k Nov. 10
USA Bank (In Receivership) Port Chester, NY Salvatore Pane FDIC na FDIC-08-076k (Notice of Assessment of Civil Money Penalty, Findings of Fact and Conclusions of Law, Order to Pay, and Notice of Hearing) Nov. 10
Waterstone Bank, SSB Wauwatosa, WI na FDIC $5,775 FDIC-10-485k Nov. 19

Four individuals faced FDIC Final Orders issued pursuant to Section 19, 12 U.S.C. § 1829.

Final Orders - Section 19
Individual Regulator Order/Docket No. Date
Ricardo Javier Crespin FDIC FDIC-10-655L Nov. 22
John Harvey Cross FDIC FDIC-10-736L Nov. 23
Kim David Gilmore FDIC FDIC-10-378L Nov. 5
William Lee Gray Jr. FDIC FDIC-10-538L Nov. 23

Prompt Corrective Actions were issued against five companies by the FDIC, Federal Reserve Board and OCC. FDIC prompt corrective actions are issued pursuant to Section 38, 12 U.S.C. § 1831o.

Final Orders - Prompt Corrective Actions
Company Location Regulator Order/Docket No. Date
Albina Community Bank Portland, OR FDIC FDIC-10-860PCAS Nov. 17
BankEast Knoxville, Tenn. Federal Reserve Board 10-245-PCA-SM Dec. 22
MBank Gresham, OR FDIC FDIC-10-829PCAS Nov. 2
The Park Avenue Bank Valdosta, Georgia Federal Reserve Board 10-231-PCA-SM Dec. 13
Western Springs National Bank and Trust Western Springs, Illinois OCC 2010-231 Nov. 18

Five actions were terminated by the OCC.

Terminations of Existing Enforcement Actions
Company Location Regulator Order/Docket No. Date
FA, Castle Bank, National Association Dekalb, Illinois OCC EA# 2009-107/2010-234 Nov. 1
FA, First Citizens Bank of Polson, National Association Polson, Montana OCC EA# 2008-117/2010-223 Nov. 9
FA, First National Bank Fort Collins, Colorado OCC EA# 2009-105/2010-233 Nov. 1
FA, First National Bank of Kansas Overland Park, KS OCC EA# 2009-108/2010-235 Nov. 1
FA, The Milford National Bank and Trust Company Milford, Massachusetts OCC EA# 2008-155/2010-236 Oct. 13

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Paula Parisot has been covering the mortgage industry as a reporter for since 2004.

e-mail Paula at: [email protected]

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