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Mortgage industry lawsuit news and mortgage litigation coverage. Stories about legal settlements, judgments and mortgage class actions.

Troubled U.S. Banks

Recent regulatory actions and activity

April 13, 2009


More than 50 recent regulatory actions against U.S. financial institutions provide some insight into which banks are struggling.

A bank failure is often preceded by a cease-and-desist order. The Federal Deposit Insurance Corporation issued the following cease-and-desist orders.

Institution Location Date of Order Order No.
Bank of Agriculture and Commerce Stockton, Calif. Feb. 19 FDIC-08-408b
Bank of Leeton Leeton, Mo. Feb. 27 FDIC-09-036b
Bank of Westminster Westminster, S.C. Feb. 24 FDIC-08-309b
Cape Fear Bank (failed 4/10) Wilmington, N.C. Feb. 24 FDIC-09-005b
Columbia River Bank The Dalles, Ore. Feb. 9 FDIC-08-360b
Community Bank of Lemont Lemont, Ill. Feb. 5 FDIC-08-372b
Concord Bank St. Louis Feb. 13 FDIC-08-368b
Desert Commercial Bank Palm Desert, Calif. Feb. 17 FDIC-08-397b
First Bank of Beverly Hills Calabasas, Calif. Feb. 19 FDIC-09-051b
First Regional Bank Los Angeles Feb. 23 FDIC-08-353b
Imperial Capital Bank La Jolla, Calif. Feb. 17 FDIC-08-392b
Midwest Community Bank Plainville, Kan. Feb. 25 FDIC-08-373b
The Park Avenue Bank New York Feb. 11 FDIC-08-401b
Republic Bank & Trust Co. Louisville, Ky. Feb. 27 FDIC-08-308b
Security Savings Bank (failed 2/27) Henderson, Nev. Feb. 3 FDIC-09-004b
Sherman County Bank (failed 2/13) Loup City, Neb. Feb. 9 FDIC-09-046b
Temecula Valley Bank Temecula, Calif. Feb. 12 FDIC-09-057b
University Bank Ann Arbor, Mich. Feb. 12 FDIC-08-194b
Waterford Village Bank Williamsville, N.Y. Feb. 12 FDIC-08-402b
West Michigan Community Bank Hudsonville, Mich. Feb. 19 FDIC-08-238b
Woodlands Commercial Bank Salt Lake City Feb. 4 FDIC-09-041b

Removal-and-prohibition orders were issued against the following institutions by the FDIC.

Institution Location Individual Date of Order Order No.
Alpine Bank Glenwood Springs, Colo. Terri Fatka Feb. 27 FDIC-08-08-091e
The Citizens Bank of Weir, Kansas Weir, Kan. Martha E. Thompson Feb. 11 FDIC-08-002e
First Commonwealth Bank Indiana, Pa. Rose Falise Feb. 27 FDIC-08-263e
Hancock Bank of Louisiana Baton Rouge, La. Lester John Brooks Jr. Feb. 27 FDIC-07-14
Provident Bank Jersey City, N.J. Catherine Valencia Feb. 27 FDIC-08-096e
Republic First Bank Philadelphia Paul A Verdi Jr. Feb. 11 FDIC-08-313e
Republic First Bank Philadelphia Maria O. Verdi Feb. 11 FDIC-08-314e
Slade's Ferry Trust Co. Somerset, Mass. Cheryl A. Swift Feb. 11 FDIC-07-124e

The FDIC issued the following civil money penalties.

Institution Location Amount Date of Order Order No.
Citizens Deposit Bank of Arlington Inc. Arlington, Wis. $2,400 Feb. 9 FDIC-08-258k
Cross Keys Bank St. Joseph, La. $17,335 Feb. 25 FDIC-08-367k
Petefish, Skiles & Co. Virginia, Ill. $2,350 Feb. 18 FDIC-08-161k
Spencer Savings Bank Spencer, Mass. $5,500 Feb. 12 FDIC-08-343k
Spencer Savings Bank Spencer, Mass. $4,805 Feb. 12 FDIC-08-344k
Sterling Savings Bank Spokane, Wash. $125,000 Feb. 12 FDIC-08-285k
Sun Security Bank Ellington, Mo. $15,900 Feb. 10 FDIC-08-329k
Sun Security Bank Ellington, Mo. $5,500 Feb. 10 FDIC-08-330k
The Tampa State Bank Tampa, Kan. $6,150 Feb. 11 FDIC-08-255k
Wells Fargo Financial Bank Sioux Falls, S.D. $125,000 Feb. 11 FDIC-09-021k

The FDIC terminated the following cease-and-desist orders.

Institution Location Date of Order Order No.
Central Progressive Bank Lacombe, La. Feb. 19 FDIC-07-105b
First Vietnamese American Bank Westminster, Calif. Feb. 9 FDIC-06-195b
Oakland Deposit Bank Oakland, Tenn. Feb. 24 FDIC-08-319b

An Order Approving Application to Modify Order of Prohibition From Further Participation against David Cruse was issued by the FDIC against Goreville State Bank in Goreville, Ill.

A prompt corrective action was filed by the FDIC on Feb. 13 against Venture Bank in Lacey, Wash., while a termination of insurance occurred at Escrow Bank USA in Midvale, Utah, and an order was granted to Pedro Ayala-Garcia giving permission to participate in the affairs of any insured depository institution.

The Federal Reserve Board reported that it entered formal written agreements with the following financial institutions and their regulators. Among other things, the agreements require operational improvements, capital conservation and progress reports.

Financial Institution
Date of Order
Federal Reserve Bank
Docket No.
Bankeast Corp., Bankeast Knoxville, Tenn. March 23 Atlanta na 09-015-WA/RB-HC
Blossman Bancshares Inc. Lacombe, La. March 26 Atlanta State of Louisiana Office of Financial Institutions 09-013-WA/RB-HC
Community Bankshares Inc., Community Banks of Colorado Greenwood Village, Colo. March 25 Kansas City Colorado Division of Banking 09-028-WA/RB-HC
First State Bank of Red Bud Red Bud, Ill. March 17 St. Louis Illinois Department of Financial and Professional Regulation Division of Banking 09-012-WA/RB-SM
United Security Bancshares Inc. Woodstock, Ga. March 31 Atlanta Banking Commissioner of the State of Georgia 09-018-WA/RB-HC
Venture Financial Group Inc. Dupont, Wash. April 6 San Francisco na 09-026-WA/RB-HC
San Joaquin Bancorp, San Joaquin Bank Bakersfield, Calif. April 7 San Francisco State of California, Department of Financial Institutions 09-031-WA/RB-HC

Consent Prompt Corrective Action Directives were issued by the Federal Reserve Board on April 1 against Michigan Heritage Bank in Farmington Hills, Mich., and on March 26 against Heritage Bank in Topeka, Kan.

On March 30, the Federal Reserve Board terminated an August 27, 2003, cease-and-desist order against WestLB AG, Dusseldorf, Germany, and its New York branch.

Scott M. Polakoff, acting Office of Thrift Supervision director, was placed on leave as the Treasury Department investigates OTS complacency in the backdating of capital contributions that occurred in August 2008, the OTS said last month. OTS Deputy Director and Chief Counsel John E. Bowman was appointed acting director of the agency.

In the Matter of DAVID CRUSE, individually, and as an institution-affiliated party of GOREVILLE STATE BANK GOREVILLE, ILLINOIS INSURED STATE NONMEMBER Merged into, and now known as REGIONS BANK BIRMINGHAM, ALABAMA STATE MEMBER BANK).
FDIC-94-1e, FDIC-08-110e&j, Feb. 19, 2008 (Federal Deposit Insurance Corporation, Washington, D.C.).

In the Matter of Venture Bank, Lacey, Washington.
FDIC-09-058 PCAS, Feb. 13, 2009 (Federal Deposit Insurance Corporation, Washington, D.C.)

In the Matter of Escrow Bank USA, Midvale, Utah, (Insured State Nonmember Bank).
FDIC-07-128p, Feb. 13, 2009 (Federal Deposit Insurance Corporation, Washington, D.C.)

In the Matter of Pedro Ayala-Garcia, in the Application for Consent to Participate in the Conduct of the Affairs of Any Insured Depository Institution.
FDIC-08-232L, Feb. 27, 2009 (Federal Deposit Insurance Corporation, Washington, D.C.)

In the Matter of Michigan Heritage Bank, Farmington Hills, Michigan.
Docket No. 09-041-PCA-SM, April 1, 2009 (Board of Governors of the Federal Reserve System, Washington, D.C.)

In the Matter of Heritage Bank, Topeka, Kansas.
Docket No. 09-032-PCA-SM, March 26, 2009 (Board of Governors of the Federal Reserve System, Washington, D.C.)

Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of

e-mail: [email protected]

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