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Financial Regulation News | Mortgage Regulations
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Banks Ordered to Cease-and-Desist

Recent regulatory actions against financial institutions

Oct. 11, 2010

By MortgageDaily.com staff


Banks have faced a multitude of regulatory actions lately. The number of cease-and-desist orders recently issued by federal banking regulators have been strong, though several such orders have also been terminated. The Federal Deposit Insurance Corp. has a new name for cease-and-desist orders.

Regulatory actions against financial institutions by the FDIC declined to 63 matters in August from July's 76. A year earlier, the FDIC reported just 48 matters.

The FDIC has stopped calling final orders issued pursuant to Section 8(b), 12 U.S.C. §1818(b) "cease and desist." Its latest list of monthly actions now refers to such orders as "consent orders." The FDIC has gone so far as to amend its previously issued announcement for July actions, replacing the phrase "cease-and-desist" with "consent orders."

The following cease-and-desist orders and "consent" orders were recently issued.

Cease-and-Desist and "Consent" Orders
Company Location Regulator Order/Docket No. Date
Bank of Lincoln County Fayetteville, TN FDIC FDIC-10-023b 10-Aug
The Bank of Miami, National Association Coral Gables, Fla. OCC 2010-161 7/21/2010
Bank of the Prairie Olathe, Kan. FDIC FDIC-10-459b 26-Aug
Builders Bank Chicago FDIC FDIC-10-535b 5-Aug
Cambridge State Bank Cambridge, WI FDIC FDIC-10-337b 16-Aug
Colonial American Bank Horsham, PA FDIC FDIC-10-473b 11-Aug
The Community Bank, A Massachusetts Cooperative Bank Brockton, MA FDIC FDIC-10-588b 12-Aug
Community Business Bank Sauk City, WI FDIC FDIC-10-455b 9-Aug
Communityone Bank, National Association Asheboro, N.C. OCC 2010-163 7/22/2010
Cornerstone Bank Enderlin, ND FDIC FDIC-10-470b 12-Aug
Farmers Exchange Bank Louisville, AL FDIC FDIC-10-392b 5-Aug
First Carolina State Bank Rocky Mount, NC FDIC FDIC-10-319b 24-Aug
First Guaranty Bank and Trust Company of Jacksonville Jacksonville, FL FDIC FDIC-09-686b 11-Aug
First National Bank USA Boutte, La. OCC 2010-162 8/13/2010
First National Community Bank Dunmore, Pa. OCC 2010-182 9/1/2010
First South Bank Spartanburg, SC FDIC FDIC-10-300b 27-Aug
First State Bank New London, WI FDIC FDIC-10-215b 31-Aug
HSBC North America Holdings, Inc. New York Federal Reserve Board 10-202-B-HCB-HCM Oct. 4
HSBC Bank USA, N.A. McLean, Virginia OCC AA-EC-10-98B-HCM Sep. 24
Northwest Bank Lake Oswego, OR FDIC FDIC-10-421b 30-Aug
Ozark Heritage Bank, National Association Mountain View, Ark. OCC 2010-160 8/26/2010
Pacific Capital Bank, National Association Santa Barbara, Calif. OCC 2010-168 9/2/2010
The Park Bank Madison, WI FDIC FDIC-10-318b 13-Aug
Proficio Bank Salt Lake City, UT FDIC FDIC-10-449b 5-Aug
Securant Bank & Trust Menomonee Falls, WI FDIC FDIC-10-380b 24-Aug
Shorebank, Pacific Ilwaco, WA FDIC FDIC-09-513b 10-Aug
SouthPoint Bank Birmingham, AL FDIC FDIC-10-414b 10-Aug
Syringa Bank Boise, ID FDIC FDIC-10-314b 19-Aug
TCF National Bank Sioux Falls, S.D. OCC 2010-164 7/20/2010
United Pacific Bank City of Industry, CA FDIC FDIC-10-392b 5-Aug
Western Commercial Bank Woodland Hills, CA FDIC FDIC-10-575b 20-Aug

The FDIC issued 19 orders that terminated the following cease-and-desist orders. In July, just nine such orders were issued.

Orders Terminating Cease-and-Desist Orders
Company Location Regulator Order/Docket No. Date
Advanta Bank Corp. Draper, UT FDIC FDIC-09-651b 8/20/10
Advanta Bank Corp. Draper, UT FDIC FDIC-09-266b 8/20/10
Citizens Community Bank Ridgewood, NJ FDIC FDIC-07-265b 8/20/10
Coastal Community Bank Panama City Beach, FL FDIC FDIC-09-062b 8/13/10
The Community Bank, A Massachusetts Cooperative Bank Brockton, MA FDIC FDIC-09-212b 8/12/10
Community National Bank at Bartow Bartow, Fla. OCC Closed 8/20/2010
Community Security Bank New Prague, MN FDIC FDIC-09-209b 8/23/10
Crescent Bank and Trust Co. Jasper, GA FDIC FDIC-09-087b 8/4/10
Eastern National Bank Miami OCC 2010-180 8/30/2010
Eurobank San Juan, PR FDIC FDIC-07-018b 8/20/10
Eurobank San Juan, PR FDIC FDIC-09-317b 8/20/10
Kenney Bank and Trust Kenney, IL FDIC FDIC-08-102b 8/3/10
LibertyPointe Bank New York, NY FDIC FDIC-09-112b 8/20/10
Northwest Bank & Trust Acworth, GA FDIC FDIC-09-685b 8/13/10
The Park Avenue Bank New York, NY FDIC FDIC-08-401b 8/26/10
Peoples State Bank Jeffersonville, GA FDIC FDIC-09-694b 8/18/10
R-G Premier Bank of Puerto Rico Hato Rey, PR FDIC FDIC-06-045b 8/17/10
Sterling Financial Corp. Spokane, Wash. FDIC, Washington Department of Financial Institutions na announced Sep. 27
Sunrise Bank of Atlanta Atlanta, GA FDIC FDIC-09-696b 8/18/10
Town Center Bank Coppell, TX FDIC FDIC-08-236b 8/10/10
Waterford Village Bank Williamsville, NY FDIC FDIC-08-402b 8/20/10
Westernbank Puerto Rico Mayaguez, PR FDIC FDIC-08-275b 8/20/10

Formal agreements -- which require the conservation of capital and sometimes require operational or management changes -- were recently issued by the OCC and the fed.

Formal Agreements
Company Location Regulator Order/Docket No. Date
American National Bank of Minnesota Baxter, Minn. OCC 2010-172 8/20/2010
Bank of the Eastern Shore Cambridge, Md. Federal Reserve Bank of Richmond, State of Maryland Commissioner of Financial Regulation 10-161-WA/RB-SMC Aug.31
Butte State Co. Butte, Neb. Federal Reserve Bank of Kansas City, Nebraska Department of Banking and Finance 10-180-WA/RB-HC, 10-180-WA/RB-SM Sept. 7
Financial Bancshares Co. Becker, Minn. FEDERAL RESERVE BANK OF MINNEAPOLIS 10-198-WA/RB-HCC Sep. 30
First American Bancorp Greenwood Village, Colo. Federal Reserve Bank of Kansas City, State of Colorado Division of Banking 10-168-WA/RB-HC, 10-168-WA/RB-SM Aug. 20
First Community Holding Co. Hammond, La. Federal Reserve Bank of Atlanta, Louisiana Office of Financial Institutions 10-170-WA/RB-HCC Sept. 3
First Heritage Corp. Carthage, Miss. Federal Reserve Bank of Atlanta 10-203-WA/RB-HCC Sept. 23
First National Bancorporation of Stoughton Inc. Stoughton, Wis. Federal Reserve Bank of Chicago 10-153-WA/RB-HCC Aug. 26
First National Bank of The North Sandstone, Minn. OCC 2010-174 8/2/2010
First Security Group Inc. Chattanooga, Tenn. Federal Reserve Bank of Atlanta 10-187-WA/RB-HCC Sep. 7
First State Bank of Warner Warner, South Dakota Federal Reserve Bank of Minneapolis, and the State of South Dakota, Department of Revenue and Regulation, Division of Banking 10-169-WA/RB-SMC Sep. 16
HomeStar Financial Group, Inc. Manteno, Illinois FEDERAL RESERVE BANK OF CHICAGO 10-152-WA/RB-HCC Sep. 27
The Lamesa National Bank Lamesa, Texas OCC 2010-178 8/3/2010
Los Angeles National Bank Buena Park, Calif. OCC 2010-171 7/16/201
Miners and Merchants Bancorp Inc., TruPoint Bank Grundy, Virginia Federal Reserve Bank of Richmond 10-131-WA/RB-HC, 10-131-WA/RB-SM Sept. 16
Monarch Community Bancorp, Inc. Coldwater, Michigan Federal Reserve Bank of Chicago 10-193-WA/RB-HCC Sep. 21
Mountain West Financial Corp. Helena, Montana Federal Reserve Bank of Minneapolis 10-147-WA/RB-HCC Aug. 31
National Bank of New York City Flushing, N.Y. OCC 2010-175 7/13/2010
Nextier Bank, National Association Evans City, Pa. OCC 2010-176 6/28/2010
Neighborhood Bank Corp. Palatka, Florida FEDERAL RESERVE BANK OF ATLANTA 10-197-WA/RB-HCC Sept. 20
NexTier Inc. Butler, Pennsylvania FEDERAL RESERVE BANK OF CLEVELAND 10-190-WA/RB-HCC Oct. 4
Oregon Community Bank & Trust Oregon, Wis. Federal Reserve Bank of Chicago, State of Wisconsin Department of Financial Institutions 10-166-WA/RB-SMC Aug. 27
Osceola Bancorporation, Inc. Osceola, Wisconsin Federal Reserve Bank of Minneapolis 10-174-WA/RB-HCM Aug. 27
Pacific Mercantile Bancorp, Pacific Mercantile Ban Costa Mesa, California Federal Reserve Bank of San Francisco 10-070-WA/RB-HC, 10-070-WA/RB-SMA Aug. 31
The Slocomb National Bank Slocomb, Ala. OCC 2010-170 8/10/2010
South Group Bancshares, Inc. Glennville, Georgia Federal Reserve Bank of Atlanta, and the Banking Commissioner of the State of Georgia 10-183-WA/RB-HCC Aug. 31
State Bank Financial La Crosse, Wisconsin Federal Reserve Bank of Minneapolis, and the State of Wisconsin Department of Financial Institutions 10-142 -WA/RB-SM Sep. 13
Texas Heritage National Bank Daingerfield, Texas OCC 2010-177 8/12/2010
TIB Financial Corp. Naples, Florida Federal Reserve Bank of Atlanta 10-172-WA/RB-HCM Sep. 13
Trans Pacific Bancorp San Francisco Federal Reserve Bank of San Francisco 10-186 -WA/RB-HC Sept. 15
Valley Financial Corp., Valley Bank Roanoke, Virginia FEDERAL RESERVE BANK OF RICHMOND 10-167 -WA/RB-HC, 10-167 -WA/RB-SMISn Sep. 30
Western National Bank Cass Lake, Minn. OCC 2010-173 7/13/2010

The OCC said it terminated formal agreements with Gold Country Bank, National Association; The Bank of Miami, National Association; First National Bank USA; and First National Bank.

Removal-and-prohibition orders were issued against the following banks. The FDIC said it issues removal-and-prohibition orders pursuant to Section 8(e), 12 U.S.C. § 1818(e).

Removal / Prohibition Orders
Employer Individual Location Regulator Order # Date
American Bank, National Association Richard E. Magnuson Lemars, Iowa OCC 2010-169 8/24/2010
BankPlus Charles K. Payne, Jr. Belzoni, MS FDIC FDIC-09-040e 7/21/10
BMI Federal Credit Union John Freundnerrk Dublin, Ohioerrk NCUA na announced Sep. 29
Peoples Bank of the South Warren Corban Bude, MS FDIC FDIC-09-709e 8/24/10
Planters Bank & Trust Co. Sandra Jones Indianola, MS FDIC FDIC-10-152e 8/23/10
School Systems Federal Credit Union Carla Y. Daniels Albany, New York NCUA na announced Sep. 29
Seamen's Bank Kathleen J. Morris Provincetown, MA FDIC FDIC-10-403e 8/24/10

Several banks recently faced civil money penalties, which are issued by the FDIC pursuant to Section 8(i), 12 U.S.C. § 1818(i).

Final Orders - Civil Money Penalties
Company Location Regulator Order/Docket No. Amount Date
AmBank Silver City, NM FDIC FDIC-10-025k $5,600 3-Aug
American Bank, National Association (Richard E. Magnuson) Lemar, Iowa OCC 2010-169 na 8/24/2010
Bank of Bluffs Bluffs, IL FDIC FDIC-10-313k $7,150 6-Aug
Bank of Mauston Mauston, WI FDIC FDIC-09-730k $1,925 3-Aug
Bank of Stockton Stockton, CA FDIC FDIC-10-523k $7,315 17-Aug
The First National Bank of Talladega Talladega, Ala. OCC 2010-165 na 7/27/2010
Intercredit Bank, National Association Miami OCC 2010-166 na 6/21/2010
Kearney Trust Co. Kearney, MO FDIC FDIC-10-492k $2,500 9-Aug
Metro Bank Lemoyne, PA FDIC FDIC-10-530k $6,075 31-Aug
Peoples Security Bank Louisa, KY FDIC FDIC-10-345k $1,500 5-Aug
Rockwood Bank Eureka, MO FDIC FDIC-10-510k $2,000 23-Aug
Savings Bank of Mendocino County Ukiah, CA FDIC FDIC-10-534k $8,855 25-Aug
Summit Community Bank East Lansing, MI FDIC FDIC-10-383k $5,500 2-Aug
Wood & Huston Bank Marshall, MO FDIC FDIC-10-460k $13,090 23-Aug

Prompt corrective actions were taken against several companies. Such actions taken by the FDIC were done pursuant to Section 38, 12 U.S.C. § 1831o.

Final Orders - Prompt Corrective Actions
Company Location Regulator Order/Docket No. Date
American Patriot Bank Greeneville, TN FDIC FDIC-10-472PCAS 8/17/10
First Community Bank Taos, New Mexico Federal Reserve Board 10-182-PCA-SM Aug. 26
Idaho First Bank McCall, ID FDIC FDIC-10-557PCAS 8/20/10
LandMark Bank of Florida Sarasota, Florida Federal Reserve Board 10-188-PCA-SM Sep. 17
Peoples State Bank Hamtramck, MI FDIC FDIC-10-598PCAS 8/18/10
Western Commercial Bank Woodland Hills, CA FDIC FDIC-10-558PCAS 8/5/10

The FDIC issues Section 19 orders pursuant to Section 19, 12 U.S.C. § 1829.

Final Orders - Section 19
Individual Regulator Order/Docket No. Date
Daniel Gustavo Diaz FDIC FDIC-10-262L 8/23/10
Todd Brian Haynes FDIC FDIC-10-226L 8/11/10

The OCC issued a capital directive, No. 2010-167, on Sept. 1 against Florida Capital Bank, National Association, in Jacksonville, Fla.


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