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

Spike in Regulatory Actions Against Banks

Recent regulatory actions against financial institutions

Nov. 5, 2010


photo of Paula Parisot
Paula Parisot
Regulatory actions by one bank regulator have spiked compared to a year ago and were up nearly a third on a month-over-month basis. The increase spells trouble for some banks.

The Federal Home Loan Bank of Seattle disclosed last month that it entered into a Stipulation and Consent to the Issuance of a Consent Order with its regulator, the Federal Housing Finance Agency.

After the bank successfully completes a stabilization period in the second-quarter 2011, it can repurchase member capital stock and begin paying dividends given that it achieves and maintains specified financial and operational requirements; fixes problems with "its oversight and management, asset improvement program, capital adequacy and retained earnings, risk management, compensation practices, examination findings, and information technology;" and returns to a "safe and sound" condition.

At the Federal Deposit Insurance Corp., 82 matters were processed during September, jumping from 63 matters a month earlier. Regulatory activity at the FDIC has ballooned from just 48 matters during the same month last year.

The FDIC was joined by the Office of the Comptroller of the Currency in issuing 37 cease-and-desist orders or, as the FDIC now refers to them, "Consent Orders." Banks that have failed often faced a cease-and-desist order 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
Bankmeridian, National Association Columbia, SC OCC 2010-184 16-Sep
AmericaUnited Bank and Trust Company USA Schaumburg, IL FDIC FDIC-10-457b 24-Sep
Bank of Alameda Alameda, Calif. FDIC FDIC-10-546b 9/17/2010
Bank of Alameda Alameda, CA FDIC FDIC-10-546b 17-Sep
Bank of Fairfield Fairfield, WA FDIC FDIC-10-627b 28-Sep
Bloomfield State Bank Bloomfield, IN FDIC FDIC-10-497b 17-Sep
Charter Oak Bank Napa, CA FDIC FDIC-10-635b 2-Sep
Citizens State Bank - Midwest Cavalier, ND FDIC FDIC-10-550b 27-Sep
CNLBank Orlando, Florida FDIC FDIC-10-493b 20-Sep
Colorado Capital Bank Castle Rock, CO FDIC FDIC-10-514b 9-Sep
Community Shores Bank Muskegon, MI FDIC FDIC-10-397b 2-Sep
Community State Bank Austin, TX FDIC FDIC-10-494b 9-Sep
County Bank Rehoboth Beach, DE FDIC FDIC-10-454b 20-Sep
Farmers State Bank of Sublette Sublette, IL FDIC FDIC-10-531b 16-Sep
First Savings Bank Northwest Renton, WA FDIC FDIC-10-524b 24-Sep
First Security Bank of Nevada Las Vegas, NV FDIC FDIC-10-547b 1-Sep
First Texoma National Bank Durant, Okla. OCC 2010-183 9/17/2010
Foundation Bank Bellevue, WA FDIC FDIC-10-058b 17-Sep
HSBC Bank USA, National Association McLean, VA OCC 2010-199 6-Oct
Insouth Bank Brownsville, TN FDIC FDIC-10-468b 30-Sep
ISB Community Bank Ixonia, WI FDIC FDIC-10-344b 14-Sep
JPMorgan Chase Bank, National Association-Randy Chipman na OCC 2010-200 Aug. 30
JPMorgan Chase Bank, National Association-Brett Nelson na OCC 2010-187 Oct. 4
Lone Summit Bank Lake Lotawana, MO FDIC FDIC-10-574b 27-Sep
Minnwest Bank South Tracy, MN FDIC FDIC-10-509b 27-Sep
Monterey County Bank Monterey, CA FDIC FDIC-09-081b, FDIC-10-221k 29-Sep
Monterey County Bank Monterey, CA FDIC FDIC-10-633b 1-Sep
Old Harbor Bank Clearwater, FL FDIC FDIC-10-463b 1-Sep
Patriot Bank Minnesota Wyoming, MN FDIC FDIC-10-476b 29-Sep
Premier Bank Wilmette, IL FDIC FDIC-10-233b 3-Sep
Princeville State Bank Princeville, IL FDIC FDIC-10-491b 16-Sep
Service 1st Bank of Nevada Las Vegas, NV FDIC FDIC-10-512b 1-Sep
Texas Community Bank, National Association The Woodlands, TX OCC 2010-185 15-Sep
The Elgin State Bank Elgin, IL FDIC FDIC-10-439b 9-Sep
Village Bank St. Francis, MN FDIC FDIC-10-426b 10-Sep
Washington Financial Bank Washington, PA FDIC FDIC-10-506b 3-Sep
Westside Community Bank University Place, WA FDIC FDIC-10-450b 24-Sep

The FDIC and the OCC terminated cease-and-desist orders against six institutions.

Orders Terminating Cease-and-Desist Orders
Company Location Regulator Order/Docket No. Date
First Carolina State Bank Rocky Mount, NC FDIC FDIC-09-706b 21-Sep
First National Bank and Trust Co. Powell, Wyo. OCC EA#2008-110 Sep. 8
State Bank of Burnettsville Burnettsville, IN FDIC FDIC-09-534b 16-Sep
Sterling Savings Bank Spokane, WA FDIC FDIC-09-507b 27-Sep
Sunrise Bank of Atlanta Atlanta, GA FDIC FDIC-09-728b 3-Sep
The Citizens Bank of Weir, Kansas (Now Known as Cbw Bank) Weir, KS FDIC FDIC-07-254b 29-Sep

The OCC, the Federal Reserve and several state banking regulators recently entered formal agreements with 21 institutions. Such agreements often require the conservation of capital, operational improvements and occasional management changes.

Formal Agreements
Company Location Regulator Order/Docket No. Date
First Commercial Bank of Florida Orlando, Florida THE FEDERAL RESERVE SYSTEM WASHINGTON, D.C. 10-219-PCA-SM 25-Oct
First National Bank of Chester County West Chester, PA OCC 2010-192 27-Aug
The Camden National Bank Camden, AL OCC 2010-189 9-Sep
1st Financial Services Corporation Hendersonville, North Carolina FEDERAL RESERVE BANK OF RICHMOND 10-177-WA/RB-HC 10/13/2010
First National Bank Groesbeck, TX OCC 2010-194 24-Aug
First Southwest Bancorporation, Inc. Alamosa, Colorado FEDERAL RESERVE BANK OF KANSAS CITY 10-207-WA/RB-HC 10/20/2010
FNB United Corp. Asheboro, North Carolina FEDERAL RESERVE BANK OF RICHMOND 10-199-WA/RB-HC 10/21/2010
Highlands Bankshares, Inc., Highlands Union Bank Abingdon, Virginia FEDERAL RESERVE BANK OF RICHMOND 10-179-WA/RB-HC, 10-179-WA/RB-SM 10/13/2010
Investors Financial Corporation of Pettis County, Inc. Sedalia, Missouri FEDERAL RESERVE BANK OF KANSAS CITY 10-184-WA/RB-HC 10/12/2010
Nevada National Bank Las Vegas, NV OCC 2010-191 26-Aug
North Georgia National Bank Calhoun, GA OCC 2010-190 13-Sep
NORTHERN CALIFORNIA BANCORP Inc. Monterey, Calif. Federal Reserve Bank of San Francisco 10-222-WA/RB-HC Oct. 29
Omega Capital Corp. Centennial, Colorado FEDERAL RESERVE BANK OF KANSAS CITY 10-213-WA/RB-HC 20-Oct
The First National Bank of Eagle River Eagle River, WI OCC 2010-195 23-Sep
The Peoples National Bank Easley, SC OCC 2010-193 16-Aug
Woodforest National Bank The Woodlands, TX OCC 2010-203 6-Oct

The OCC terminated agreements in September with Bankmeridian, N.A., in Columbia, S.C., and Texas Community Bank, N.A., in The Woodlands, Texas.

The FDIC and the OCC banned 15 individual from banking through Removal-and-Prohibition orders issued pursuant to Section 8(e), 12 U.S.C. § 1818(e)

Removal / Prohibition Orders
Employer Individual Location Regulator Order # Date
Banterra Bank Kenneth E. Hayse Marion, IL FDIC FDIC-07-219e 23-Sep
Beneficial Mutual Savings Bank Marilyn Eldebeisi Philadelphia, PA FDIC FDIC-10-331e 23-Sep
Branch Banking and Trust Company Qiana Dantelle Ruffin Winston-Salem, NC FDIC FDIC-10-359e 23-Sep
Carolina First Bank Blair Witkowski Greenville, SC FDIC FDIC-10-419e 22-Sep
International Bank of Commerce Jerald Brown Laredo, TX FDIC FDIC-09-505e 23-Sep
JPMorgan Chase Bank, National Association Eric Wheeler Columbus, OH OCC 2010-188 30-Aug
JPMorgan Chase Bank, National Association James Chanse Carlson Columbus, OH OCC 2010-196 30-Aug
JPMorgan Chase Bank, National Association Timothy Beckstrand Columbus, OH OCC 2010-201 4-Oct
North Akron Savings Bank Patricia Lynn Davis-Boarman Akron, OH FDIC FDIC-09-537e 23-Sep
Republic Federal Bank National Association Miguel Morera Miami, FL OCC 2010-186 9-Sep
The Bank of Magnolia Company John D. Hreha Magnolia, OH FDIC FDIC-08-105e 23-Sep
The Bank of Magnolia Company Carla M. Woods Magnolia, OH FDIC FDIC-09-017e 23-Sep
The Bank of Magnolia Company Denise M. Conley Magnolia, OH FDIC FDIC-09-018e 23-Sep
The Frost National Bank Veronica D. Guerra San Antonio, TX OCC 2010-197 7-Sep
The Simsbury Bank & Trust Company Janice L. Zdun Simsbury, CT FDIC FDIC-10-312e 23-Sep

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 Regulator Order/Docket No. Amount Date
Woodforest National Bank The Woodlands, TX OCC 2010-202 na 7-Oct
Bank of The Bluegrass and Trust Company Lexington, KY FDIC FDIC-10-499k $2,500.00 22-Sep
Bank of Wichitas Snyder, OK FDIC FDIC-10-563k $4,000.00 23-Sep
Banterra Bank-Kenneth E. Hayse Marion, IL FDIC FDIC-10-063k $25,000.00 23-Sep
Farmers State Bank Hillsboro, WI FDIC FDIC-10-124k $3,600.00 1-Sep
First Neighborhood Bank Spencer, WV FDIC FDIC-10-533k $4,750.00 17-Sep
Investors Community Bank Manitowoc, WI FDIC FDIC-10-078k $4,650.00 22-Sep
Jefferson Bank San Antonio, TX FDIC FDIC-10-405k $10,000.00 15-Sep
JPMorgan Chase Bank-Eric Wheeler Columbus, OH OCC 2010-188 na 30-Aug
JPMorgan Chase Bank, National Association-Brett Nelson Columbus, OH OCC 2010-187 na 30-Aug
Marathon Savings Bank Wausau, WI FDIC FDIC-10-367k $5,500.00 21-Sep
Marathon Savings Bank Wausau, WI FDIC FDIC-10-369k $4,180.00 21-Sep
Middlesex Savings Bank Natick, MA FDIC FDIC-10-631k $3,940.00 9-Sep
Monterey County Bank Monterey, CA FDIC FDIC-09-081b, FDIC-10-221k $500,000.00 29-Sep
Pacific Valley Bank Salinas, CA FDIC FDIC-10-581k $3,740.00 2-Sep
Republic Federal Bank National Association-Miguel Morera Miami, FL OCC 2010-186 na 9-Sep
Sicily Island State Bank Sicily Island, LA FDIC FDIC-10-566k $3,800.00 23-Sep
State Bank of Southern Utah Cedar City, UT FDIC FDIC-10-599k $7,500.00 28-Sep
Surety Bank Deland, FL FDIC FDIC-10-542k $2,500.00 24-Sep
The Bank of Holly Springs Holly Springs, MS FDIC FDIC-10-562k $4,000.00 23-Sep
The Citizens Savings Bank Martins Ferry, OH FDIC FDIC-10-338k $3,650.00 2-Sep
The Park Bank Madison, WI FDIC FDIC-10-526k $1,650.00 9-Sep
The Peoples State Bank of Newton, Illinois Newton, IL FDIC FDIC-10-371k $1,540.00 8-Sep
Union Bank of Blair Blair, WI FDIC FDIC-10-410k $2,600.00 9-Sep
United Bank & Trust Company Versailles, KY FDIC FDIC-10-388k $4,000.00 22-Sep
United Bank & Trust Company Versailles, KY FDIC FDIC-10-389k $4,800.00 22-Sep
Valley Community Bank Pleasanton, CA FDIC FDIC-10-603k $875.00 23-Sep
Vermilion Valley Bank Piper City, IL FDIC FDIC-10-481k $1,950.00 8-Sep
West Pointe Bank Oshkosh, WI FDIC FDIC-09-516k $5,005.00 9-Sep
West Texas State Bank Odessa, TX FDIC FDIC-10-597k $7,500.00 2-Sep

Five banks faced FDIC Prompt Corrective Actions, which are issued pursuant to Section 38, 12 U.S.C. § 1831o.

Final Orders - Prompt Corrective Actions
Company Location Regulator Order/Docket No. Date
Charter Oak Bank Napa, CA FDIC FDIC-10-749PCAS 30-Sep
First Vietnamese American Bank Westminster, CA FDIC FDIC-10-691PCAS 28-Sep
FirsTier Bank Louisville, CO FDIC FDIC-10-224PCAS 21-Apr
Nevada Commerce Bank Las Vegas, NV FDIC FDIC-10-688PCAS 14-Sep
Valley Community Bank St. Charles, IL FDIC FDIC-10-637PCAS 8-Sep

Just one institution faced an FDIC Final Order issued pursuant to Section 19, 12 U.S.C. § 1829.

Final Orders - Section 19
Individual Regulator Order/Docket No. Date
Alicia Mari Evans FDIC FDIC-10-171L Sep. 10

An order conditionally granting a waiver of Cross Guarantee Liability (No. FDIC-10-696) was issued by the FDIC pursuant to Section 5(e), 12 U.S.C. § 1815(e) for Bank of San Francisco in San Francisco on Sept. 27.

A Notice of Charge and of Hearing (No. FDIC-10-264b) was issued on Sept. 10 for Community South Bank in Parsons, Tenn. The same was issued on Sept. 17 for Pacific Rim Bank in Honolulu (No. FDIC-10-471b).

ARCUS Bank in Salt Lake City voluntarily terminated its insurance On Sept. 16 pursuant to Section (q), 12 U.S.C. § 1818(q).

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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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