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

Bank Regulators Rein in Actions

Recent regulatory actions against banks, thrifts and credit unions

Dec. 1, 2010


photo of Paula Parisot
Paula Parisot
Monthly actions by banking regulators against federally insured institutions took a dive -- falling 30 percent. The number of cease-and-desist orders issued tumbled more than 40 percent.

At the Federal Deposit Insurance Corp., 57 matters were processed during October, dropping from 82 matters a month earlier. Regulatory activity at the FDIC has shrunk significantly from the 86 matters during the same month last year.

The FDIC was joined by the Office of the Comptroller of the Currency in issuing 21 cease-and-desist orders or consent orders during October. Such orders numbered 37 in the last regulatory report. The monthly decline contrasts the FDIC's third-quarter banking report, which indicated the number of problem institutions had risen to 860 from the second quarter's 829 problem banks.

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
American Founders Bank, Inc. Lexington, KY FDIC FDIC-10-444b 6-Oct
Border State Bank Greenbush, MN FDIC FDIC-10-640b 27-Oct
Brimfield Bank Brimfield, IL FDIC FDIC-10-554b 27-Oct
D'Hanis State Bank D'Hanis, TX FDIC FDIC-10-662b 29-Oct
Farmers State Bank Lumpkin, GA FDIC FDIC-10-407b 26-Oct
Fidelity Bank of Florida, National Association Merritt Island, Fla. OCC 2010-209 27-Oct
First Capital Bank Guthrie, OK FDIC FDIC-10-591b 7-Oct
First Century Bank Tazewell, TN FDIC FDIC-10-653b 18-Oct
Heritage First Bank Orange Beach, AL FDIC FDIC-10-636b 22-Oct
Holbrook Co-operative Bank Holbrook, MA FDIC FDIC-10-744b 6-Oct
McHenry Savings Bank McHenry, IL FDIC FDIC-10-739b 29-Oct
Nantahala Bank & Trust Company Franklin, NC FDIC FDIC-10-501b 21-Oct
Nixon State Bank Nixon, TX FDIC FDIC-10-504b 12-Oct
Sanibel Captiva Community Bank Sanibel, FL FDIC FDIC-10-502b 1-Oct
Santa Clara Valley Bank, National Association Santa Paula, Calif. OCC 2010-208 26-Oct
Savoy Bank New York, New York FDIC FDIC-09-118b 25-Oct
Sonoran Bank, National Association Phoenix, Az. OCC 2010-207 21-Oct
The Delaware County Bank and Trust Company Lewis Center, OH FDIC FDIC-10-559b 27-Oct
Town & Country Bank and Trust Company Bardstown, KY FDIC FDIC-10-560b 8-Oct
United Americas Bank, National Association Atlanta, Ga. OCC 2010-210 7-Oct
West One Bank Kalispell, MT FDIC FDIC-10-592b 27-Oct

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

Orders Terminating Consent or Cease-and-Desist Orders
Company Location Regulator Order/Docket No. Date
American Founders Bank, Inc. Lexington, KY FDIC FDIC-07-026b 12-Oct
Bank of Ellijay Ellijay, GA FDIC FDIC-09-338b 1-Oct
Carolina First Bank Greenville, SC FDIC FDIC-10-121b 5-Oct
First Bank Farmersville, TX FDIC FDIC-09-420b 13-Oct
First Commerce Community Bank Douglasville, GA FDIC FDIC-08-339b 1-Oct
Haven Trust Bank Florida Ponte Vedra Beach, FL FDIC FDIC-09-623b 13-Oct
The Peoples Bank Winder, GA FDIC FDIC-09-590k 4-Oct
Torrey Pines Bank San Diego, CA FDIC FDIC-09-448b 20-Oct
Westbridge Bank and Trust Chesterfield, MO FDIC FDIC-09-016b 28-Oct

The OCC, the Federal Reserve and several state banking regulators recently entered formal agreements with 15 institutions. Such agreements often require the conservation of capital, operational improvements and, occasionally, management changes.

Formal Agreements
Company Location Regulator Order/Docket No. Date
America's Community Bank Blue Springs, Missouri FEDERAL RESERVE BANK OF KANSAS CITY 10-230-WA/RB-SM 11/17/2010
Bank of Choice Holding Company Greeley, Colorado FEDERAL RESERVE BANK OF KANSAS CITY 10-216-WA/RB-HC 2-Nov
Cadence Financial Corporation Starkville, Mississippi FEDERAL RESERVE BANK OF ST. LOUIS 10-223-WA/RB-HC 11/17/2010
Cascade Financial Corporation Everett, Washington FEDERAL RESERVE BANK OF SAN FRANCISCO 10-205-WA/RB-HC 4-Nov
Crete Bancorporation, Inc. Crete, Illinois FEDERAL RESERVE BANK OF SAN FRANCISCO 10-212-WA/RB-HC 1-Nov
Fentura Financial, Inc. Fenton, Michigan FEDERAL RESERVE BANK OF CHICAGO 10-209-WA/RB-HC 4-Nov
First National Bank South Alma, Ga. OCC 2010-216 4-Oct
First Personal Financial Corp. Orland Park, Illinois FEDERAL RESERVE BANK OF CHICAGO 10-200-WA /RB-HC 1-Nov
Madison National Bank Merrick, New York OCC 2010-217 11-Jun
Orient Bancorporation, Bank of the Orient San Francisco, California FEDERAL RESERVE BANK OF SAN FRANCISCO 10-227-WA/RB-BHC, 10-227-WA/RB-SM 16-Nov
Progressive Growth Corp. Gaylord, Minnesota FEDERAL RESERVE BANK OF MINNEAPOLIS 10-192-WA/RB-HC 15-Nov
San Antonio National Bank Refugio, Texas OCC 2010-218 30-Sep
Valley Community Bancorp, Inc. St. Charles, Illinois FEDERAL RESERVE BANK OF CHICAGO 10-206-WA/RB-HC 1-Nov
Viking Financial Services Corporation Seattle, Washington FEDERAL RESERVE BANK OF SAN FRANCISCO 10-231-WA/RB-HC 19-Nov

Three capital directives were issued by the OCC.

Capital Directive
Employer Individual Location Regulator Order # Date
Canyon National Bank na Palm Springs, Calif. OCC 2010-204 13-Oct
First National Bank of Central FloridaWinter Park, Fla. na na OCC 2010-205 13-Oct
Integra Bank National Association na Evansville, Ind. OCC 2010-206 12-Aug

The FDIC, OCC and National Credit Union Administration banned 14 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 Individual Location Regulator Amount Order # Date
Branch Banking and Trust Company Marilyn R. Davis Winston-Salem, NC FDIC $0 Removal-Prohibition FDIC-10-370e 13-Oct
Central Credit Union Ira C. Rudin Rego Park, New York NCUA $175,000 Removal-Prohibition 10-0031-R1 22-Nov
Citizens Bank of Pennsylvania Kiesha L. Merrick Philadelphia, PA FDIC $0 Removal-Prohibition FDIC-10-381e 21-Oct
Citizens Bank of Pennsylvania Erlanda L. Naranjo Philadelphia, PA FDIC $0 Removal-Prohibition FDIC-10-628e 21-Oct
Eastern Bank Maria C. Faranda Boston, MA FDIC $0 Removal-Prohibition FDIC-10-704e 21-Oct
Farmers State Bank & Trust Company Steve J. Broussard Church Point, LA FDIC $0 Removal-Prohibition FDIC-10-202e 13-Oct
First National Bank, Torrington Scott R. Prusia Torrington, Wyoming OCC $0 Removal-Prohibition 2010-222 5-Oct
JPMorgan Chase Bank, National Association Victoria Toth Columbus, Ohio OCC $0 Removal-Prohibition 2010-221 9-Jul
Macon Bank and Trust Jill C. Troutt Lafayette, TN FDIC $0 Removal-Prohibition FDIC-09-354e 13-Oct
Moonlight Credit Union, Stanwood Area Federal Credit Union, and Vantage Trust Federal Credit Union Eugene Miley Worthington, New Stanton, and Wilkes-Barr Penn. NCUA $2,080,000 Removal-Prohibition 10-0032-R2 22-Nov
Naugatuck Savings Bank, (f/k/a Castle Bank & Trust Company) Robert A. Nixon Naugatuck, CT FDIC $0 Removal-Prohibition FDIC-10-595e 21-Oct
Old National Bank Robert E. Tolle Evansville, Ind. OCC $0 Removal-Prohibition 2010-219 21-Sep
Passumpsic Savings Bank Tina M. Desrochers St. Johnsbury, VT FDIC $0 Removal-Prohibition FDIC-10-742e 21-Oct
UMB Bank, National Association Daniel Garrett Kansas City, Missouri OCC $0 Removal-Prohibition 2010-220 9-Jul

Civil Money Penalties were issued against 23 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 Individual Location Regulator Order/Docket No. Amount Date
American Community Bank na Glen Cove, NY FDIC FDIC-10-741k $5,405 26-Oct
American Heritage Bank na Clovis, NM FDIC FDIC-10-638k $12,750 27-Oct
BankOrion na Orion, IL FDIC FDIC-10-503k $3,950 8-Oct
EvaBank na Eva, AL FDIC FDIC-10-363k $15,000 5-Oct
First Bank of Dalton na Dalton, GA FDIC FDIC-10-683k $5,500 25-Oct
First National Bank Scott R. Prusia Torrington, Wyoming OCC 2010-215 na 5-Oct
Integrity First Bank na Wausau, WI FDIC FDIC-10-525k $5,550 28-Oct
International Bank of Commerce na Laredo, TX FDIC FDIC-10-572k $10,000 27-Oct
Kalamazoo County State Bank na Schoolcraft, MI FDIC FDIC-10-487k $2,500 27-Oct
Kentucky Farmers Bank Corporation (f/k/a Kentucky-Farmers Bank of Catlettsburg, Kentucky) na Catlettsburg, KY FDIC FDIC-10-527k $2,650 27-Oct
Mountain 1st Bank & Trust Company na Hendersonville, NC FDIC FDIC-10-257k $10,395 28-Oct
New Millennium Bank na New Brunswick, NJ FDIC FDIC-10-712k $10,045 12-Oct
Riverhills Bank na New Richmond, OH FDIC FDIC-10-594k $2,100 19-Oct
Security Bank National Association Harold Connell North Lauderdale, Fla. OCC 2010-211 na 27-Oct
Sunshine State Community Bank na Port Orange, FL FDIC FDIC-10-600k $4,000 12-Oct
The Bank of Clovis na Clovis, NM FDIC FDIC-10-652k $18,825 21-Oct
The Farmers and Merchants Bank na Boswell, IN FDIC FDIC-10-664k $4,000 27-Oct
The Farmers and Merchants National Bank of Hatton Kenley Just Hatton, North Dakota OCC 2010-212 na 27-Oct
The Farmers and Merchants National Bank of Hatton Ray Kvalvog Hatton, North Dakota OCC 2010-213 na 25-Oct
The Farmers and Merchants National Bank of Hatton Fred Schlanser Hatton, North Dakota OCC 2010-214 na 27-Oct
The First State Bank na Huntsville, TX FDIC FDIC-10-573k $58,900 26-Oct
United-American Savings Bank na Pittsburgh, PA FDIC FDIC-10-556k $5,500 19-Oct
Valley Bank na Fort Lauderdale, FL FDIC FDIC-10-440k $22,000 1-Oct

Milwaukee, Wisc.-based Legacy Bank faced FDIC prompt corrective actions, while First Vietnamese American Bank of Westminster, Calif. had its supervisory prompt correction action amended. 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
First Vietnamese American Bank Westminster, CA FDIC FDIC-10-691PCAS 13-Oct
Legacy Bank Milwaukee, Wisconsin FEDERAL RESERVE BOARD 10-228-PCA-SM 16-Nov

Two actions were terminated by the OCC.

Terminations of Existing Enforcement Actions
Company Location Regulator Order/Docket No. Date
FA, Fidelity Bank of Florida, National Association Merritt Island, Fla. OCC EA# 2009-085 27-Oct
FA, The First National Bank of Trenton Trenton, Texas OCC EA# 2008-088 18-Oct

Four orders conditionally granting a waiver of Cross Guarantee Liability (No. FDIC-10-438kk, FDIC-10-433kk, FDIC-10-434kk, FDIC-10-435kk) were issued Oct. 26 by the FDIC pursuant to Section 5(e), 12 U.S.C. § 1815(e) for Southern Arizona Community Bank and three Colorado banks: Fort Collins Commerce Bank, Loveland Bank of Commerce and Larimer Bank of Commerce.

Cross Guarantee Liabilities
Company Location Regulator Order/Docket No. Date
Fort Collins Commerce Bank, Loveland Bank of Commerce, Larimer Bank of Commerce Fort Collins and Loveland, CO FDIC FDIC-10-433kk, FDIC-10-434kk, FDIC-10-435kk 26-Oct
Southern Arizona Community Bank Tucson, AZ FDIC FDIC-10-438kk 26-Oct

The FDIC issued orders to Ashish Aggarwal and Harshvardhan Kanda, granting them permission to file applications and approving application for consent to participate in the affair of any insured depository institution.

Order Granting Permission to File Application and Approving Application for Consent to Participate in the Affair of any insured Depository Institution
Individual Regulator Order/Docket No. Date
Ashish Aggarwal FDIC FDIC-10-669L 5-Oct
Harshvardhan Kanda FDIC FDIC-10-641L 5-Oct

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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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