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| A former banker has been banned by the Office of the Comptroller of the Currency from the banking business because of “severe” sexual harassment. As the head of the bank insurance fund discussed options for overseeing institutions deemed too big to fail, more than 50 small institutions faced regulatory actions — including a number of final warnings.Federal Deposit Insurance Corporation Chairman Sheila Bair testified Wednesday before the Committee on Banking, Housing and Urban Affairs, U.S. Senate. She said big gaps have existed in regulating institutions that posed significant systemic risk. She suggested the creation of a systemic risk council that includes the U.S. Department of the Treasury, the FDIC, the Federal Reserve Board and the Securities and Exchange Commission.
Bair said regulators must have the authority to quickly dissolve entities that are deemed too big to fail. False investor security that the U.S. government wouldn’t let Lehman Brothers fail led to the collapse of the commercial paper market. Last week, Bair told the Economic Club of New York said the FDIC’s resolution authority needs to be extended from banks to bank-holding companies — which are generally integral parts of the banks that FDIC is attempting resolve. The conglomerates are currently forced to utilize the messy bankruptcy system when they fail — a process that can harm the financial system. “What’s needed is a new way to unwind these big institutions,” she said. One way would be separating the failed entities into a “good bank” — or a bridge bank — and “bad bank.” Stockholders and unsecured creditors would suffer the losses, while other systematically risky firms would fund some of the losses though assessments. OCC announced last month a consent order with William W. Anderson Jr., a former executive with The First National Bank of Pontotoc in Pontotoc, Miss. Anderson is permanently banned from being involved with any federally insured depository institution. OCC said Anderson “discriminated against female applicants for credit, female borrowers and female account holders by subjecting them to severe and pervasive sexual harassment in connection with real estate-related transactions and other credit transactions.” His case was the first prohibition order based on violations of the Fair Housing Act and the Equal Credit Opportunity Act. The National Credit Union Administration Board issued orders banning the following individuals from participating in the affairs of any federally insured financial institution.
The Federal Reserve Board announced that written agreements have been executed with the following companies. In general, the companies are required to conserve capital, improve operations and report back on their progress. In some cases, management must be replaced.
On April 28, the fed terminated a March 20, 2007, cease-and-desist order against Cache Valley Banking Co. and Cache Valley Bank in Logan, Utah, a press release yesterday said. The FDIC announced last week cease-and-desist orders against the following institutions. Such orders often precede the seizure of federally insured banks.
The FDIC issued the following civil money penalties.
Removal-and-prohibition orders were issued by the FDIC against Peoples Independent Bank in Boaz, Ala., and First Bank in West Des Moines, Iowa. Meanwhile, a final order was issued granting Gaby Cucu permission to apply to participate in the affairs of an insured depository institution, and orders terminating cease-and-desist orders were issued for Great Florida Bank in Miami; Cleveland Community Bank, S.S.B., Cleveland, Miss.; and Sherman County Bank in Loup City, Neb. The New York Stock Exchange notified Flagstar Bancorp Inc. that it was again in compliance with the continued listing requirement that its average closing share price was at least $1 over a consecutive 30-trading-day period. The Troy, Mich.-based institution first fell out of compliance in December 2008. Shares of Flagstar are currently trading above $2. MGIC Investment Corp. warned in its first-quarter earnings report that its shares could be delisted from the NYSE, which — in addition to a $1 minimum share price — requires a minimum average market capitalization of $25 million. MGIC shares trade near $5, while its market capitalization stands at $597 million. In the Matter of: William W. Anderson, Jr. Former Vice President and Branch Manager The First National Bank of Pontotoc Pontotoc, Mississippi. Peoples Independent Bank, Boaz, Ala., against Timothy Sims. First Bank, West Des Moines, Iowa, against Belma A. Bejtovic. Gaby Cucu Final Order Great Florida Bank Terminating Order. Cleveland Community Bank, S.S.B., Terminating Order. Sherman County Bank Terminating Order. |
