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Bank Orders Ease in Q3

Financial institutions saw regulatory orders and actions by federal banking regulators ease for the first time in at least four quarters, according to the Third-Quarter 2009 Regulatory Actions report from But more cease-and-desist orders were issued.

The report reflects orders and other actions against federally insured institutions by the Federal Deposit Insurance Corporation, the Federal Reserve, the National Credit Union Administration, the Office of the Comptroller of the Currency and the Office of Thrift Supervision.

During the third quarter, 257 actions were tracked, decreasing from 263 in the second quarter. began tallying the quarterly totals in the third-quarter 2008, when 111 actions were tracked — and this was the first quarterly decline during that period.

Actions by Quarter

Q3 2009 Q2 2009 Q3-2008
257 263 111

full 3rd quarter listings

“While the data indicate we’ll continue to see an elevated level of bank failures — with this year’s pace at more than 50 per quarter — it also suggests that the rate of bank failures might be near or past the peak,” said Founder and Publisher Sam Garcia. “One big caveat, however, is residential delinquency that is expected to continue rising until at least summer. The outlook for commercial mortgage defaults is even more bleak.”

Despite the quarterly decline in overall orders, cease-and-desist orders climbed to 98 from the second quarter’s 86. Bank failures are often preceded by cease-and-desist orders.

Also higher were the number of formal agreements, rising to 67 from 64, and removal-and-prohibition orders, which climbed to 31 from 24.

Banks, however, faced fewer civil money penalties.

Type of Order Q3 2009
Agreement (written and formal) 67
Capital Directive 1
Cease-and-Desist 98
Civil Money Penalty 49
Prompt Corrective Action 10
Removal-and-Prohibition 31
Termination of Insurance 1
Total 257

full table by order type

Actions by the FDIC drove the third-quarter decline, falling to 143 from the prior quarter’s 151. Still, FDIC activity was well above 67 actions tracked a year earlier.

OCC activity also eased from the second quarter, but Fed actions were up by half.

Regulator Q3 2009
Federal Deposit Insurance Corporation 143
Federal Reserve 58
Office of the Comptroller of the Currency 55
Office of Thrift Supervision 1

full table by regulator

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