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Banks Face Growing Regulatory Actions

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Banks Face Growing Regulatory Actions

DALLAS — (Sept. 8, 2009) /PRNewswire/ Regulatory orders against financial institutions jumped 49% during the second quarter, according to an analysis of activity by A surge in civil money penalties, cease-and-desist orders and prohibition orders fueled the increase.

U.S. institutions, their employees and former employees faced 263 regulatory actions during the second quarter, based on coverage at Activity included orders issued by the FDIC, Federal Reserve, National Credit Union Administration, OCC and OTS.

Actions jumped 49% from the first quarter. The majority of orders were issued by the FDIC.

Q2 2009 Q1 2009
263 actions 177 actions

Bank failures are often preceded by cease-and-desist orders. During the latest period, such orders jumped one-third to 86.

Financial institutions entered 64 formal agreements, up 39% from the first quarter. Written and formal agreements often require conservation of capital and improvement in operations. In some cases, experienced executives must be appointed to senior lending positions. The fed and the OCC were each responsible for around half of second-quarter agreements.

Regulators issued 60 civil money penalties in the second quarter, climbing from 33. Including restitution and settlements, the latest period included $43.8 million in civil money penalties. The FDIC issued 90 percent of the penalties.

“Despite signs that delinquency might be near a peak, the number of regulatory orders has consistently risen during the past four quarters — suggesting an increase in upcoming bank failures,” said Founder and Publisher Sam Garcia. “So far, nearly two dozen of the banks listed in the second-quarter report have failed.”

Type of Order #
Agreement 64
Cease-and-Desist 86
Civil Money Penalty 60
Prohibition 15
Prompt Corrective Action 10
Removal-and-Prohibition 24

The FDIC was responsible for 151 of second-quarter orders, with nearly half being cease-and-desist. The OCC issued 56 orders, and the fed handed out 38.

Regulator #
Federal Deposit Insurance Corporation 151
Federal Reserve 38
National Credit Union Administration 12
Office of the Comptroller of the Currency 56
Office of Thrift Supervision 6

The full Q2 report is available to subscribers at:

Complete regulatory news is available at:

Founded in 1998, provides online mortgage news and analysis for the mortgage industry. Around 1 million news pages are viewed monthly at and its affiliate publications.

Sam Garcia
3811-700 Turtle Creek Blvd.
Dallas, TX 75219


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