Regulatory Actions Double

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U.S. Financial Institutions faced more than twice as many regulatory actions last year than in 2008, according to the Fourth-Quarter 2009 Regulatory Actions report from The latest list of troubled institutions suggests bank failures might increase before they slow.

In 2009, approximately 1,311 regulatory orders were issued against banks, credit unions and thrifts. The activity reflects actions by the Federal Deposit Insurance Corporation, Federal Reserve, National Credit Union Administration, Office of the Comptroller of the Currency and Office of Thrift Supervision.

The number of actions last year more than doubled from only 587 orders and actions in 2008.

During just the fourth quarter, 412 actions were tracked, higher than the prior quarter and more than twice as many as in the same period in 2008. Fourth-quarter-2009 activity was higher than during any quarter since began tracking regulatory actions in 2008.

Actions by Quarter

Q4 2009 Q3 2009 Q4-2008
412 *340 *189


full 4th quarter listings

More than 160 cease-and-desist orders were issued during the latest quarter, the most of any order type and nearly two-thirds more than were issued in the third quarter. Banks that fail often face cease-and-desist orders prior to their demise.

“The growth in cease-and-desist orders is most troubling and suggests that the pace of bank failures is likely to pick up,” said Publisher Sam Garcia. “We’ve also seen an uptick in the number of people being banned from banking.”

The number of prompt corrective actions and removal-and-prohibition orders doubled from the previous quarter. Written and formal agreements — which often require changes in operations, policies and management — jumped past 80.

Type of Order Q4 2009
Agreement (written and formal) 86
Capital Directive 2
Cease-and-Desist 162
Civil Money Penalty 52
Prompt Corrective Action 20
Removal-and-Prohibition 63
Termination of Insurance 1
Other 26
Total 412

full table by order type

The FDIC was the busiest among federal regulators, taking nearly 200 actions during the most recent period. FDIC activity was up more than a fifth from the previous period, while OCC actions were up a quarter and OTS orders rose 16 percent.

Regulator Q4 2009
FDIC 194
Federal Reserve 58
OCC 69
OTS 78

full table by regulator


Mortgage Daily Staff


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