FDIC issues enforcement actions against 2 banks

The Federal Deposit Insurance Corp. on Nov. 26 released a list of orders of administrative enforcement actions taken against banks and individuals in October. There are no administrative hearings scheduled for December.

The following list excludes actions that do not meet criteria for S&P Global Market Intelligence's news coverage. Click here to view our full database of enforcement actions against U.S. banks and thrifts.

Civil money penalty

The FDIC ordered England, Ark.-based Bank of England, a unit of Canada Bancshares Inc., to pay a civil money penalty of $129,800.

The FDIC determined that Bank of England violated Section 5 of the Federal Trade Commission Act when bank loan officers located in a Bloomfield, Mich., loan production office misrepresented to consumers the availability of certain Veterans Administration refinance loan terms. The FDIC determined the misrepresentations were deceptive, in violation of Section 5, according to the Oct. 5 order to pay civil money penalty.

The bank consented to the issuance of the order without admitting or denying the violations of law or regulation.

Consent order

The FDIC and the Texas Department of Banking issued a consent order against Amarillo, Texas-based Herring Bank, a subsidiary of Herring Bancorp Inc., that included directives regarding the bank's board and management oversight, capital, liquidity and dividend payouts.

The bank consented to the issuance of the order without admitting or denying any of the charges.

Under the Oct. 6 consent order, Herring Bank's board must develop a plan to strengthen itself by obtaining additional external directors such that the majority of the board will consist of external directors. Additionally, the board must increase its participation in bank affairs by assuming responsibility for the approval of the bank's policies and objectives and for the oversight of the bank's executive and senior management. The order also sets minimum capital and liquidity ratios and bans dividend payments without advance regulatory approval.

The order also requires, among other things, the amendment of the bank's code of ethics to include full disclosure to the board of any potential conflicts of interest before any transactions are conducted with insiders, family members, affiliates of insiders or shareholders. The order further directs the bank to issue no new loans to insiders and prepare a plan to reduce the number of outstanding adversely classified loans to insiders.