The Federal Deposit Insurance Corp. on Aug. 30 released a list of enforcement actions taken against banks and individuals in July. One administrative hearing is scheduled for September.
The following list excludes actions previously covered by S&P Global Market Intelligence and those that do not meet criteria for news coverage. Click here to view our full database of enforcement actions against U.S. banks and thrifts.
Consent orders
On July 1, the FDIC issued a consent order against Spencer, W.Va.-based First Neighborhood Bank in connection with the bank's alleged unsafe or unsound banking practices, or violations of law or regulation related to weaknesses in its compliance with the Bank Secrecy Act.
Among other things, the regulator required First Neighborhood Bank to revise, adopt and implement within 60 days from the effective date of the order a written BSA compliance program designed to ensure and maintain full compliance with the BSA. Within 90 days from the order's effective date, the bank should contract for an independent testing program to test the bank's compliance with the BSA, anti-money laundering and Office of Foreign Assets Control rules and regulations.
The bank, which is a unit of West-Central Bancorp Inc., consented to the order without admitting or denying any charges.
--------------------------
The FDIC and the Oklahoma State Banking Department on July 1 issued a consent order against Fort Gibson State Bank in connection with the bank's alleged violations of law or regulation relating to the Bank Secrecy Act, the information technology program, internal controls and consumer compliance.
Among Fort Gibson State Bank's obligations under the consent order is that within 90 days after the order's effective date, it should have and retain qualified management with the ability to comply with the requirements of the order, operate the bank in a safe and sound manner, comply with applicable laws and regulations, and restore all aspects of the bank to a safe and sound condition.
The Fort Gibson Bancshares Inc. unit consented to the order without admitting or denying any charges.
--------------------------
On July 9, the FDIC and the Mississippi Department of Banking and Consumer Finance issued a consent order against Marks, Miss.-based Citizens Bank & Trust Co. over charges of unsafe or unsound banking practices or violations of laws or regulations relating to capital adequacy, asset quality, management, earnings, liquidity and sensitivity to market risks.
Among the requirements of the regulators is that within 90 days of the consent order, the bank should have and retain qualified management, which must include a CEO with demonstrated ability in managing a bank of comparable size and in effectively implementing lending, investment and operating policies in accordance with safe and sound banking practices. The bank's management must also include a COO with appropriate experience in managing a bank of similar size and complexity in accordance with sound banking practices, as well as a senior lending officer with an appropriate level of lending, collection and loan supervision experience for the type and quality of the bank's loan portfolio.
The CB&T Bancshares Inc. subsidiary consented to the order without admitting or denying any charges.
--------------------------
On July 25, the FDIC and the Rhode Island Division of Banking issued a corrected consent order against East Greenwich, R.I.-based Independence Bank in connection with the bank's allegedly unsafe or unsound banking practices or violations of law or regulation relating to a lack of oversight and risk management practices commensurate with the bank's business model and high risk profile.
Among other things, the regulators required the bank to have and retain qualified management with appropriate expertise and authority to carry out their responsibilities. Such management should include a CFO with demonstrated ability in all financial areas and one or more executives with proven ability in managing a bank of comparable size and complexity and a track record of managing Small Business Administration Small Loan Advantage loans or loans issued under comparable lending program.
The bank consented to the order without admitting or denying any charges.
The FDIC on July 18 ordered Marksville, La.-based Union Bank to pay a civil money penalty of $12,400, having determined that the bank engaged in a pattern or practice of violating certain sections of the Flood Disaster Protection Act of 1973 and the FDIC Rules and Regulations.
Union Bank, a unit of Union Bancshares Inc., consented to the civil money penalty without admitting or denying violations of law and regulation.
Notices issued
On July 19, the FDIC issued a notice of intention to prohibit from further participation; a notice of assessment of civil money penalty; findings of fact and conclusions of law; order to pay; and notice of hearing against Robert Calloway.
The FDIC determined that Calloway, who served as chief credit policy officer of New Orleans-based First NBC Bank for about one week prior to the bank's failure in 2017, participated or engaged in unsafe or unsound banking practices and breaches of his fiduciary duty. The regulator also determined that these unsafe or unsound practices and breaches of fiduciary duties caused the bank to suffer more than a minimal financial loss, and involved personal dishonesty and demonstrated willful or continuing disregard for the bank's safety or soundness.
If Calloway requests a hearing with respect to the charges alleged in the notice, the hearing will start 60 days from the date of receipt of the notice in New Orleans. The FDIC prays for relief in the form of issuance of a prohibition order against Calloway and an order to pay a civil money penalty of $125,000.
Termination of cease and desist/consent orders
The FDIC on July 3 terminated a consent order issued against Georgia-based Talbot State Bank, a unit of TSB Bancorp Inc.
The consent order was issued Sept. 26, 2012.
--------------------------
On July 30, the FDIC terminated a cease and desist order issued to Los Angeles-based Pan American Bank in March 2009.
Pan American Bank merged with Oakland, Calif.-based Beneficial State Bank in 2016. Beneficial State Bank is a unit of Beneficial State Bancorp Inc.
--------------------------
On July 31, the FDIC and the State of South Carolina Board of Financial Institutions terminated a consent order issued against Enterprise Bank of South Carolina in April 2013.
