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FDIC Enforcement Decisions and Orders

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{{4-30-91 p.C-543}}
   [10,114] In the Matter of The Merchants Bank And Trust Company, Norwalk, Connecticut, Docket No. FDIC-90-187b (9-14-90).

   Bank to cease and desist from such practices as operating with excessive volume of adversely classified assets; engaging in hazardous lending and lax collection practices; operating with inadequate equity capital and reserves; engaging in violations of applicable laws and regulations; operating with management whose policies and practices are detrimental to the Bank and
{{4-30-91 p.C-544}}deficient or inadequate loan documentation; engaging in practices which produce inadequate operating income and excessive loan losses; failing to provide adequate supervision and direction over the affairs of the Bank; paying excessive cash dividends; operating with inadequate reserve for loan and lease losses. (This order was terminated by order of the FDIC, dated 2-5-91; see ¶15,227.)

   [.1] Management—Qualification—Compliance
   [.2] Management Plan—Minimum Requirements—Review
   [.3] Definition—"Independent With Respect To The Bank"
   [.4] Assets—Adversely Classified—Reduce
   [.5] Primary Capital—Increase—Methods
   [.6] Capital Structure—Plan—Approval
   [.7] Assets—Adversely Classified—Reduce/Eliminate
   [.8] Loans—Risk Position—Adversely Classified Assets—Plan to Reduce
   [.9] Loans—Extensions of Credit—Existing Borrowers—Curtail
   [.10] Loans—Interest Accrual—Overdue
   [.11] Loan Policy—Revise—Approval
   [.12] Profit Plan—Minimum Requirements—Review
   [.13] Funds Management Policy—Minimum Requirements—Review
   [.14] Dividends—Restricted
   [.15] Technical Exceptions—Correct and/or Eliminate
   [.16] Concentration of Credit—Reduce
   [.17] Loan Deficiencies—Special Mention
   [.18] Violations of Law or Regulations—Correct and/or Eliminate
   [.19] Compliance—Progress Reports—Frequency
   [.20] Affiliated Organization—Payments—Restricted
   [.21] Compliance Program—Written Program—Improve

In the Matter of

THE MERCHANTS BANK AND
TRUST COMPANY

NORWALK, CONNECTICUT (Insured State Nonmember Bank)
ORDER TO CEASE AND DESIST
FDIC-90-187b

   The Merchants Bank and Trust Company, Norwalk, Connecticut ("Bank"), having been advised of its right to a Notice of Charges and of Hearing detailing the unsafe or unsound banking practices and violations of law and/or regulations alleged to have been committed by the Bank and of its right to a hearing on such alleged charges under section 8(b)(1) of the Federal Deposit Insurance Act, 12 U.S.C. § 1818(b)(1), and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF AN ORDER TO CEASE AND DESIST ("CONSENT AGREEMENT") with counsel for the Federal Deposit Insurance Corporation ("FDIC"), dated September 13, 1990, whereby solely for the purpose of this proceeding and without admitting or denying any unsafe or unsound banking practices or violations of law and/or regulations, the Bank consented to the issuance of an ORDER TO CEASE AND DESIST ("ORDER") by the FDIC.
   The FDIC considered the matter and determined that it had reason to believe that the Bank had engaged in unsafe or unsound banking practices and had violated laws and/ or regulations. The FDIC, therefore, accepted the CONSENT AGREEMENT and issued the following:

ORDER TO CEASE AND DESIST

   IT IS HEREBY ORDERED, that the Bank, its directors, officers, employees, agents, successors, assigns, and other persons participating in the conduct of the affairs of the Bank, cease and desist from the following unsafe or unsound banking practices and violations of law and/or regulations:

       (a) operating with an excessive volume of adversely classified assets;
{{12-31-90 p.C-545}}
       (b) engaging in hazardous lending and lax collection practices, including maintaining an excessive volume of adversely classified loans;
       (c) operating without adequate equity capital and reserves for the kind and quality of assets held;
       (d) engaging in violations of applicable laws and regulations;
       (e) operating with management whose policies and practices are detrimental to the Bank;
       (f) operating with deficient or inadequate loan documentation, including but not limited to current financial statements, insurance coverage, title documentation, borrowing authorizations and cash flow and/or operating information;
       (g) engaging in practices which produce inadequate operating income and excessive loan losses;
       (h) failing to provide adequate supervision and direction over the affairs of the Bank to prevent unsafe or unsound practices and violations of law and/or regulations;
       (i) paying excessive cash dividends in relation to the Bank's net income and/or capital position;
       (j) operating with an inadequate reserve for loan and lease losses for the volume, kind and quality of loans held; and
       (k) engaging in violations of applicable laws and regulations: specifically, Connecticut General Statutes, Title 36 Chapter 640, section 36-70, subsection (a) and Part 325.3(b) and Part 215.4(b)(1) of the FDIC's Rules and Regulations;
   IT IS FURTHER ORDERED, that the Bank, its directors, officers, employees, agents, successors, assigns, and other persons participating in the conduct of the affairs of the Bank, take affirmative action as follows:

   [.1] 1. (a) Within ninety (90) days from the effective date of this ORDER, the Bank shall have, and thereafter continue to retain, management acceptable to the Regional Director of the FDIC's Boston Regional Office ("Regional Director") and the Banking Commissioner of the State of Connecticut ("Commissioner"). The acceptability of management shall be assessed on its conduct with respect to: (i) compliance with the requirements of this ORDER, (ii) operation of the Bank in a safe and sound manner, (iii) compliance with applicable laws and regulations, and (iv) maintenance of all aspects of the Bank in a safe and sound condition, including asset quality, capital adequacy, earnings, management effectiveness and liquidity. As used in this paragraph, "maintenance" includes improvement in quality if necessary to comply with this requirement.

   [.2] (b) In order to have acceptable management, within thirty (30) days from the effective date of this ORDER, the Board of Directors shall develop a written analysis and assessment of the Bank's management and staffing needs ("management plan"), which shall include, at a minimum:

       (i) identification of both the type and number of officer positions needed to manage and supervise properly the affairs of the Bank;
       (ii) identification and establishment of such Bank committees as are needed to provide guidance and oversight to active management;
       (iii) evaluation of each Bank officer serving in a capacity of Senior Vice President or above, or any other officer serving in a comparable capacity, to determine whether these individuals possess the ability, experience and other qualifications required to perform present and anticipated duties, including adherence to the Bank's established policies and practices, and maintenance of the Bank in a safe and sound condition; and
       (iv) a plan of action to recruit and hire any additional or replacement personnel with the requisite ability, experience and other qualifications, which the Board of Directors determines are necessary to fill Bank officer or staff member positions consistent with the Board's analysis, evaluation and assessment as provided in paragraphs 1(b)(i) and 1 (b)(iii) of this ORDER.
   (c) The written management plan shall be submitted to the Regional Director and the Commissioner for review and comment. Within fifty (50) days after such submission, and after consideration {{12-31-90 p.C-546}}of any responsive comments received from the Regional Director and/or the Commissioner within thirty (30) days from their receipt of such submission, the Board of Directors shall approve the written management plan, taking into consideration any regulatory comments, and such approval shall be recorded in the minutes of the Board of Directors. Subsequent modifications to the written management plan may be made only after giving the Regional Director and the Commissioner written notice of the proposed modification, and after consideration of any responsive comments submitted by the Regional Director and/or the Commissioner within thirty (30) days from their receipt of the notice of proposed modification. The Board of Directors shall approve any such subsequent modification which approval shall be recorded in the minutes of the Board of Directors. The Bank, its directors, officers and employees shall implement and follow the written management plan and/or any subsequent modification thereto.
   (d) (i) The written management plan shall also include the requirement that the Board of Directors of the Bank, or a committee thereof consisting of not less than a majority of Board members who are independent with respect to the Bank, provide supervision over lending, investment and operating policies of the Bank sufficient to ensure that the Bank complies with the provisions of this ORDER.
       (ii) At the next meeting of the shareholders of the Bank, and at each succeeding meeting of the shareholders at which Bank directors are to be elected, the members of the Board of Directors who are also shareholders shall nominate and support the election of candidates to the Board of Directors who are independent with respect to the Bank, in such number as is necessary to cause a majority of the Board of Directors to be and to remain independent with respect to the Bank.

   [.3] (iii) For purposes of this ORDER, an individual who is "independent with respect to the Bank" shall be any individual (1) who is not an officer of the Bank or any of its affiliated organizations and who does not own more than five (5.0) percent of the outstanding shares of the Bank, (2) who is not related by blood, marriage or common financial interest to an officer of the Bank or to any stockholder owning more than five (5.0) percent of the Bank's outstanding shares, and (3) who is not indebted to the Bank, directly or indirectly (including the indebtedness of any entity in which the individual has a substantial financial interest), in an amount exceeding five (5.0) percent of the Bank's total equity capital and allowance for loan and lease losses.
       (e) The Bank's Board of Directors shall meet at least monthly. The Board shall prepare in advance and shall follow a detailed written agenda at each meeting, which shall include consideration of actions of any committees. Nothing in the foregoing sentence shall preclude the Board from considering matters other than those contained in the agenda. Detailed written minutes of all Board meetings shall be maintained and recorded on a timely basis.

   [.4] 2. Within ten (10) days from the effective date of this ORDER, the Bank: (1) shall eliminate from its books, by charge-off, collection, or other proper entries, all assets or portions of assets classified "Loss" in the joint State/FDIC Report of Examination of the Bank as of January 26, 1990; and (2) shall either (A) eliminate from its books by charge-off, collection, or other proper entries, or (B) if the asset is an extension of credit or lease, increase its allowance for loan and lease losses by an amount equal to, fifty (50.0) percent of those assets or portions of assets classified "Doubtful" in the joint State/FDIC Report of Examination of the Bank as of January 26, 1990, which have not been previously collected, charged off, or otherwise eliminated by other proper entries. Reduction of these assets through use of proceeds of loans made by the Bank does not constitute "collection" or "elimination" for the purpose of this paragraph.

   [.5] 3. (a) Within one-hundred-eighty (180) days from the effective date of this ORDER, the Bank shall increase its primary capital by not less than $1,710,000. Such increase in capital may be accomplished by:

       (i) the sale of new offerings of common stock or perpetual preferred stock;
       (ii) the sale or transfer of existing shares by the Bank's shareholders to individuals who will contribute the re- {{12-31-90 p.C-547}}quired increase in equity capital to the Bank;
       (iii) the direct contribution of cash by the shareholders and/or directors of the Bank;
       (iv) the collection of all or part of assets classified: (A) "Loss" in the joint State/FDIC Report of Examination of the Bank as of January 26, 1990 without loss or liability to the Bank, or (B) "Doubtful" in the joint State/FDIC Report of Examination of the Bank as of January 26, 1990, without loss or liability to the Bank, provided any collection on such assets shall first be applied to that portion of the asset which was not charged off pursuant to paragraph 2 of this ORDER. Reductions to loans and leases classified "Loss" and "Doubtful" shall first be credited to the Bank's allowance for loan and lease losses ("allowance") and, if the Board of Directors' review of the adequacy of the allowance required by paragraph 4 of this ORDER indicates that such allowance has a balance in excess of that required for adequacy, any such excess may be transferred to equity capital through a negative provision for loan and lease losses;
       (v) the collection in cash of assets previously charged off;
       (vi) any combination of the above means; or
       (vii) any other means acceptable to the Regional Director and the Commissioner.
   (b) If all or part of the increase in capital required by the Bank under paragraph 3(a) of this ORDER involves an offering, other than an offering deemed not to be a public securities offering pursuant to 17 C.F.R. § 230.506 or as hereafter amended, of the Bank's securities (including a distribution limited only to the Bank's existing shareholders), the Bank shall prepare detailed offering materials fully describing the securities being offered, including an accurate description of the financial condition of the Bank and of this ORDER as well as the circumstances giving rise to the offering, and any other material disclosures necessary to comply with the Federal securities laws. Prior to the sale of the securities, and, in any event not less than twenty (20) days prior to the dissemination of such materials, the materials used in the sale of the securities shall be submitted to the FDIC, Registration and Disclosure Section, Washington, D. C. 20429, for review. Any changes requested to be made in the materials by the FDIC shall be made prior to their dissemination.
   (c) In complying with the provisions of paragraph 3(b) of this ORDER, the Bank shall provide to any subscriber and/or purchaser of Bank stock, written notice of any planned or existing development or other change which is materially different from the information reflected in any offering materials used in connection with the sale of Bank securities. The written notice required by this paragraph 3(c) shall be furnished within ten (10) calendar days from the date such material development or change was planned or occurred, whichever is earlier, to every purchaser and/or subscriber of Bank stock who received or was tendered the information contained in the Bank's original offering materials.

   [.6] (d) Within sixty (60) days from the effective date of this ORDER, the Bank shall develop a Capital Plan which will be submitted to the Regional Director and Commissioner for approval. The Capital Plan should address both internal and external sources of capital augmentation, including capital infusions, retention of earnings, restriction of asset growth, and asset sales to produce a ratio of total capital to total assets of at least eight (8.0) percent, with stated timetables in which to attain this goal. For purposes of this ORDER, the terms "total capital" and "total assets" are as defined in Part 325 of the FDIC's Rules and Regulations. (e) The Bank's Board of Directors shall maintain in its minutes a written record of all actions taken by the Bank to comply with the capital requirements of paragraphs 3(a) through 3(d) of this ORDER, including, at a minimum, any action to increase its capital by each of the methods specified in paragraphs 3(a)(i) through 3(a)(vii) of this ORDER.

   [.7] 4. (a) Within ten (10) days from the effective date of this ORDER, the Bank shall provide a minimum reserve of $11,200,000 for (i) the remaining adversely {{12-31-90 p.C-548}}classified and special mention assets identified in the joint State/FDIC Report of Examination of the Bank as of January 26, 1990 and (ii) any additional adversely classified and special mention assets identified by the Bank as of June 30, 1990, that have not been eliminated by charge-off, collection, or other proper entries. Reduction of these assets through the use of proceeds of loans made by the Bank does not constitute "collection" or "elimination" for the purpose of this paragraph.

       (b) The Bank shall maintain an allowance for loan and lease losses in accordance with the prevailing requirements of the Instructions for the Reports of Condition and Income ("Instructions").
       (c) Reports of Condition and Income required to be submitted by the Bank as of each Report date, as that term is used in the Instructions, between and including December 31, 1989, and the effective date of this ORDER, shall, at a minimum, reflect an allowance for loan and lease losses that should have been maintained in accordance with the Instructions. If necessary to comply with this paragraph 4(c), the Bank shall file amended Reports of Condition and Income within ten (10) days from the effective date of this ORDER.
       (d) Prior to the submission of any Report of Condition or Report of Income required to be filed by the Bank after the effective date of this ORDER, the Board of Directors of the Bank shall: (1) review the adequacy of the Bank's allowance for loan and lease losses, (2) provide for an adequate allowance, and (3) accurately report the allowance in any such Report of Condition and Income. The minutes of the Board meeting at which such review is undertaken shall indicate the results of the review, including any increases in the allowance, and the basis for determining the amount of allowance provided.

   [.8] 5. (a) Within thirty (30) days from the effective date of this ORDER, the Board of Directors shall develop a written plan of action to lessen the Bank's risk position in each asset aggregating $1,000,000 or more which was classified "Substandard" or "Doubtful" or listed for "Special Mention" in the joint State/FDIC Report of Examination of the Bank as of January 26, 1990. In developing such plan, the Bank shall, at a minimum;
       (i) review the financial position of each such borrower, or other real estate parcel (including in substance foreclosure), including source of repayment, repayment ability, and alternative repayment sources; and
       (ii) evaluate the available collateral for each such asset, including possible actions to improve the Bank's collateral position.
   Based upon such review and evaluation, the written plan of action shall: (A) establish target dollar levels to which the Bank shall reduce the aggregate dollar volume of "Substandard," "Doubtful" or "Special Mention" within six (6) and twelve (12) months from the effective date of this ORDER: and (B) provide for the submission of written monthly progress reports to the Bank's Board of Directors for review and notation in the Board minutes. Exhibit A provides a sample format for the progress report. As used in this paragraph 5, "reduce" means to (1) collect, (2) charge off, or (3) improve the quality of such assets so as to warrant removal of any adverse classification by the FDIC and the State of Connecticut Department of Banking. Payment of Loans with the proceeds of other loans made by the Bank does not constitute "reduction" or "collection" for purposes of this ORDER.
       (b) The written plan of action described by paragraph 5(a) shall be submitted to the Regional Director and the Commissioner for review and comment. Within fifty (50) days after such submission, and after consideration of any responsive comments received from the Regional Director and/or the Commissioner within thirty (30) days from their receipt of such submission, the Board of Directors shall approve the written plan of action, taking into consideration any regulatory comments, and such approval shall be recorded in the minutes of the Board of Directors. Subsequent modifications to the written plan of action may be made only after giving the Regional Director and the Commissioner written notice of the proposed modification, and after consideration of any responsive comments submitted by the Regional Director and/or the Commissioner within thirty (30) days from their receipt of the {{12-31-90 p.C-549}}notice of proposed modification. The Board of Directors shall approve any such subsequent modification which approval shall be recorded in the minutes of the Board of Directors. The Bank, its directors, officers and employees shall follow the written plan of action and/or any subsequent modification thereto.

   [.9] 6. The Bank shall not extend, directly or indirectly, credit to, or for the benefit of, any borrower who has a loan or other extension of credit with the Bank that has been charged off on or after January 1, 1988, or classified in the joint State/FDIC Report of Examination of the Bank as of January 26, 1990, in whole or in part, "Loss," "Doubtful," or "Substandard," and is uncollect, unless a majority of the Bank's Board of Directors first (1) determines that such advance is in the best interest of the Bank, (2) determines that the Bank has satisfied the requirements set out in paragraph 5 of this ORDER as to such borrower, and (3) approves such advance. A written record of the Board of Directors' determination and approval of any advance under the terms of this paragraph 6 shall be maintained in the credit file of the affected borrower(s) as well as the minutes of the Board of Directors. The requirements of this paragraph 6 do not prohibit the Bank from renewing any credit already extended to a borrower.

   [.10] 7. The Bank shall not accrue interest on any loan that is, or becomes, ninety (90) days or more delinquent as to principal or interest, unless the loan is both well secured and in the process of collection. For purposes of this paragraph 7, "well secured" and "in the process of collection" shall have the same meaning as those terms have in the prevailing Instructions for the Reports of Condition and Income. The Bank shall reverse on its books all previously accrued but uncollect interest on any loan that has ceased to accrue interest pursuant to this provision.

   [.11] 8. Within ten (10) days from the effective date of this ORDER, the Bank shall revise its written loan policies, taking into account the recommendations made in the joint State/FDIC Report of Examination of the Bank as of January 26, 1990. The revised written loan policies shall be submitted to the Regional Director and the Commissioner for review and comment. Within twenty-one (21) days after such submission, and after consideration of any responsive comments received from the Regional Director and/or the Commissioner within ten (10) days from their receipt of such submission, the Board of Directors shall approve the revised written loan policies, taking into consideration any regulatory comments, and such approval shall be recorded in the minutes of the Board of Directors. Subsequent modifications to the revised written loan policies may be made only after giving the Regional Director and the Commissioner written notice of the proposed modification, and after consideration of any responsive comments submitted by the Regional Director and/or the Commissioner within thirty (30) days from their receipt of the notice of proposed modification. The Board of Directors shall approve any such subsequent modification which approval shall be recorded in the minutes of the Board of Directors. The Bank, its directors, officers and employees shall follow the revised written loan policies and/or any subsequent modification thereto.

   [.12] 9. (a) Within thirty (30) days from the effective date of this ORDER, the Bank shall develop a written profit plan consisting of goals and strategies for improving the earnings of the Bank, which written profit plan shall include, at a minimum:

       (i) identification of the major areas in, and means by, which the Board of Directors will seek to improve the Bank's operating performance;
       (ii) realistic and comprehensive budgets;
       (iii) a budget review process to monitor the income and expenses of the Bank to compare actual figures with budgetary projections; and
       (iv) a description of the operating assumptions that form the basis for, and adequately support, major projected income and expense components.
   (b) The written profit plan shall be submitted to the Regional Director and the Commissioner for review and comment. Within fifty (50) days after such submission, and after consideration of any responsive comments received from the Regional Director and/or the Commissioner within thirty (30) days from {{12-31-90 p.C-550}}their receipt of such submission, the Board of Directors shall approve the written profit plan, taking into consideration any regulatory comments, and such approval shall be recorded in the minutes of the Board of Directors. Subsequent modifications to the written profit plan may be made only after giving the Regional Director and the Commissioner written notice of the proposed modification, and after consideration of any responsive comments submitted by the Regional Director and/or the Commissioner within thirty (30) days from their receipt of the notice of proposed modification. The Board of Directors shall approve any such subsequent modification which approval shall be recorded in the minutes of the Board of Directors. The Bank, its directors, officers, and employees shall follow the written profit plan and/or any subsequent modification thereto.

   [.13] 10. (a) Within thirty (30) days from the effective date of this ORDER, the Bank shall develop a written funds management policy which shall include, at a minimum:

       (i) the Bank's liquidity needs and plans for insuring that such needs are met on an ongoing basis;
       (ii) goals and strategies for managing and/or improving the Bank's interest rate risk exposure;
       (iii) monitoring of the interest rate sensitivity of present investments and deposits and projections of the types of investments and deposits to improve such liquidity position; and
       (iv) coordination of the Bank's loan, investment, operating, and budget and profit planning policies with the written funds management policy.
   (b) The written funds management policy shall be submitted to the Regional Director and the Commissioner for review and comment. Within fifty (50) days after such submission, and after consideration of any responsive comments received from the Regional Director and/or the Commissioner within thirty (30) days from their receipt of such submission, the Board of Directors shall approve the written funds management policy, taking into consideration any regulatory comments, and such approval shall be recorded in the minutes of the Board of Directors. Subsequent modifications to the written funds management policy may be made only after giving the Regional Director and the Commissioner written notice of the proposed modification, and after consideration of any responsive comments submitted by the Regional Director and/or the Commissioner within thirty (30) days from their receipt of the notice of proposed modification. The Board of Directors shall approve any such subsequent modification which approval shall be recorded in the minutes of the Board of Directors. The Bank, its directors, officers and employees shall follow the written funds management policy and/or any subsequent modification thereto.

   [.14] 11. The Bank shall not pay or declare any cash dividends without the prior written consent of the Regional Director and the Commissioner.

   [.15] 12. (a) Within sixty (60) days from the effective date of this ORDER, the Bank shall make all reasonable efforts to correct the technical exceptions on loans identified in the joint State/FDIC Report of Examination of the Bank as of January 26, 1990.

   [.16] (b) Within sixty (60) days from the effective date of this ORDER, the Bank shall formulate and implement a plan to reduce all concentrations of credit identified in the joint State/FDIC Report of Examination of the Bank as of January 26, 1990 and provide a copy of said plan to the Regional Director and Commissioner. This subparagraph 12(b) shall not apply to any of the Bank's correspondent bank relationships.

   [.17] (c) Within sixty (60) days from the effective date of this ORDER, the Bank shall make all reasonable efforts to correct the cited deficiencies in the loans listed for "Special Mention" identified in the joint State/FDIC Report of Examination of the Bank as of January 26, 1990.

   [.18] Except as otherwise provided herein, within sixty (60) days from the effective date of this ORDER, the Bank shall eliminate and/or correct all violations of law and regulations committed by the Bank identified in the joint State/FDIC Report of Examination of the Bank as of January 26, 1990.

   [.19] 14. Within thirty (30) days from the effective date of this ORDER, and, thereafter, within thirty (30) days from the end of each calendar quarter, the Bank shall furnish written progress reports to the Re- {{5-31-92 p.C-551}}gional Director and the Commissioner detailing the form and manner of any action taken to secure compliance with this ORDER and the results thereof. In addition, the Bank shall furnish such reports on request of either the Regional Director or the Commissioner. All progress reports and other written responses to this ORDER shall be reviewed by the Board of Directors of the Bank and made a part of the minutes of the Board meeting.

   [.20] 15. As of the effective date of this ORDER, the Bank shall not make any payments to, or for the benefit of, any affiliated organization, except ordinary business expenses incurred by the Bank for goods and services provided to the Bank by the affiliated organization, without the prior written consent of the Regional Director and the Commissioner.

   [.21] 16. (a) The Board of Directors shall, within sixty (60) days from the effective date of this ORDER, take the following actions to improve the Bank's compliance program:

       (i) Implement and formally adopt a written compliance program, that at a minimum, provides for training of personnel in all bank functions related to compliance and effective operating and review procedures.
       (ii) Ensure that the compliance officer receives necessary training as soon as possible. The compliance officer shall be responsible for training and supervising all affected personnel in compliance related matters and shall be given necessary authority to implement appropriate compliance procedures. The compliance officer shall also be given sufficient time and resources to carry out his/her duties.
       (iii) Institute a review procedure whereby loan disclosure statements. Fair Housing log-sheets, loan documents, and initial disclosure statements are reviewed by a knowledgeable individual, other than the preparer, prior to their issuance or completion.
       (iv) Approve the Bank Secrecy Act Program mandated by Section 326.8 of the FDIC's Rules and Regulations, 12 C.F.R. § 326.8, and promptly correct all violations of the Department of Treasury's financial recordkeeping regulation, including filing Currency Transaction Reports (Form 4789) for all past and present transactions which require such a report.
       (b) Within sixty (60) days from the effective date of this ORDER, the Board of Directors shall take the necessary steps to assure that all violations and exceptions identified in the FDIC Compliance Report of Examination of the Bank as of January 26, 1990 have been corrected and appropriate procedures have been instituted to prevent recurrence.
       (c) Within sixty (60) days from the effective date of this ORDER, the written compliance program shall be submitted to the Regional Director and the Commissioner for review and comment. Within forty-five (45) days after such submission, and after consideration of any responsive comments received from the Regional Director and/or the Commissioner within thirty (30) days from their receipt of such submission, the Board of Directors shall approve the written compliance program taking into account any regulatory comments, and such approval shall be recorded in the minutes of the Board of Directors. Subsequent modifications to the written compliance program may be made only after giving the Regional Director and the Commissioner written notice of the proposed modification, and after consideration of any responsive comments submitted by the Regional Director and/or the Commissioner within thirty (30) days from their receipt of the notice of proposed modification. The Board of Directors shall approve any such subsequent modification which approval shall be recorded in the minutes of the Board of Directors. The Bank, its directors, officers and employees shall follow the written compliance program and/or any subsequent modification thereto.
   17. This ORDER shall become effective ten (10) days from the date of its issuance.
   The provisions of this ORDER shall be binding upon the Bank, its directors, officers, employees, agents, successors, assigns, and other persons participating in the conduct of the affairs of the Bank.
   This ORDER has been reviewed and concurred in by the Banking Commissioner of the State of Connecticut.
   The provisions of this ORDER shall remain effective and enforceable except to the {{5-31-92 p.C-552}}extent that, and until such time as, any provisions of this ORDER shall have been modified, terminated, suspended, or set aside by the FDIC.
   Dated at Needham, Massachusetts, this 14th day of September, 1990.
   Pursuant to delegated authority.

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