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FDIC Enforcement Decisions and Orders

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{{4-30-94 p.C-992}}
   [10,225] In the Matter of Hibernia Savings Bank, Quincy, Massachusetts, Docket No. FDIC-91-119b (4-25-91).

   Bank to cease and desist from failing to provide adequate supervision and direction over the affairs of the Bank; engaging in management policies and practices which are detrimental to the Bank; operating with and excessive volume of adversely classified assets; engaging in hazardous lending and lax collection practices; operating with an inadequate allowance for loan and lease losses; operating with deficient loan documentation; operating with inadequate primary capital; paying excessive cash dividends; and engaging in violations of applicable laws and regulations. (This order was terminated by order of the FDIC dated 2-1-94; see15,802.)

   [.1] Management—Qualifications—Review
   [.2] Management Plan—Minimum Requirements
   [.3] Board of Directors—Election—Independent Directors
   [.4] Board of Directors—Meetings—Frequency—Written Record Required
   [.5] Assets—Adversely Classified—Reduce/Eliminate
   [.6] Capital—Capital Plan—Minimum Requirements—Review
   [.7] Allowance for Loan and Lease Losses—Increase/Maintain
   [.8] Loans—Risk Position—Reduce—Written Plan Required
   [.9] Loans—Extensions of Credit—Existing Borrowers—Limits
   [.10] Loan Policy—Revision—Minimum Requirements
   [.11] Funds Management—Written Policy Required
   [.12] Investments—Written Policy Required
   [.13] Dividends—Restricted
   [.14] Shareholders—Disclosure—Cease and Desist Order
   [.15] Technical Exceptions—Correct
   [.16] Strategic Plan—Preparation Required
   [.17] Internal Routine and Controls—Deficiencies—Correct
   [.18] Violations of Law—Eliminate/Correct
   [.19] Compliance—Progress Reports—Frequency

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In the Matter of

HIBERNIA SAVINGS BANK
QUINCY, MASSACHUSETTS
(Insured State Nonmember Bank)
ORDER TO CEASE AND DESIST

   Hibernia Savings Bank, Quincy, Massachusetts ("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 ("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 April 11, 1991, whereby solely for the purpose of settling this proceeding and without admitting any allegations or implications of fact or the existence of any unsafe or unsound banking practices or violations of law and/or regulations or any other ground for issuance of an order under section 8(b) of the Act, 12 U.S.C. § 1818(b), 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 and its institution—affiliated parties, as that term is defined in Section 3(u) of the Act, 12 U. S. C. 1813(u), cease and desist from the following unsafe or unsound banking practices and violations of law and/or regulations:

       (a) failing to provide adequate supervision and direction over the affairs of the Bank to prevent unsafe or unsound practices;
       (b) engaging in management policies and practices which are detrimental to the Bank;
       (c) operating with an excessive volume of adversely classified assets;
       (d) engaging in hazardous lending and lax collection practices, including maintaining an excessive volume of adversely classified loans;
       (e) operating with an inadequate allowance for loan and lease losses for the volume, kind and quality of loans held;
       (f) operating with deficient or inadequate loan documentation, including but not limited to current financial statements, insurance coverage, title searches or legal opinions, and cash flow and/or operating information;
       (g) operating with inadequate primary capital for the kind and quality of assets held;
       (h) paying excessive cash dividends in relation to the Bank's net income and/or capital position; and
       (i) engaging in violations of applicable laws and regulations;
   IT IS FURTHER ORDERED that the Bank and its institution-affiliated parties take affirmative action as set forth below. Solely for purposes of enforcement of this Order pursuant to section 8(i) of the Act, 12 U.S.C. § 1818(i), the Bank and its institution-affiliated parties will not be deemed to have engaged in any of the unsafe or unsound banking practices or violations of law and/or regulation described in provisions (a) through (i) above, except to the extent the Bank is not in compliance with the following:

   [.1] 1. (a) No more than one hundred twenty (120) days from the effective date of this ORDER, the Bank shall have and thereafter continue to retain qualified management. Such management shall include the retention of qualified individuals with proven ability in managing a bank of comparable size and experience in upgrading a low quality loan portfolio. Such person(s) shall be provided the necessary written authority to implement the provisions of this ORDER. The qualifications of management shall be assessed on its ability to:

       (i) comply with the requirements of this ORDER.
       (ii) operate the Bank in a safe and sound manner.
       (iii) comply with applicable laws and regulations, and
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       (iv) restore all aspects of the Bank is a safe and sound condition, including asset quality, capital adequacy, earnings, management effectiveness and liquidity.
During the life of this ORDER, the Bank shall notify the Regional Director of the FDIC's Boston Regional Office ("Regional Director") and the Commissioner of Banks for the Commonwealth of Massachusetts ("Commissioner") in writing of any changes in management at the level of senior executive officer, as that term is defined in 12 C.F.R. § 303.14. The notification must include the names and background of any replacement personnel and must be provided prior to the individual's assuming the new position.

   [.2] (b) Toward this end, within sixty (60) days from the effective date of this ORDER, the Board of Directors shall, with such assistance from the Bank's management or any outside consultants as the Board may deem appropriate, 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 Board committees as are needed to provide guidance and oversight to active management;
       (iii) evaluation of each Bank officer (Vice President and above) 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. No sooner than thirty (30) days, but under no circumstances more than forty-five (45) days after such submission, the Board of Directors shall approve the written management plan, taking into consideration any comments received from the Regional Director and/or the Commissioner within such thirty (30) day period, 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. No such modification shall become effective until approved by the Board of Directors, and such 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.

   [.3] (d) (i) The written management plan shall also include the requirement that the Board of Directors of the Bank, or a committee or committees 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.
   (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, other than the Clerk, or any of its {{6-30-91 p.C-995}}affiliated organizations and who does not directly or indirectly 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 who directly or indirectly owns 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.

   [.4] (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. A chronological file of all written agendas shall be maintained. Notwithstanding the foregoing, the Board shall not be precluded 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.

   [.5] 2. Within ten (10) days from the effective date of this ORDER, the Bank: (1) shall eliminate from its books, by charge-off (which shall include the establishment of specific reserves) or collection, all assets or portions of assets classified "Loss" as of July 9, 1990; and (2) shall either (A) eliminate from its books by charge-off (which shall include the establishment of specific reserves) or collection, 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" as of July 9, 1990, which have not been previously collected or charged off. Reduction of these assets through use of proceeds or loans made by the Bank, other than loans to qualified third party borrowers, does not constitute "collection" or "elimination" for the purpose of this paragraph.

   [.6] 3. (a) The Bank shall take all reasonable and appropriate action to bring the Bank's capital to a sufficient level and thereafter to operate within a capital structure sufficient in relation to the composition and quality of its assets and funding liabilities and in accordance with Part 325 of the FDIC Rules and Regulations. Toward this end, the Bank will develop a Capital Plan which will be submitted to the Regional Director and the Commissioner for approval within ninety (90) days from the effective date of this ORDER. Immediately upon receipt of the Regional Director and the Commissioner's approval of the Bank's Capital Plan, including any modifications to the plan suggested by these regulatory authorities, the Bank shall begin to implement such plan. The Capital Plan shall be deemed approved by the Regional Director and the Commissioner unless written notice to the contrary from either is received by the Bank within sixty (60) days from the Bank's submission of the Plan. The Capital Plan shall address the prospects for both internal and external sources of capital augmentation, including capital infusions, retention of earnings, restriction of asset growth, and asset sales, with the goal of producing core capital elements (Tier 1) at or in excess of six (6.0) percent of the Bank's total assets ("leverage capital ratio"), with stated timetables in which to attain this goal. For the purposes of this ORDER, the terms "core capital elements (Tier 1)" and "total assets" shall have the meanings ascribed to them in Appendix A to Part 325 of the FDIC's Rules and Regulations, 12 C.F.R. Part 325, App. A and Part 325 of the FDIC's Rules and Regulations, 12 C.F.R. Part 325, respectively, as of the effective date of this ORDER.
   (b) Such increase in leverage capital may be accomplished by:

       (i) the retention of earnings;
       (ii) the sale of new offerings of common stock or perpetual preferred stock;
       (iii) the sale or transfer of existing shares by the Bank's shareholders to individuals who will contribute the required increase in capital to the Bank;
       (iv) the direct contribution of cash by the shareholders and/or directors of the Bank;
       (v) the collection of all or part of assets classified: (A) "Loss" as of July 9, 1990, without loss or liability to the
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    Bank, or (B) "Doubtful" as of July 9, 1990, without further or additional 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 remaining balance outstanding with regard to such loans and leases and the remainder, if any, then 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;
       (vi) the collection in cash of assets previously charged off;
       (vii) any combination of the above means; or
       (viii) any other means acceptable to the Regional Director and the Commissioner.
   (c) If all or part of the increase in capital required 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. section 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.
   (d) In complying with the provisions of paragraph 3(c) 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(d) 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.
   (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 leverage capital by each of the methods specified in paragraphs 3(b)(i) through 3(b)(viii) of this ORDER.

   [.7] 4. (a) Within thirty (30) days from the effective date of this ORDER, the Bank shall have increased its allowance for loan and lease existing as of July 9, 1990 by $1,000,000 at a minimum. Thereafter, 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").

   (b) 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) cause the Bank to 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 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 sixty (60) days from the effective date of this ORDER, management of the Bank, under the supervision and oversight of the Board of Directors, shall develop a written plan of action {{6-30-91 p.C-997}}to lessen the Bank's risk position with respect to each borrower who or which had outstanding principal owing to the Bank in excess of $200,000 which was classified "Substandard" or "Doubtful," in whole or in part, as of July 9, 1990. In developing such plan, the Bank shall, at a minimum:

       (i) review the financial position of each such borrower, including source of repayment, repayment ability, and alternative repayment sources; and
       (ii) evaluate the available collateral for each such credit, including possible actions to improve the Bank's collateral position.
Based upon such review and evaluation, the written plan of action shall also: (A) establish target dollar levels to which the Bank shall reduce the aggregate dollar volume of such "Substandard" or "Doubtful" classifications 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 on such classified assets on the Bank's Board of Directors for review and notation in the Board minutes. Such information shall be in the form of Exhibit A, or in any other form that includes such information as is contained in said Exhibit A. 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 Office of the Commissioner of Banks. Payment of loans with the proceeds of other loans made by the Bank, other than loans to qualified third party borrowers, will 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. No sooner than thirty (30) days, but under no circumstances more than forty-five (45) days after such submission, the Board of Directors shall approve the written plan of action, taking into consideration any comments received from the Regional Director and/or the Commissioner within such thirty-day period, and such approval shall be recorded in the minutes of the Board of Directors. Subsequent modifications to the written 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. No such modification shall become effective until approved by the Board of Directors, and such 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.

   [.9] 6. The Bank shall not extend or renew, 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 or classified, in whole or in part, "Loss," "Doubtful," or "Substandard," and is uncollected, 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, if applicable, 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. Notwithstanding the foregoing provisions, this ORDER shall not require such approvals by the Board of Directors for extensions of credit made pursuant to legally binding contractual commitments entered into by the Bank prior to the effective date of this ORDER.

   [.10] 7. (a) Within ninety (90) days from the effective date of this ORDER, the Bank shall revise its written loan policy, which revision shall include, at a minimum:

       (i) the lending authority of each loan officer;
       (ii) the lending authority of the loan or executive committee, if any;
       (iii) the responsibility of the Board of Directors in reviewing, ratifying and approving loans;
       (iv) the guidelines under which unsecured loans will be granted;
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       (v) the guidelines for rates of interest and terms of repayment for unsecured loans and secured loans;
       (vi) with regard to secured loans; (1) limitations on the amount advanced in relation to the value of the collateral, and (2) the documentation required by the Bank for each type of secured loan;
       (vii) the maintenance and review of complete and current credit files on each borrower;
       (viii) appropriate and adequate collection procedures, including, but not limited to, the actions to be taken against borrowers who fail to make timely payments;
       (ix) guidelines establishing limitations on the maximum volume of loans in relation to total assets;
       (x) appropriate limitations on extension of credit through overdrafts and cash items;
       (xi) the determination and documentation of sources and terms of loan repayment;
       (xii) retention of lien searches and appraisals covering personal property and liens on real estate;
       (xiii) maintenance of written, individual loan file comments by officers;
       (xiv) provisions addressing the capitalization of accrued and unpaid interest on loans;
       (xv) procedures regarding designations of nonaccrual loans;
       (xvi) procedures for identifying, supervising, and collecting problem loans; and
       (xvii) periodic review of overdue, problem and/or adversely classified or special mention loans by the Board of Directors, so as to monitor management's administration of such distressed credits, and to provide guidance as necessary.
   (b) The revised written loan policy shall be submitted to the Regional Director and the Commissioner for review and comment. No sooner than thirty (30) days, but under no circumstances more than forty-five (45) days after such submission, the Board of Directors shall approve the revised written loan policy, taking into consideration any comments received from the Regional Director and/or the Commissioner within such thirty-day period, and such approval shall be recorded in the minutes of the Board of Directors. Subsequent modifications to the revised written loan 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. No such modification shall become effective until approved by the Board of Directors, and such 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 policy and/or any subsequent modification thereto.

   [.11] 8. (a) Within ninety (90) 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. No sooner than thirty (30) days, but under no circumstances more than forty-five (45) days after such submission, the Board of Directors shall approve the written funds management policy, taking into consideration any comments received from the Regional Director and/or the Commissioner within such thirty day period, 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 no- {{7-31-91 p.C-999}}tice 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. No such modification shall become effective until approved by the Board of Directors, and such 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.

   [.12] 9. Within ninety (90) days from the effective date of this ORDER, the Bank shall develop a written investment policy consisting of goals and strategies for improving the quality of the Bank's investment portfolio. The written investment policy shall be submitted to the Regional Director and the Commissioner for review and comment. No sooner than thirty (30) days, but under no circumstances more than forty-five (45) days after such submission, the Board of Directors shall approve the written investment plan, taking into consideration any comments received from the Regional Director and/or the Commissioner within such thirtyday period, and such approval shall be recorded in the minutes of the board. Subsequent modifications to the written investment 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 Commissioner within thirty (30) days from their receipt of the notice of proposed modification. No such modification shall become effective until approved by the Board of Directors, and such approval shall be recorded in the minutes of the Board of Directors. The Bank, its directors, officers and employees shall follow the written investment plan and/or any subsequent modification thereto.

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

   [.14] 11. Following the effective date of this ORDER, the Bank shall send to its shareholders a description of this ORDER, (1) in conjunction with the Bank's next shareholder communication, and also (2) in conjunction with its notice or proxy statement preceding the Bank's next shareholder meeting. The description shall fully describe the ORDER in all material respects. The description and any accompanying communication, statement, or notice shall be sent to the FDIC, Registration and Disclosure Section, Washington, D.C. 24029, for review at least twenty (20) days prior to dissemination to shareholders. Any changes requested to be made by the FDIC shall be made prior to dissemination of the description, communication, notice, or statement.

   [.15] 12. (a) Within sixty (60) days from the effective date of this ORDER, the Bank shall correct the remediable technical exceptions on loans noted on pages 2-d of the FDIC's Report of Examination of the Bank as of July 9, 1990.
   (b) Within (60) days from the effective date of this ORDER, the Bank shall correct the remediable cited deficiencies in the loans listed for "Special Mention" on pages 2-b of the FDIC's Report of Examination of the Bank as of July 9, 1990.

   [.16] 13. Within ninety (90) days from the effective date of this ORDER, the Bank shall submit to the Regional Director and Commissioner a strategic plan that will outline the goals and objectives of the Bank, including defining the types of loans and investments to be made and the sources of funds. Said plan shall consider asset quality standards, volatility and cost of liabilities, as well as general staffing levels, to accomplish the designated goals. Emphasis on budgetary considerations which may help alleviate the effects of present earnings deficiencies, supplement operating income, and foster long term goals and objectives should also be formulated.

   [.17] 14. Within sixty (60) days from the effective date of this ORDER, the Bank shall correct all remediable operating deficiencies in internal routine and controls as set forth in the July 9, 1990 FDIC Report of Examination.

   [.18] 15. 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 as described on pages 6-a of the FDIC's Report of Examination of the bank as of July 9, 1990.

   [.19] 16. Within thirty (30) days from the last day of the month in which this ORDER {{7-31-91 p.C-1000}}becomes effective, and, thereafter, within thirty (30) days from the end of each calendar quarter, the Bank shall furnish written progress reports to the Regional 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.
   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 and its institution-affiliated parties.
   This ORDER has been reviewed and concurred in by the Commissioner.
   The provisions of this ORDER shall remain effective and enforceable except to the extent that, and until such time as, any provisions of this ORDER shall have been modified, terminated, suspended, or set aside by the FDIC.
   Pursuant to delegated authority.
   Dated at Needham, Massachusetts this 25th day of April, 1991.

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