Each depositor insured to at least $250,000 per insured bank



Home > Regulation & Examinations > Bank Examinations > FDIC Enforcement Decisions and Orders




FDIC Enforcement Decisions and Orders

ED&O Home | Search Form | Text Search | ED&O Help



{{5-31-93 p.C-2346}}
   [10,553] In the Matter of The Farmers & Merchants State Bank, Logansport, Indiana, Docket No. FDIC-92-75b (5-29-92).

   Bank to cease and desist from operating in violation of applicable state and federal laws or regulations. (This order was terminated by order of the FDIC dated 3-11-93; see15,631.)

   [.1] Real Estate Activities—Compliance with State Law Required
   [.2] Dividends—Compliance with State Law Required
   [.3] Board of Directors—Committee to Review Compliance with Cease and Desist Order
   [.4] Compliance Reports—Frequency
   [.5] Shareholders—Disclosure—Cease and Desist Order

In the Matter of

THE FARMERS & MERCHANTS
STATE BANK

LOGANSPORT, INDIANA
(Insured State Nonmember Bank)
ORDER TO CEASE AND DESIST

   The Federal Deposit Insurance Corporation ("FDIC"), on March 20, 1992, issued to The Farmers & Merchants State Bank, Logansport, Indiana ("Bank"), a NOTICE OF CHARGES AND OF HEARING ("NOTICE") pursuant to section 8(b) of the Federal Deposit Insurance Act ("Act"), 12 U.S.C. § 1818(b). The NOTICE charged the Bank with having engaged in inter alia, violations of law or regulation. The Bank and counsel for the FDIC thereafter executed a STIPULATION AND CONSENT TO THE ISSUANCE OF AN ORDER TO CEASE AND DESIST ("CONSENT AGREEMENT"), dated May 29, 1992, whereby, solely for the purpose of this proceeding and without admitting or denying the allegations in the NOTICE, 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 engaged in violations of law or regulation. The FDIC, therefore, accepted the CONSENT AGREEMENT and issued the following:

ORDER TO CEASE AND DESIST

   IT IS HEREBY ORDERED, that the Bank, its institution-affiliated parties, as that term is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u), and its successors and assigns, cease and desist from the following violations of law or regulation:
   1) Violating the State of Indiana restrictions on the purchasing of real estate by banks as set forth in section 28-1-11-5 of the Indiana Code, IND. CODE § 28-1-11-5(1986);
   2) Violating the State of Indiana dividend restrictions as set forth in section 28-1-16-1 of the Indiana Code, IND. CODE § 28-1-16-1(1986); and
   3) Violating the FDIC appraisal requirements as set forth in Part 323 of the FDIC Rules and Regulations, 12 C.F.R. Part 323.
   IT IS FURTHER ORDERED, that the Bank, its institution-affiliated parties, and its successors and assigns, take affirmative action as follows:

   [.1, .2] 1. Within 60 days from the effective date of this ORDER, the Bank shall eliminate and/or correct all violations of law or regulation cited in the above cease-and-desist portion of this ORDER. In addition, the Bank shall implement procedures to ensure future compliance with all applicable laws and regulations.

   [.3] 2. Within 60 days from the effective date of this ORDER, the Bank shall estab- {{4-30-94 p.C-2347}}lish a compliance committee comprised of at least three directors who are not officers of the Bank. The committee shall monitor compliance with this ORDER, and, within 90 days from the effective date of this ORDER, and every 90 days thereafter, shall submit to the board of directors for consideration at its regular monthly meeting a written report detailing the Bank's compliance with this ORDER. The compliance report shall be incorporated in the minutes of the board of directors' meeting. Establishment of this committee does not in any way diminish the responsibility of the entire board of directors for ensuring that compliance with the provisions of this ORDER is achieved.

   [.4] 3. On the last day of the first month following the date of issuance of this ORDER, and on the last day of every third month thereafter, the Bank shall furnish to the Regional Director of the Chicago Regional Office of the FDIC and the Director of the Department of Financial Institutions written progress reports, signed by each member of the Bank's board of directors, detailing the form and manner of any actions taken to secure compliance with this ORDER. Such reports may be discontinued when the corrections required by this ORDER have been accomplished and the Regional Director has, in writing, released the Bank from making further reports.

   [.5] 4. Following the effective date of this ORDER, the Bank shall send to its shareholders or otherwise furnish a description of this ORDER: (1) in conjunction with the Bank's next shareholder communication; and (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, notice, or statement shall be sent to the FDIC in Washington, D.C. for review at least 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.
   The effective date of this ORDER shall be 10 days after its issuance by the FDIC.
   The provisions of this ORDER shall be binding upon the Bank, its institution-affiliated parties, and any successors and assigns thereof.
   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.
   Dated: May 29, 1992.
   Pursuant to delegated authority.

ED&O Home | Search Form | Text Search | ED&O Help

Last Updated 6/6/2003 legal@fdic.gov