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[¶10,625A] In the Matter of Cato W. Jones, Joel N. Keesee, Floy Floyd, and
C.W. Hill, Security State Bank of Wewoka, Wewoka, Oklahoma, Docket No. 92-216k (8-20-92)
Respondents agree to pay civil money penalties assessed by the FDIC.
This was an uncontested notice and became a final order by operation of
law.
In the Matter of
CATO W. JONES,
JOEL N. KEESEE,
FLOY FLOYD, and C.W. HILL,
individually and as institution-affiliated parties of
SECURITY STATE BANK OF WEWOKA
WEWOKA, OKLAHOMA
(Insured State Nonmember Bank)
NOTICE OF ASSESSMENT OF CIVIL MONEY PENALTIES, FINDINGS OF FACT AND CONCLUSIONS OF LAW, ORDER TO PAY AND NOTICE OF HEARING
FDIC-92-216k
NOTICE OF ASSESSMENT OF CIVIL MONEY PENALTIES
The Federal Deposit Insurance Corporation ("FDIC") is of the
opinion that Cato W. Jones, Joel N. Keesee, Floy Floyd, and C.W. Hill
(hereinafter collectively referred to as "Respondents"),
individually and as institution-affiliated parties of Security State
Bank of Wewoka, Wewoka, Oklahoma ("Bank"), each has violated
certain provisions of section 22(h) of the Federal Reserve Act, 12
U.S.C. § 375b, and Regulation O of the Board of Governors of the
Federal Reserve System, 12 C.F.R. Part 215, promulgated thereunder and
made applicable to insured State nonmember banks by section 18(j)(2) of
the Federal Deposit Insurance Act ("Act"), 12 U.S.C.
§ 1828(j)(2), and section 337.3 of the FDIC Rules and Regulations, 12
C.F.R. § 337.3.
Wherefore, the FDIC hereby issues this NOTICE OF ASSESSMENT OF
CIVIL MONEY PENALTIES, FINDINGS OF FACT AND CONCLUSIONS OF LAW, ORDER
TO PAY and NOTICE OF HEARING ("NOTICE OF ASSESSMENT"), pursuant
to section 18(j) (4)(A) of the Federal Deposit Insurance Act
("Act"), 12 U.S.C. § 1828(j)(4)(A) (1989), and the FDIC Rules
of Practice and Procedure, 12 C.F.R. Part 308. In support thereof, the
FDIC finds and concludes as follows:
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FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. The Bank is a corporation existing and doing business under the
laws of the State of Oklahoma and having its principal place of
business at Wewoka, Oklahoma.
2. The Bank was, at all times pertinent to the charges herein, an
insured State nonmember bank, subject to the provisions of the Act, 12
U.S.C. §§ 1811-1831t, the Rules and Regulations of the FDIC, 12
C.F.R. Chapter III, and the laws of the State of Oklahoma.
3. At all times pertinent to the charges herein, Cato W. Jones was a
director of the Bank and was an "institution-affiliated party" of
the Bank as that term is defined in section 3(u) of the Act 12 U.S.C.
§ 1813(u).
4. At all times pertinent to the charges herein, Joel N. Keesee, Floy
Floyd, and C.W. Hill were directors of the Bank, and Respondent Floyd
was an officer of the Bank. Also, Respondents Keesee, Floyd, and Hill
were "institution-affiliated parties" of the Bank as that term is
defined in section 3(u) of the Act, 12 U.S.C. § 1813(u).
5. The FDIC has jurisdiction over the Bank, the Respondents, and
subject matter of this proceeding.
6. Following the FDIC examination of the Bank on May 16, 1990, Regional
Director Walker of the FDIC sent a letter dated July 20, 1990 to the
Bank's board of directors disclosing chronic infractions involving
overdrafts to the demand deposit account of Respondent Cato Jones.
7. The Bank's board of directors responded in a letter dated August
17, 1990. The board's response contained assurances of Respondent Cato
Jones' future compliance.
8. On or about August 16, 1990, an overdraft in the amount of $1,390.88
occurred in the demand deposit account (No. 0211-017) of Respondent
Cato Jones. A check in this amount was maintained as an unposted debit
in the Bank's "Demand Deposit Unposted Listing" due to
insufficient funds in the account to pay the item.
9. On or about September 21, 1990, an overdraft occurred in said
account because a debit item in the amount $1,090.36 drawn upon the
demand deposit account of Respondent Cato Jones was maintained as an
unposted debit in the Bank's "Demand Deposit Unposted Listing"
due to insufficient funds in the account to pay the item.
10. On or about November 22, 1990, an overdraft occurred in said
account because a debit item in the amount of $1,090.36 drawn upon the
demand deposit account of Respondent Cato Jones was maintained as an
unposted debit in the Bank's "Demand Deposit Unposted Listing"
due to insufficient funds in the account to pay the item.
11. On or about January 23, 1991, an overdraft occurred in said account
because a debit item in the amount of $1,051 drawn upon the demand
deposit account of Respondent Cato Jones was maintained as an unposted
debit in the Bank's "Demand Deposit Unposted Listing" due to
insufficient funds in the account to the item.
12. On or about February 7, 1991, an overdraft occurred in said account
because a debit item in the amount of $4,325 drawn upon the demand
deposit account of Respondent Cato Jones was maintained as an unposted
debit in the Bank's "Demand Deposit Unposted Listing" due to
insufficient funds in the account to pay the item.
13. On or about February 26, 1991, an overdraft occurred in said
account because a debit item in the amount of $1,051 drawn upon the
demand deposit account of Respondent Cato Jones was maintained as an
unposted debit in the Bank's "Demand Deposit Unposted Listing"
due to insufficient funds in the account to pay the item.
14. On or about March 22, 1991, an overdraft occurred in said account
because a debit item in the amount of $1,051 drawn upon the demand
deposit account of Respondent Cato Jones was maintained as an unposted
debit in the Bank's "Demand Deposit Unposted Listing" due to
insufficient funds in the account to pay the item.
15. In each and every one of the instances cited in Paragraphs 8
through 14, above, the Bank became obligated to pay the check or debit
item in question due to the length of time the item was held, thereby
creating an overdraft.
16. During the period covered by the dates cited in Paragraphs 8
through 14, above, Respondent Cato Jones did not have a written,
pre-authorized, interest-bearing extension credit plan with the Bank
that specified a method of repayment for such overdrafts, nor did he
have a written, pre-authorized
{{10-31-00 p.C-2656.2}}plan for transfer of funds from another
account at the Bank.
17. Each of the overdrafts listed in Paragraphs 8 through 14 is a
violation of section 215.4(d) of Regulation O, 12 C.F.R. § 215.4(d),
in that Respondent Cato Jones did not have a written, pre-authorized,
interest-bearing extension credit plan with the Bank that specified a
method of repayment for such overdrafts, nor did he have a written,
pre-authorized plan for transfer of funds from another account at the
Bank. Additionally, each overdraft exceeded $1,000.
18. Respondent Cato Jones has chronically violated the overdraft
prohibitions of Regulation O over an extended period, which has been
noted in the Oklahoma Banking Department's Report of Examination of
March 22, 1991 and in the FDIC Report of Examination of July 5, 1991.
By virtue of the foregoing facts, the FDIC concludes that each of the
other named Respondents, as members of the board of directors of the
Bank, violated Regulation O by failing to take timely and effective
steps to remedy this chronic situation and that a civil money penalty
should be assessed against each Respondent pursuant to section
18(j)(4)(A) of the Act, 12 U.S.C. § 1828(j)(4)(A) (1989).
19. As used herein, pursuant to section 3(v) of the Act, 12 U.S.C.
§ 1813(v) (1989), and section 308.3(r) of the FDIC Rules of Practice
and Procedure, 12 C.F.R. § 308.3(r), the term "violation"
includes, without limitation, any action (alone or with another or
others) for toward causing, bringing about, participating in,
counseling, or aiding or abetting a violation.
ORDER TO PAY
By reason of the violations set forth in the NOTICE OF ASSESSMENT,
the FDIC has concluded that civil money penalties should be assessed
against each Respondent pursuant to section 18(j)(4) of the Act, 12
U.S.C. § 1828(j)(4) (1989). After taking into account the
appropriateness of each penalty with respect to the financial resources
and good faith of each Respondent, the gravity of the violation of each
Respondent, the history of previous violations of each Respondent and
such other matters as justice may require, it is:
ORDERED, that, by reason of the violations set forth above pursuant to
section 18(j)(4)(A) of the Act, 12 U.S.C. § 1828(j) (4)(A) (1989), a
penalty of $2,500 be, and hereby is, assessed against Respondent Cato
W. Jones; a penalty of $1,000 be, and hereby is, assessed against
Respondent Joe N. Keesee; a penalty of $1,000 be, and hereby is,
assessed against Respondent Floy Floyd; a penalty of $1,000 be, and
hereby is, assessed against Respondent C.W. Hill, all pursuant to
section 18(j)(4) of the Act, 12 U.S.C. § 1828(j)(4) (1989) for
failure to achieve and maintain compliance with the prohibition against
overdrafts as required by 12 C.F.R. § 215.4.
FURTHER ORDERED, that the effective date of this ORDER TO PAY be, and
hereby is, stayed with respect to each Respondent until 20 days after
the date of receipt of the NOTICE OF ASSESSMENT by Respondents, during
which time each Respondent may file an answer and request a hearing
pursuant to section 8(i)(2)(H) of the Act, 12 U.S.C. § 1818(i)(2)(H)
(1989), and section 308.19 of the FDIC Rules of Practice and Procedure,
12 C.F.R. § 308.19. An original and one copy of the answer, any such
request for a hearing, and all other documents in this proceeding must
be filed in writing with the Office of Financial Institution
Adjudication, 1700 G Street, N.W., Washington, D.C. 20552, pursuant to
section 308.10 of the FDIC Rules of Practice and Procedure, 12 C.F.R.
§ 308.10. Also, copies of all papers filed in this proceeding shall
be served upon the Office of the Executive Secretary, Federal Deposit
Insurance Corporation, 550 17th Street, N.W., Washington, D.C. 20429;
Arthur L. Beamon, Associate General Counsel, Compliance and
Enforcement, Federal Deposit Insurance Corporation, 550 17th Street,
N.W., Washington, D.C. 20429; and Judith K. Sinclair, Regional Counsel
(Supervision), Federal Deposit Insurance Corporation, 1910 Pacific
Avenue, Suite 1900, Dallas, Texas 75201.
If any Respondent fails to file a request for a hearing within 20 days
from the date of receipt of this NOTICE OF ASSESSMENT, the penalty
assessed against that Respondent, pursuant to this ORDER TO PAY, shall
be final and unappealable and shall be paid within 60 days after the
date of receipt of this NOTICE OF ASSESSMENT.
NOTICE OF HEARING
IT IS FURTHER ORDERED, that if any Respondent requests a hearing
with respect to the charges in the NOTICE OF ASSESSMENT, the hearing
shall commence 120 days
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ASSESSMENT at Dallas, Texas, or on such other date or place as the
parties to this proceeding and the Administrative Law Judge mutually
agree.
The hearing will be public, and in all respects will be conducted in
accordance with the provisions of the Act, 12 U.S.C. §§ 1811-1831t,
the Administrative Procedure Act, 5 U.S.C. §§ 551-559, and the
FDIC's Rules of Practice and Procedure, 12 C.F.R. Part 308. The
hearing will be held before an Administrative Law Judge to be appointed
by the Office of Financial Institution Adjudication pursuant to 5
U.S.C. § 3105. The exact time and location of the hearing will be
determined by the Administrative Law Judge.
In the event any Respondent requests a hearing, such Respondent shall
file an answer to the charges in this NOTICE OF ASSESSMENT within 20
days after the date of receipt of the NOTICE OF HEARING in accordance
with section 308.19 of the FDIC Rules of Practice and Procedure, 12
C.F.R. § 308.19.
Failure to request a hearing shall render the civil money
penalties assessed in this NOTICE OF ASSESSMENT final and unappealable
pursuant to section 8(i)(2)(E)(ii) of the Act, 12 U.S.C.
§ 1818(i)(2)(E)(ii), and section 308.19(c)(2) of the FDIC Rules of
Practice and Procedure, 12 C.F.R. § 308.19(c)(2).
Pursuant to delegated authority.
Dated at Washington, D.C., this 4th day of September, 1992.
