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   [10,625B] In the Matter of David M. Turner, Lyndonville Savings Bank and Trust Company, Lyndonville, Vermont, Docket No. 92-211k (8-20-92)

   Respondent agrees to pay civil money penalty assessed by the FDIC. This was an uncontested notice and became a final order by operation of law.

In the Matter of

DAVID M. TURNER,
individually,and as vice president and an institution-affiliated party of
LYNDONVILLE SAVINGS BANK AND TRUST COMPANY
LYNDONVILLE, VERMONT
(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-92-211k

NOTICE OF ASSESSMENT OF CIVIL MONEY PENALTIES

   The Federal Deposit Insurance Corporation ("FDIC") is of the opinion that David M. Turner ("Respondent"), individually and as vice president of Lyndonville Savings Bank and Trust Company, Lyndonville, Vermont ("Bank"), has violated the TEMPORARY ORDER TO CEASE AND DESIST ("TEMPORARY ORDER") issued February 26, 1991. 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 the provisions of section 8(i) of the Federal Deposit Insurance Act ("Act"), 12 U.S.C. § 1818(i), and the FDIC Rules of Practice and Procedure, 12 C.F.R. Part 308. In support thereof, the FDIC finds and concludes as follows:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

   1. At all times pertinent to the charges herein, the Bank was a corporation existing and doing business under the laws of the State of Vermont, having its principal place of business in Lyndonville, Vermont. The Bank was, at all times pertinent to the charges herein, an insured State nonmember bank subject to 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 Vermont.

   2. At all times pertinent to the charges herein, the Respondent was vice president of the Bank.

   3. By virtue of his position as vice president, Respondent was, at all times pertinent to the charges herein, an "institution-affiliated party" as that term is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u).
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   4. The FDIC has jurisdiction over the Bank, the Respondent, and the subject matter of the proceeding.

   5. On February 26, 1991, the FDIC issued a TEMPORARY ORDER TO CEASE AND DESIST ("TEMPORARY ORDER") in cause No. FDIC-91-57c&b which provides, in part, that the Bank and its institution-affiliated parties shall not approve, purchase, grant, make, commit to or fund any loan or other extension of credit, directly or indirectly, to or from ___, or to their related interests, unless the loan or other extension of credit does not involve more than the normal risk of repayment or present other unfavorable features and has been approved in advance by a majority of the Bank's entire Board of Directors and, after written notification to the Regional Director of the FDIC's Boston Regional Office ("Regional Director"), the Bank has obtained the nonobjection of the Regional Director or his designee.

   6. The TEMPORARY ORDER further stated that "extension of credit" was to be defined as set forth in section 215.3 of Regulation O of the Board of Governors of the Federal Reserve System ("Regulation O"), 12 C.F.R § 215.3.

   7. Section 215.3 of Regulation O, 12 C.F.R. § 215.3, defines "extension of credit" to include ".   .   . the making or renewal of any loan .   .   ." and ".   .   . any note, draft, bill of exchange or other evidence of indebtedness upon which a person may be liable as maker, drawer, endorser, guarantor, or surety .   .   ." (emphasis added), 12 C.F.R. § § 215.3(a) and 215.3(a)(4).

   8. At all times pertinent to the charges herein, the TEMPORARY ORDER was effective and outstanding.

   9. Prior to July 10, 1991, Respondent was aware or should have been aware of the substantive terms of the TEMPORARY ORDER and of his duty to comply with the restrictions pertaining to extensions of credit to persons listed therein.

   10. On July 10, 1991, Respondent caused the Bank to renew an extension of credit to ___ in the amount of $54,000. This extension of credit was guaranteed by ___, and as such constituted an extension of credit to or for the benefit of ___, a restricted borrower, pursuant to section 215.3 of Regulation O, 12 C.F.R. § 215.3 and the terms of the TEMPORARY ORDER.

   11. By his actions, Respondent caused the Bank to violate paragraph (a) of the TEMPORARY ORDER issued by the FDIC on February 26, 1991, in that Respondent renewed the loan without prior written notification to the FDIC and without obtaining the nonobjection of the Regional Director or his designee.

   12. Respondent did not notify the FDIC concerning the loan renewal, in writing or otherwise, until July 15, 1991.

   13. By virtue of the facts stated above, the FDIC concludes that Respondent violated paragraph (a) of the TEMPORARY ORDER TO CEASE AND DESIST issued February 26, 1991.

ORDER TO PAY

   By reason of the violation set forth in the foregoing NOTICE OF ASSESSMENT, the FDIC has concluded that a civil money penalty should be assessed against Respondent pursuant to section 8(i) of the Act, 12 U.S.C. § 1818(i). After taking into account the appropriateness of the penalty with respect to the financial resources and good faith of Respondent, the gravity of the violations of Respondent, the history of previous violations of Respondent, and such other matters as justice may require, it is:

   ORDERED, that by reason of the violation set forth above, a penalty of $2,000 be, and hereby is, assessed against Respondent pursuant to section 8(i)(2)(A)(ii) of the Act, 12 U.S.C. § 1818(i)(2)(A)(ii).

   FURTHER ORDERED, that the effective date of this ORDER TO PAY be, and hereby is, stayed with respect to the Respondent until twenty (20) days after the date of receipt of the NOTICE OF ASSESSMENT by the Respondent, during which time the Respondent may file an answer and request a hearing pursuant to section 8(i)(2)(H), 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,
{{10-31-00 p.C-2656.5}} 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 Thomas W. Lawless, Jr., Regional Counsel (Supervision), Federal Deposit Insurance Corporation, 160 Gould Street, Needham, Massachusetts 02194.

   If the Respondent fails to file a request for hearing within twenty (20) days from the date of receipt of this NOTICE OF ASSESSMENT, the penalty assessed against Respondent, pursuant to this ORDER TO PAY, will be final and shall be paid within sixty (60) days after the date of receipt of this NOTICE OF ASSESSMENT.

NOTICE OF HEARING

   IT IS FURTHER ORDERED that, if the Respondent requests a hearing with respect to the charges alleged in the NOTICE OF ASSESSMENT, the hearing shall commence one hundred and twenty (120) days from the date of receipt of this NOTICE OF ASSESSMENT at Burlington, Vermont, or at such other date or place upon which the parties to this proceeding and the Administrative Law Judge mutually agree.

   The hearing will be public and shall 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 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 the Respondent requests a hearing, Respondent shall also file an answer to the charges in this NOTICE OF ASSESSMENT within twenty (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 of Respondent to request a hearing shall render the civil money penalty 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 20th day of August, 1992.

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