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FDIC Enforcement Decisions and Orders

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[10,690] In the Matter of Charles W. Schuerman, Farmers Bank of Clatonia, Clatonia, Nebraska, Docket No. FDIC-92-349e (12-23-92).

   Respondent prohibited from participating in the conduct of affairs of, or exercising voting rights in, any insured institution without the prior consent of the FDIC.

   [.1] Prohibition—Participation in Conduct of Affairs
   [.2] Prohibition—Exercise of Voting Rights

In the Matter of
CHARLES W. SCHUERMAN,
individually
and as an institution-affiliated
party of
FARMERS BANK OF CLATONIA
CLATONIA, NEBRASKA
(Insured State Nonmember Bank)
ORDER OF REMOVAL FROM
OFFICE AND PROHIBITION
FROM FURTHER PARTICIPATION

FDIC-92-349e

   Charles W. Schuerman ("Respondent"), having been advised of his right to a NOTICE OF INTENTION TO PROHIBIT FROM FURTHER PARTICIPATION ("NOTICE") issued by the Federal Deposit Insurance Corporation ("FDIC"), detailing the violations of law or regulation, unsafe or unsound banking practices, and/or breaches of fiduciary duty alleged to have been committed by the Respondent individually and as an institution-affiliated party in his capacity as a director, officer, controlling stockholder and/or person participating in the conduct of the affairs of Farmers Bank of Clatonia, Clatonia, Nebraska ("Bank"), by reason of which the Bank has suffered or will probably suffer financial loss or other damage, the interests of the Bank's depositors have been or could be prejudiced, and/or the Respondent has received financial gain or other benefit, and which involved personal dishonesty on the part of Respondent and/or demonstrated Respondent's willful or continuing disregard for the safety and soundness of the Bank; and having been further {{2-28-93 p.C-2936}}advised of his right to a hearing on the alleged charges under section 8(e) of the Federal Deposit Insurance Act ("Act"), 12 U.S.C. § 1818(e), and the FDIC Rules of Practice and Procedure, 12 C.F.R. Part 308, and having waived those rights, Respondent entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF AN ORDER OF REMOVAL FROM OFFICE AND PROHIBITION FROM FURTHER PARTICIPATION ("CONSENT AGREEMENT") with a representative of the Legal Division of the FDIC, dated June 24, 1992, whereby solely for the purpose of this proceeding and without admitting or denying any violations of law or regulation, unsafe or unsound banking practices, and/or breaches of fiduciary duty, personal dishonesty, or financial gain or other benefit, Respondent consented to the issuance of an ORDER OF REMOVAL FROM OFFICE AND PROHIBITION FROM FURTHER PARTICIPATION ("ORDER") by the FDIC.
   The FDIC considered the matter and determined it had reason to believe that:
   (a) The Bank is a "State nonmember bank" as that term is defined in section 3(e)(2) of the Act, 12 U.S.C. § 1813(e)(2), and pursuant to section 3(q)(3) of the Act, 12 U.S.C. § 1813(q)(3), he FDIC is the "appropriate Federal banking agency" to issue an order under section 8(e) of the Act, 12 U.S.C. § 1818(e), against the Respondent;
   (b) Respondent has engaged or participated in violations of law or regulation, and/or unsafe or unsound banking practices, and/or breaches of fiduciary duty as an institution-affiliated party of the Bank;
   (c) By reason of such violations, practices and/or breaches of fiduciary duty, (i) the Bank has suffered or will probably suffer financial loss or other damage, (ii) the interests of the Bank's depositors have been or could be prejudiced, and/or (iii) Respondent has received financial gain or other benefit; and
   (d) Such violations, practices and/or breaches of fiduciary duty involve Respondent's personal dishonesty and/or demonstrate his willful or continuing disregard for the safety or soundness of the Bank.
   The FDIC, therefore, accepts the CONSENT AGREEMENT and issues the following:

ORDER OF REMOVAL FROM OFFICE
AND
PROHIBITION FROM FURTHER
PARTICIPATION

   [.1] 1. IT IS HEREBY ORDERED, that Respondent is removed from office and, except with prior written consent obtained in accordance with section 8(e)(7)(B) of the Act, 12 U.S.C. § 1818(e)(7)(B), Respondent is prohibited from participating in any manner in the conduct of the affairs of the Bank.

   2. IT IS FURTHER ORDERED that, except with prior written consent obtained in accordance with section 8(e)(7)(B) of the Act, Respondent shall not continue or commence to hold any office in, or participate in any manner in the conduct of the affairs of, any institution or agency described in section 8(e)(7)(A) of the Act, 12 U.S.C. § 1818(e)(7)(A), including:

       (a) any insured depository institution, as defined in section 3(c) of the Act, 12 U.S.C. § 1813(c);
       (b) any institution treated as an insured bank under sections 8(b)(3) or 8(b)(4) of the Act, 12 U.S.C. §§ 1818(b)(3) and (4), including, without limitation: (i) any bank holding company; (ii) any subsidiary of a bank holding company other than a bank; (iii) any foreign bank that maintains a branch or agency in a state; (iv) any foreign bank or foreign company controlling a foreign bank that controls a commercial lending company organized under state law; and (v) any company of which any foreign bank or company referred to in items (iii) and (iv) of this paragraph 2(b) is a subsidiary;
       (c) any institution treated as a savings association under section 8(b)(8) of the Act, 12 U.S.C. § 1818(b)(8), including, without limitation: (i) any holding company of a savings association; (ii) any subsidiary of such a holding company; (iii) any service corporation of a savings association; and (iv) any subsidiary of such service corporation, whether wholly or partly owned;
       (d) any insured credit union under the Federal Credit Union Act;
       (e) any institution chartered under the Farm Credit Act of 1971;
       (f) any appropriate Federal depository institution regulatory agency;
    {{5-31-94 p.C-2937}}
       (g) the Federal Housing Finance Board and any Federal home loan bank; and
       (h) the Resolution Trust Corporation without the prior written consent of the FDIC and the appropriate Federal financial institutions regulatory agency, as that term is defined in section 8(e)(7)(D) of the Act, 12 U.S.C. § 1818(e)(7)(D).
   [.2] 2. IT IS FURTHER ORDERED, that except with prior written consent obtained in accordance with section 8(e)(7)(B) of the Act, Respondent shall not:
       (a) solicit, procure, transfer or attempt to transfer, vote or attempt to vote any proxy, consent or authorization with respect to any voting rights in the Bank or any insured depository institution, agency or organization enumerated in section 8(e)(7)(A) of the Act, 12 U.S.C. § 1818(e) (7)(A);
       (b) violate any voting agreement previously approved by the appropriate Federal banking agency; or
       (c) vote for a director of any institution described in section 8(e)(7)(A) of the Act, or serve or act as an institution-affiliated party as that term is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u).
   This ORDER shall become effective ten days after the date of its issuance.
   The provisions of this ORDER shall remain effective and enforceable, except to the extent that, and until such time as, any provision of this ORDER shall have been modified, terminated, suspended, or set aside by the FDIC.
   Dated at Washington, D.C., this 23rd day of December, 1992.
   Pursuant to delegated authority.

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