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FDIC Enforcement Decisions and Orders

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{{7-31-93 p.C-3204}}
   [10,795] In the Matter of San Diego First Bank, San Diego, California, Docket No. FDIC-93-99b (5-10-93).

   Bank to cease and desist from violating rules and regulations concerning the Bank Secrecy Act.

   [.1] Bank Secrecy Act—Compliance Required
   [.2] Violations of Law—Eliminate/Correct
   [.3] Compliance Reports—To State Banking Superintendent
   [.4] Shareholders—Disclosure—Cease and Desist Order

In the Matter of

SAN DIEGO FIRST BANK
SAN DIEGO, CALIFORNIA
(Insured State Nonmember Bank)
ORDER TO CEASE AND DESIST
FDIC-93-99b

   San Diego First Bank, San Diego, California ("Bank"), having been advised of its right to a Notice of Charges and of Hearing detailing the violations of laws, rules, and/or regulations alleged to have been committed by the Bank and of its right to a hearing on the 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 14, 1993, whereby solely for the purpose of this proceeding and without admitting or denying the alleged charges of violations of laws, rules, and/or regulations, 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 committed violations of laws, rules, 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 any institution-affiliated party as such term is defined in Section 3(u) of the Act, 12 U.S.C. § 1813(u), cease and desist from violating the following laws, rules, and/or regulations:
   A. Part 326 of the Rules and Regulations of the Federal Deposit Insurance Corporation, 12 C.F.R. § 326.
   IT IS FURTHER ORDERED that the Bank take affirmative action as follows:

   [.1] 1. Within 60 days from the effective date of this ORDER, the Bank shall comply with the Bank Secrecy Act and its implementing rules and regulations which shall include, but is not limited to, taking the following measures to eliminate and/or correct all violations of the Bank Secrecy Act cited in the FDIC's Compliance Report of the Bank as of November 19, 1992:
      (a) Develop and implement a formal written compliance program which, at a minimum, adheres to the following four requirements as set forth in Section {{7-31-93 p.C-3205}}326.8(c) of the FDIC Rules and Regulations:

       (i) providing for a system of internal controls to assure ongoing compliance;
       (ii) providing for independent testing for compliance to be conducted by bank personnel or by an outside party;
       (iii) designating a senior bank official who is responsible for coordinating and monitoring day-to-day compliance; and
       (iv) providing training for appropriate personnel.

   [.2] 2. Within 60 days from the effective date of this ORDER, the Bank shall eliminate or correct each violation cited in the FDIC's Compliance Report of the Bank as of November 19, 1992, which involves any of the following laws, rules and/or regulations:
   (a) Part 326 of the Rules and Regulations of the Federal Deposit Insurance Corporation, 12 C.F.R. § 326.
    3. The Bank shall comply with all applicable banking laws, rules and/or regulations while this ORDER remains in effect.

   [.3] 4. On the tenth day of the second month following the effective date of this ORDER, and on the tenth day of every sixth month thereafter, the Bank shall furnish written progress reports to the Regional Director of the FDIC's San Francisco Regional Office ("Regional Director") and to the Honorable James E. Gilleran, Superintendent of Banks for the State of California ("Superintendent") which details the form and manner of any actions taken to secure compliance with this ORDER and the results thereof. The Bank may discontinue submitting such reports when the corrections required by this ORDER have been accomplished and the Regional Director and the Superintendent have expressly released the Bank in writing from making any further reports.

   [.4] 5. The Bank shall send to its shareholders a copy of this ORDER or a description of this ORDER in conjunction both with the Bank's next shareholder communication and with its notice and/or proxy statement preceding the Bank's next shareholder meeting. If the Bank sends its shareholders a description of this ORDER rather than a copy of it, the description shall fully describe this ORDER in all respects. The Bank shall send copies of its shareholder communication, notice, and/or proxy statement, together with the description or copy of this ORDER that it intends to submit to its shareholders, to the FDIC, Registration and Disclosure Section, Washington, D.C. 20429, at least 15 days prior to disseminating any such material to its shareholders. The Bank shall make all changes requested by the FDIC to be made to each such shareholder communication prior to the Bank's disseminating each communicating to its shareholders.
   This ORDER shall be binding upon the Bank and its directors, officers, employees, agents, successors, assigns, and other institution-affiliated parties.
   The provisions of this ORDER shall become effective 10 days from the date of its issuance and shall remain in effect and enforceable except to the extent that, and until such time as, any of its provisions shall have been modified, terminated, suspended, or set aside by the FDIC.
   Dated at San Francisco, California this 10th day of May, 1993.
   Pursuant to delegated authority.

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