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


{{12-31-96 p.C-3932}}
   [11,127] In the Matter of First Mountain Bank, Big Bear Lake, California, Docket No. FDIC-94-182b (2-14-95).

   Bank to cease and desist from such unsafe or unsound practices as operating in violation of applicable laws or regulations. (This order was terminated by order of the FDIC dated 10-23-96. See ¶16,124.)

   [.1] Violations of Law—Eliminate/Correct
   [.2] Bank Secrecy Act—Compliance Program—Minimum Requirements
   [.3] Board of Directors—Committee to Review Compliance with Cease and Desist Order—Report to FDIC

In the Matter of

FIRST MOUNTAIN BANK
BIG BEAR LAKE, CALIFORNIA
(Insured State Nonmember Bank)
ORDER TO CEASE AND DESIST
FDIC-94-182b

   First Mountain Bank, Big Bear Lake, California ("Bank"), having been advised of its right to a Notice of Charges and of Hearing detailing the unsafe or unsound banking practices and violations of law 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 January 19, 1995, whereby solely for the purpose of this proceeding and without admitting or denying the alleged charges of unsafe or unsound banking practices and violations of law 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 engaged in unsafe or unsound banking practices and had committed violations of law 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, 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 operating in violations of the following laws, rules, and/or regulations:
   (a) Section 103 of the Rules and Regulations of the Department of Treasury, 31 C.F.R. Part 103, as more fully described on pages 2 and 2-a of the FDIC's Compliance Report of Examination as of May 16, 1994;
   (b) Section 326.8 of the Rules and Regulations of the Federal Deposit Insurance Corporation, 12 C.F.R. § 326.8, as more fully described on pages 2-a and 2-a-1 of the {{4-30-95 p.C-3933}}FDIC's Compliance Report of Examination as of May 16, 1994;
   IT IS FURTHER ORDERED, that within 60 days from the effective date of this Order, the Bank, its institution-affiliated parties, and its successors and assigns comply with the Bank Secrecy Act ("BSA") and its rules and regulations. Such compliance shall include, but is not limited to, taking the following affirmative actions:

   [.1] 1. Eliminate and/or correct all violations of the BSA and Financial Recordkeeping regulations cited in the FDIC's Compliance Report as of May 16, 1994 and take the necessary steps to ensure future compliance with all applicable laws, rules and regulations.

   [.2] 2. Develop or revise and approve a written BSA Program to include the minimum requirements as set forth in both Part 326.8 of the FDIC's Rules and Regulations and the FDIC's Statement of Policy dated June 30, 1987, entitled "Guidelines for Monitoring Bank Secrecy Act Compliance."
   In addition, the Program shall specifically include the following:

       a. A system of internal controls. The system shall be designed to identify reportable currency transactions, ensure that all required reports are completed accurately and properly filed, ensure that customer exemptions are properly granted and recorded, provide for adequate supervision of employees involved in activities covered by 31 C.F.R. Part 103 Financial Recordkeeping regulations, and establish dual controls and provide for separation of duties.
       b. Independent testing for compliance with the BSA and 31 C.F.R. Part 103. The independent testing should be conducted on an annual basis by qualified, trained, and experienced third parties, such as independent public accountants or specialists in this subject matter, who are not, in any manner, affiliated with the Bank. The testing, at a minimum, should include the following:
         (i) a test of the Bank's internal procedures for monitoring BSA;
         (ii) a sampling of large currency transactions followed by a review of the currency transaction report filings;
         (iii) a test of the validity and reasonableness of the customer exemptions granted by the Bank;
         (iv) a test of the Bank's recordkeeping system for compliance with the BSA; and
         (v) documentation of the scope of the testing procedures performed and the findings of the testing. Written reports should be prepared which document the testing results and provide recommendations for improvement and shall be presented to the Bank's board of directors and noted in official board minutes.
       c. The designation of an individual(s) responsible for coordinating and monitoring compliance with the BSA. The Bank shall designate a senior Bank official to be responsible for overall BSA compliance. This individual will be provided with the necessary training, authority, and responsibility to effectively administer the Bank's BSA program. This designation shall be noted in the minutes of the board. The Regional Manager of the FDIC's San Francisco Regional Office ("Regional Manager") shall be advised in writing of the same.
       d. Training for appropriate personnel. The Bank's training program shall provide training of tellers and other personnel who handle currency transactions. In addition, an overview of the BSA requirements shall be given to new employees and efforts made to keep executives informed of changes and new developments in BSA regulations.

   [.3] 3. The board of directors shall monitor and confirm the completion of actions taken by management to comply with the terms of this ORDER. The board shall certify in writing to the Regional Manager when all of the above actions have been accomplished. All actions taken by the board pursuant to this ORDER shall be duly noted in the minutes of its meetings.
   This ORDER shall become effective ten (10) days from 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 provisions of this ORDER shall have been modified, terminated, suspended, or set aside by the FDIC.
   Dated at San Francisco, California, this 14th day of February, 1995.
   Pursuant to delegated authority.

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

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