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FDIC Enforcement Decisions and Orders

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   [11,325]In the Matter of Commonwealth Thrift and Loan Association, Torrance, Calif., Docket No. FDIC-96-104b (7-31-96)

   Bank to cease and desist from such unsafe and unsound practices as operating with inadequate equity capital and reserves and operating with a large volume of poor quality assets. (Editor's Note: This order was terminated by order of the FDIC dated 11-8-96. See ¶16,131.)

   [.1]Receivables—Acquisition or Sale Restricted
   [.2]Transactions—Restricted
   [.3]Payments—Restricted
   [.4]Credit Card Operations—Receivable Accounts—Documentation Required

In the Matter of

COMMONWEALTH THRIFT AND
LOAN ASSOCIATION

TORRANCE, CALIFORNIA
(Insured State Nonmember Bank)
FDIC-96-104b
ORDER TO CEASE AND DESIST

   Commonwealth Thrift and Loan Association, Torrance, California ("Insured Institution"), having been advised of its right to a Notice of Charges and of Hearing detailing the unsafe or unsound banking practices alleged to have been committed by the Insured Institution 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. § 1828(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 July 23, 1996, whereby solely for the purpose of this proceeding and without admitting or denying the alleged charges of unsafe or unsound banking practices, the Insured Institution 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 Insured Institution had engaged in unsafe or unsound banking practices. The FDIC, therefore, accepted the CONSENT AGREEMENT and issued the following:

ORDER TO CEASE AND DESIST

   IT IS HEREBY ORDERED, that the Insured Institution, 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 the following unsafe and unsound banking practices:
   (a) operating with inadequate equity capital and reserves in relation to the volume and quality of assets held by the Insured Institution; and
   (b) operating with a large volume of poor quality assets.
   IT IS FURTHER ORDERED, that the Insured Institution, its institution-affiliated parties, and its successors and assigns, take affirmative action as follows:

   [.1] 1. As of the effective date of this ORDER, the Insured Institution shall not engage in any acquisition or sale of any receivables, including credit card receivables, without first receiving the prior written approval of the FDIC.

   [.2] 2. As of the effective date of this ORDER, the Insured Institution shall not engage in any transaction or activity with Founder's Asset Management or LNM Trust without first receiving the prior written approval of the FDIC.

   [.3] 3. As of the effective date of this ORDER, the Insured Institution shall not make any payments to The Conte Co., Founder's Asset Management or LNM Trust without the prior written approval of the FDIC.

   [.4] 4. Within 30 days of the effective date of this ORDER, the Insured Institution shall take all feasible steps to document credit card receivable accounts acquired from Founder's Asset Management, LNM Trust and/or The Conte Co. Such documentation shall include evidence of authorized promissory notes, credit reports and credit histories.
   This ORDER shall become effective ten (10) days from the date of its issuance.
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   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.
   Pursuant to delegated authority.
   Dated at San Francisco, California, this 31st day of July, 1996.

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