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


{{12-31-97 p.C-4407}}
   [11,441] In the Matter of Eastern International Bank, Los Angeles, California, Docket No. FDIC 97-79b (10-2-97).

   Bank to cease and desist from such unsafe and unsound practices.

   [.1] Bank Secrecy Act—Policy and Procedures—Independent Testing
   [.2] Bank Secrecy Act—Officer—Designate
   [.3] Bank Secrecy Act—Written Policy Required
   [.4] Financial Recording Regulations—Procedures—Develop
   [.5] Violations of Law—Eliminate/Correct
   [.6] Shareholders—Disclosures—Cease and Desist Order
   [.7] Written Progress Reports Required

In the Matter of

EASTERN INTERNATIONAL BANK
LOS ANGELES, CALIFORNIA
(Insured State Nonmember Bank)
ORDER TO CEASE AND DESIST
FDIC-97-79b

   Eastern International Bank, Los Angeles, 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 September 3, 1997, 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 the following unsafe and unsound banking practices and violations of laws, rules, and/or regulations:

    (a) operating in violation of 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 8.20 and 8.21 of the FDIC's Report of Examination as of November 25, 1996; and
    (b) operating in violation of Part 103 of the Rules and Regulations of the Department of the Treasury, 31 C.F.R. Part 103, as more fully described on page 8.21 of the FDIC's Report of Examination as of November 25, 1996.
   IT IS FURTHER ORDERED, that the Bank, its institution-affiliated parties, and its successors and assigns, take affirmative action as follows:

   [.1] 1. Within 90 days from the effective date of this ORDER, the Bank shall provide a system for independently testing its policies, procedures, and practices for compliance with the Bank Secrecy Act and the Financial Recordkeeping regulations set forth in 31 C.F.R. Part 103. The independent testing is to be conducted on an annual basis in {{12-31-97 p.C-4408}}compliance with the procedures described in the FDIC Statement of Policy entitled "Guidelines for Monitoring Bank Secrecy Act Compliance." The independent testing should be conducted 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 or any of the Bank's subsidiaries or affiliates. Written reports documenting the testing results and providing recommendations for improvement shall be presented to the Bank's audit committee.

   [.2] 2. Within 30 days from the effective date of this ORDER, the Bank shall designate a qualified full-time senior officer as a Bank Secrecy Act officer, and shall advise the Regional Director in writing of the same.

   [.3] 3. Within 60 days from the effective date of this ORDER, the Bank shall establish and implement a written internal Bank Secrecy Act compliance program which at a minimum:

       a. shall assign specific responsibilities to bank personnel;
       b. shall outline an on-going training program for appropriate bank personnel; and the training program shall be updated as needed to ensure that appropriate personnel are provided with up-to-date information;
       c. shall set forth specific written internal review procedures for monitoring compliance with the Bank Secrecy Act; and shall ensure that appropriate personnel possess the requisite knowledge necessary to comply with all applicable rules and regulations; the review procedures shall be updated as necessary and shall require that the results of internal reviews be reported to senior management;
       d. shall ensure compliance with the recordkeeping and reporting requirements for currency transactions over $10,000 (31 C.F.R. 103.22);
       e. shall ensure compliance with the recordkeeping requirements for the purchase of bank checks and drafts, cashier's checks, money orders and traveler's checks (31 C.F.R. 103.29); and
       f. shall ensure the identification and timely, accurate and complete reporting, to law enforcement and supervisory authorities, of known or suspected criminal activity perpetrated against or involving the Bank's branches, consistent with all applicable federal and state laws, rules, regulations and guidelines.

   [.4] 4. Within 30 days from the effective date of this ORDER, the Bank shall develop procedures to ensure that all changes to the Financial Recordkeeping regulations are disseminated to all appropriate personnel.

   [.5] 5. Within 60 days from the effective date of this ORDER, the Bank shall correct all violations of law described on pages 8.20 and 8.21 of the FDIC's Report of Examination as of November 25, 1996, to the extent that correction is within the Bank's capability, and implement procedures to prevent their recurrence. The Bank's actions as required by this paragraph shall be satisfactory to the Regional Director as determined at subsequent examinations and/or visitations.

   [.6] 6. Following the effective date of this ORDER, 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.

   [.7] 7. Within 30 days of the end of the calendar quarter following the effective date of this ORDER, and within 30 days of the end of each calendar quarter thereafter, the Bank shall furnish written progress reports to the Regional Director detailing the form and manner of any actions taken to secure compliance with this ORDER and the results thereof. Such reports may be discontinued when the corrections required by this ORDER have been accomplished and the Regional Director has released the Bank in writing from making further reports.
   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.
   Pursuant to delegated authority.
   Dated at San Francisco, California, this 2nd day of October, 1997.

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

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