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[¶11,738] In the Matter of Peoples Community Bank, Columbia, Alabama,
Docket No. 00-094b (9-26-00).
A cease and desist order was issued, based on findings by the FDIC that
it had reason to believe that respondent had engaged in unsafe and
unsound practices. (This order was terminated by order of the FDIC dated 11-13-01; see ¶16,293.)
[.1] Compliance ProgramMinimum Requirements
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[.2] Compliance OfficerRetain/Give Written Authority
[.3] Violations of LawCorrection of Violations Required
[.4] BonusesBonuses Restricted
[.5] ShareholdersDisclosure of Cease and Desist Order Required
In the Matter of
PEOPLES COMMUNITY BANK,
COLUMBIA, ALABAMA
(Insured State Nonmember Bank)
ORDER TO CEASE AND DESIST
FDIC-00-094b
Peoples Community Bank, Columbia, Alabama ("Insured
Institution"), having been advised of its right to a NOTICE OF
CHARGES AND OF HEARING detailing the unsafe or unsound banking
practices and violations of laws and /or regulations 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. § 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 26, 2000, whereby solely for the purpose
of this proceeding and without admitting or denying any unsafe or
unsound banking practices and violations of law and/or regulations, 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 the 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 Insured Institution, its directors,
officers, employees, agents, and other 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
and/or regulations:
(a) Operating without a qualified compliance officer; and
(b) Failing to substantially comply with federal consumer laws and
regulations to which the Insured Institution is subject, particularly
those specific items identified in the Report of Examination dated
March 8, 2000, including operating with excessive internal routine and
control deficiencies to prevent violations of federal consumer laws.
IT IS FURTHER ORDERED, that the Insured Institution, its
institution-affiliated parties, and its successors and assigns, take
affirmative action as follows:
COMPLIANCE PROGRAM
[.1] 1. Within ninety (90) days from the effective date of this ORDER, the
Insured Institution shall revise its written internal compliance
program to ensure that it addresses each consumer compliance related
regulation to which the Insured Institution is subject and provides
for, at a minimum, an annual audit or review (either internal or
external) to ensure on-going compliance with applicable consumer laws
and regulations. Further, the Insured Institution shall implement its
written internal 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, to include, at a minimum:
i) Employee training shall be conducted at the time of employment
for new employees;
ii) Employee training shall be provided at least once a year to all
employees whose duties and responsibilities include compliance with
consumer compliance regulations; and
iii) Training shall include periodic updates to review revisions and
amendments to existing laws and regulations.
c. Shall set forth specific review procedures for monitoring
compliance with applicable regulations;
d. Shall develop procedures to ensure that all changes to the
consumer regulations are disseminated to all appropriate personnel;
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e. Shall be distributed to all personnel who have compliance
responsibilities; and
f. Shall provide for the completion and presentation of a monthly
compliance report to the board of directors.
At subsequent examinations or visitations, the compliance program
and its implementation shall be evaluated to determine whether it is
satisfactory.
COMPLIANCE OFFICER
[.2] 2. Within thirty (30) days from the effective date of this ORDER,
the Insured Institution shall designate and retain a qualified
compliance officer who shall be given stated written authority by the
Insured Institution's board of directors to implement and supervise
the Insured Institution's compliance program. The qualifications and
experience of the compliance officer should be commensurate with his or
her duties and responsibilities as a compliance officer. The compliance
officer's duties shall include, but not be limited to, providing
training for the bank's employees in all applicable consumer laws and
regulations, establishing internal controls and procedures reasonably
designed to prevent violations of consumer laws, and performing and
supervising periodic internal audits to ascertain compliance with
consumer laws and regulations and/or the Insured Institution's
compliance program. The compliance officer shall also be accorded the
time, training, and resources necessary to administer an effective
compliance program. The compliance officer shall report directly to the
board of directors and the minutes of the meeting of the board of
directors shall reflect the approval of the activities of the
compliance officer. The Insured Institution shall advise the Regional
Director of the Atlanta Regional Office of the FDIC ("Regional
Director") of the designation of the compliance officer.
VIOLATIONS OF LAW
[.3] 3. Within one hundred twenty (120) days from the effective date of this
ORDER, the Insured Institution shall correct all violations of law
described in the FDIC's Compliance Report of Examination
("Report") as of March 8, 2000, and implement procedures to
prevent their recurrence. The Insured Institution's actions as
required by this paragraph shall be satisfactory to the Regional
Director as determined at subsequent examinations and/or visitations.
The Insured Institution shall, within one hundred twenty (120) days
from the effective date of this ORDER:
a. Comply with all provisions of Regulations B (12 C.F.R. Part
202), C (12 C.F.R. Part 203), DD (12 C.F.R. Part 230), and Z (12 C.F.R.
Part 226) of the Board of Governors of the Federal Reserve System. Such
compliance shall include correction of all items noted in the Report
dated March 8, 2000. Such compliance shall incorporate appropriate
training of personnel as set forth in paragraph 1 of this ORDER.
b. Comply with all provisions of Part 339 of the FDIC's Rules and
Regulations, 12 C.F.R. Part 339 (Flood Insurance). Such compliance
shall include the corrections of all items identified in the March 8,
2000, Report. Such compliance shall incorporate appropriate training of
personnel as set forth in paragraph 1 of this ORDER.
c. Comply with all provisions of Regulation X of the Department of
Housing and Urban Development (Real Estate Settlement Procedures Act),
24 C.F.R. § 3500. Such compliance shall include the corrections of
all items identified in the Report dated March 8, 2000. Such compliance
shall incorporate appropriate training of personnel as set forth in
paragraph 1 of this ORDER.
EMPLOYEE BONUSES
[.4] 4. For the duration of this ORDER, the Insured Institution shall
take into consideration an employee's level of compliance with the
applicable consumer law and regulations prior to the payment of any
bonuses.
REPORTS
5. a. On or before the tenth day after the end of the first
calendar quarter following the effective date of this ORDER, and on or
before the tenth day after the end of every calendar quarter
thereafter, the Insured Institution shall furnish written progress
reports to the Regional Director which detail the form and manner of
any actions taken to secure compliance with this ORDER and the results
thereof. In addition to these written progress reports, the Insured
Institution shall provide to the Regional Director copies of the
monthly compliance report required by this ORDER and signed by the
board of directors following their review.
b. The monthly compliance reports required to be completed and
presented to the
{{11-30-00 p.C-5004}}board of directors pursuant to this ORDER shall
detail, at a minimum:
1. scheduled review procedures;
2. procedures performed if different than those scheduled;
3. reasons for any deviation from the performance of the scheduled procedures;
4. the number of transactions actually reviewed;
5. the number and nature of violations;
6. names of Insured Institution personnel associated with the violations;
7. the reason for the violations;
8. the measures taken to correct violations;
9. training performed and names of attendees;
10. names of those scheduled for training but who failed to attend; and
11. plan to provide training for those who failed to attend scheduled
training.
c. The Insured Institution may discontinue submitting reports
required pursuant to this ORDER when the corrections required by this
ORDER have been accomplished and the Regional Director has expressly
released the Insured Institution in writing from making any further
reports.
SHAREHOLDER NOTICE
[.5] 6. Following the effective date of this ORDER, the Insured Institution
shall send to its shareholders or otherwise furnish a description of
this ORDER (i) in conjunction with the Insured Institution's next
written shareholder communication, and (ii) in conjunction with its
notice or proxy statement preceding the Insured Institution's next
shareholder meeting. The description shall fully describe this ORDER in
all material respects. The description and any accompanying
communication, statement or notice shall be sent to the FDIC,
Registration and Disclosure Section, 550 17th Street, N.W., Washington,
D.C. 20429, for review at least twenty (20) days prior to dissemination
to shareholders. Any changes requested to be made by the FDIC shall be
made prior to dissemination of the description, communication, notice
or statement.
EFFECTIVE DATE
7. This ORDER shall become effective ten (10) days from the date
of its issuance. The provisions of this ORDER shall be binding upon the
Insured Institution and its institution-affiliated parties, successors
and assigns. 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.
Pursuant to delegated authority.
Dated at Atlanta, Georgia, this 26th day of September, 2000.