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   [5177] In the Matter of Charles E. Floyd, Adair State Bank, Adair, Oklahoma, Docket No. FDIC-87-178e (4-16-92).

   FDIC Board denies request for reconsideration of denial of Respondent's application to return to Bank employment after an order of prohibition.

   [.1] Prohibition, Removal, or Suspension—Notice
   Respondent who executed a stipulation agreeing to his prohibition from Bank service cannot assert four years later that he had not read the notice.

   [.2] Prohibition, Removal, or Suspension—Application for Reemployment
   Person seeking to re-enter banking after prohibition must present evidence of rehabilitation showing that he has occupied positions of trust, that he could secure fidelity bond coverage, and that he has the approval of a banking commissioner or letters attesting to his good character.

In the Matter of
CHARLES E. FLOYD
ADAIR STATE BANK
ADAIR, OKLAHOMA
(Insured State Nonmember Bank)
DECISION AND ORDER
DENYING REQUEST FOR
RECONSIDERATION FOR
APPROVAL OF SERVICE AS
BANK EMPLOYEE

FDIC-87-178e

STATEMENT OF THE CASE

   On November 12, 1991, Charles E. Floyd ("Floyd" or "Respondent"), a former officer and director of the Adair State Bank, Adair, Oklahoma ("Bank"), requested by letter that the Order of Prohibition from Further Participation entered against him on July 22, 1988 be modified or rescinded by the Federal Deposit Insurance Corporation ("FDIC") in order that he be allowed to be reinstated to banking. This request was denied by the FDIC but Respondent was given an opportunity to request reconsideration by March 21, 1992. On March 20, 1992, Respondent Floyd requested that the FDIC reconsider the denial of his application. This application and the request for reconsideration arise under section 8(e)(7)(B) and 8(j) of the Federal Deposit Insurance Act ("Act"), 12 U.S.C. §§ 1818(e)(7)(B) and (j) and 12 C.F.R. § 303.6(e).

Background

   A Notice of Intention to Prohibit From Further Participation ("Notice") against {{6-30-92 p.A-1977}}Floyd was issued by the FDIC on January 19, 1988. A copy of the Notice was sent to Respondent's post office box. A certificate of receipt was signed by Floyd on or about January 27, 1988, evidencing that Respondent Floyd received a copy of the Notice. A copy of the certificate of receipt is attached and made a part hereof as Exhibit A. On February 22, 1988, Floyd through his attorney requested a two week extension to file an answer to the Notice; and the Office of Executive Secretary pursuant to section 308.06 of the FDIC's Rules of Practice and Procedures (1988) granted an extension of time until March 1, 1988 to file an answer. A copy of the Application for Extension of Time is attached hereto and made a part hereof as Exhibit B. On March 2, 1988 a Stipulation and Order of Prohibition from Further Participation were provided Respondent by and through his attorney, Christopher B. Lyons of the law firm of Lyons and Lyons, Prior, Oklahoma. On March 8, 1988, Respondent Floyd executed the Stipulation which was then signed by the Regional Counsel for the Dallas Regional Office, Judith K. Sinclair. The Stipulation and Order of Prohibition from Further Participation were forwarded to Washington, D.C. on March 10, 1988, for legal review and approval by the FDIC. On July 22, 1988, the Order of Prohibition from Further Participation ("Order of Prohibition") was issued by the FDIC. The Order of Prohibition prohibited Respondent Floyd from participating in the conduct of the affairs of the Bank or any other FDIC insured institution without the prior written consent of the FDIC.

The Application

   By letter dated November 12, 1991, Respondent Floyd requested that the Order of Prohibition be modified or rescinded and that he be allowed to return to banking. By letter dated March 6, 1992, the FDIC denied his request for reinstatement but stated that Floyd had fifteen days to file a petition for reconsideration of the denial pursuant to 12 C.F.R. § 303.6(e).
   Floyd filed his request for reconsideration by letter dated March 20, 1992 ("Request for Reconsideration"). In this letter Floyd argued that he was requesting reconsideration because he had never seen a copy of the Notice prior to receiving the March 6, 1992 denial of his application to rescind or modify the Order of Prohibition. Since he asserted that this was the first time he had ever seen the Notice, Floyd also disputed the allegations in the Notice, paragraph by paragraph. Finally, in his Request for Reconsideration, Respondent Floyd argued that all monies taken by the former chairman of the board of directors of the Bank, Harold E. Dunham, have been returned to the Bank and that the bond claim has been paid to the Bank. Accordingly, Floyd concluded that, since the Bank had been made whole, he should be permitted to enter the banking industry.

FINDINGS OF FACT

   While Floyd stated in his Request for Reconsideration that the first time he had seen the Notice and the charges that formed the basis of the FDIC's Order of Prohibition against him was when he received the FDIC's March 6, 1992 denial, Floyd admitted that "[t]his (the Notice) may have been sent to me in 1988 and given directly to my attorney at the time, ...[but] this is the first time that I personally have read the basis for your order." (Emphasis supplied.) However, the Application for Extension of Time filed by Floyd's attorney stated that the Notice of Intention of Prohibit from Further Participation was received on or about January 27, 1988, and that the Notice was tendered to Floyd's attorney approximately two weeks later on February 12, 1988. See Exhibit B, Paragraph Nos. 1 and 2.
   Based on the above and taking the facts in the light most favorable to the applicant, the Director of the Division of Supervision ("Director") concludes for purposes of this application that Respondent Floyd received a copy of the Notice on January 27, 1988, and that he did not tender a copy of the Notice to his attorney until approximately two weeks after he had received the Notice.

DECISION AND ORDER

   Upon review of the record as a whole, the Director finds that Mr. Floyd has failed to present any evidence or persuasive argument which meets his burden for petitioning the Director for reconsideration pursuant to 12 C.F.R. § 303.6(e).
   12 C.F.R. § 303.6(e) provides in pertinent part as follows:

    (e) Opportunity to petition for reconsideration of a denied application, petition or other request. (1) Within 15 days of its
    {{6-30-92 p.A-1978}}receipt of notice that its application, petition, or other request has been denied, any applicant may petition the FDIC for reconsideration of such application, petition, or request (except an application, petition or request already previously denied upon reconsideration). The petition must be in writing and should (i) specify reasons why the FDIC should reconsider its action and (ii) set forth relevant, substantive information that for good cause was not previously set forth in the application, petition or request to be reconsidered.
   To meet this burden, Respondent Floyd merely asserted in his Request for Reconsideration that he had never seen a copy of the Notice setting forth the allegations that formed the basis of the FDIC's Order of Prohibition against him until he received the FDIC's March 6, 1922 denial of his initial application requesting modification or rescinding of the Order of Prohibition. Floyd then proceeded to refute the allegations in the Notice.

   [.1] The Director concludes that Respondent Floyd can not now be heard to complain that he never saw or read the Notice, or that he had ineffective counsel. The record shows that Floyd received a copy of the Notice, and that he executed a Stipulation in which he specifically waived his rights to the following: (1) to raise all defenses to the charges alleged in the Notice; (2) to a hearing on the record for the purpose of taking evidence on the charges alleged in the Notice; (3) to the filing of proposed findings of fact and conclusions of law; (4) to the issuance of a recommended decision of an administrative law judge; and (5) to the filing of exceptions and briefs with respect to such a recommended decision. The burden of reading the allegations in the Notice is upon Respondent.

   [.2] In his Request for Reconsideration, Floyd never presented any evidence of rehabilitation showing that he has occupied positions of trust since the Order of Prohibition issued against him. He has made no showing that a bonding company would issue fidelity bond coverage for him if he held a position of trust in an insured depository institution, and he has no letters of recommendation from the community attesting to his character or from a banking commissioner approving him to hold a position in banking.
   Thus, upon consideration of all record evidence, the Director of the Division of Supervision of the FDIC finds that there has been no demonstration that the return of Respondent Floyd to banking is warranted. On the contrary, it appears that such a return would be likely to undermine public confidence in the banking system and the regulatory process.
   Accordingly, the Request for Reconsideration dated March 20, 1992, is hereby denied.
   Dated at Washington, D.C. this 16th day of April, 1992.
   Pursuant to delegated authority.

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