Federal Deposit
Insurance Corporation

{{10-31-99 p.A-2995}}
   [¶5254] In the Matter of Donald E. Witt, Individually and as an executive officer and director of Firstar Bank Portage, Portage, Wisconsin (Insured State Nonmember Bank) FDIC Docket No. 95-165e, FDIC Docket No.98-101ej (3-11-99)

   The FDIC denied Respondent's request to modify an Order of Prohibition from Further Participation to allow Respondent the right to vote his bank shares and any {{5-31-99 p.A-2994}}additional shares he might purchase finding that modifications must be examined individually and therefore such blanket requests are not proper.

   [.1] Burden of Proof—Motion to Modify Order of Prohibition
   Respondent must demonstrate his fitness to participate in affairs of the bank and that his participation will not erode public confidence in the institution or pose a risk to the Bank's safety and soundness.

   [.2] Prohibition, Removal or Suspension—Voting Rights, Exercise Denied
   Voting comes within the prohibitions of the prohibition order and to modify such order the FDIC considers factors including the number of shares outstanding, the relationship of the respondent and the other shareholders and the issues on which respondent seeks to vote. In light of such considerations, a blanket approval to allow respondent to vote his shares is denied.

In the Matter of
DONALD E. WITT
individually and as an executive
officer and director of
FIRSTAR BANK PORTAGE
PORTAGE, WISCONSIN
(Insured State Nonmember Bank)
DECISION AND ORDER
DENYING APPLICATION TO
MODIFY ORDER OF PROHIBITION
FROM FURTHER PARTICIPATION
FDIC-95-165e
FDIC-98-101ej

A. Introduction:
   On October 20, 1998, the Federal Deposit Insurance Corporation ("FDIC") received a letter on behalf of Donald E. Witt ("Respondent") from his attorney requesting that the FDIC modify the Order of Prohibition From Further Participation, docket number FDIC-95-165e ("Order of Prohibition"), issued against him on May 14, 1996. The letter requested that Respondent be permitted to vote his existing bank stock and, additionally, be permitted to vote any other bank stock which he may purchase. Respondent presently owns 7,150 shares of Firstar Bank stock, 525 shares of Bank of Wisconsin Dells stock and 1,000 shares of Baraboo National Bank stock. The letter stated that each of these holdings represents less than one percent of outstanding stock in each insured depository institution. If granted, the request would require the modification of the Order of Prohibition, issued in connection with Respondent's activities at Firstar Bank Portage, Portage, Wisconsin ("Bank").

B. Background:
   Prior to 1994, Respondent was president and chairman of the board of directors of the Bank. Respondent resigned in December 1994. In November 1995, the FDIC considered initiating actions to prohibit Respondent from further participation in the conduct of the affairs of any insured depository institution and to assess civil money penalties. The proposed actions were predicated upon Respondent's concealing and misrepresenting to the FDIC that violations of Regulation Z of the Board of Governors of the Federal Reserve System ("Regulation Z"), 12 C.F.R. Part 226, had been corrected and reimbursements made to the Bank's customers for the violations. On March 14, 1996, Respondent entered into a Stipulation and Consent to the Issuance of an Order of Prohibition from Further Participation ("Consent Agreement") and paid $65,000 in civil money penalties. On May 14, 1996, the FDIC issued the Order of Prohibition, which became effective thirty (30) days later.
   Respondent stated in his letter that he is not associated with any banking organization and has no desire to work in the banking business again. Currently Respondent is {{10-31-99 p.A-2996}} a consultant for Lloyd's of London and his stated desire is to be an investor in insured depository institutions since his background in banking provides him with a better ability to invest his money in banks than with other corporations.

   The FDIC has reviewed the facts and circumstances leading to Respondent's March 14, 1996 Consent Agreement and the May 14, 1996 Order of Prohibition. The record reveals that the Chicago Regional Office received a complaint in January 1994, about reimbursements that the Bank was required to make for violations of the Truth In Lending Act ("TILA"). As a result of the complaint, the Regional Office undertook an investigation beginning in January 1994. The investigation revealed that the Bank had not made a bona fide reimbursement to its customers as had been represented to the FDIC. Instead, the Bank had requested that customers endorse the checks back to the Bank. Of the 143 checks mailed by the Bank to customers, 128 had endorsed their checks back to the Bank. Only 15 customers actually cashed or deposited their checks.
   In November 1995, the FDIC considered the issuance of prohibition and civil money penalty actions pursuant to sections 8(e) and 8(i) of the Federal Deposit Insurance Act, 12 U.S.C. §§ 1818(e) and 1818(i), respectively, against Mr. Witt. On or about March 14, 1996, Mr. Witt stipulated to both actions and paid $65,000 in civil money penalties before the actions were issued. On May 14, 1996, the FDIC issued a prohibition order against Mr. Witt.
   Section 8(e)(7)(B) of the Federal Deposit Insurance Act as amended, which establishes the requirement for FDIC consent, provides in pertinent part:

If on or after the date an order is issued under this subsection which removes or suspends from office any institution-affiliated party or prohibits such party from participating in the conduct of the affairs of an insured depository institution, such party receives the written consent of —
   (i) the agency that issued such order; and
   (ii) the appropriate Federal financial institutions regulatory agency of the institution described in any clause of Subparagraph (A) with respect to which such party proposes to become an institution-affiliated party, subparagraph (A) shall, to the extent of such consent, cease to apply to such party with respect to the institution described in each written consent.

   [.1] To meet this burden the Respondent must, inter alia, demonstrate: (1) his fitness to participate directly or indirectly in the conduct of the affairs of an insured depository institution; (2) that his participation would not pose a risk to the institution's safety and soundness; and (3) that his participation would not erode public confidence in the institution. See In the Matter of Michael D. McCormick, FDIC Enforcement Decisions and Orders, FDIC-92-248e, ¶ 5212, A-2408 (1994).