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{{1-31-95 p.C-2293}}
[¶10,539] In the Matter of Riverside Bank, Poughkeepsie, New York, Docket No. FDIC-92-145b (5-19-92).
Bank to cease and desist from such unsafe or unsound practices as following hazardous lending and lax collection practices; operating with inadequate capital; operating with an excessive level of poor quality assets; operating with inadequate allowance for loan and lease losses; operating with inadequate provisions for liquidity and funds management; operating without proper internal routine and controls; operating in such a manner as to produce low earnings; operating with excessive concentrations of credit; operating in violation of applicable laws or regulations; operating with management whose policies are detrimental to the Bank; entering into "golden parachute" agreements with officers; failing to provide adequate supervision over the Bank's affairs; and operating with an excessive reliance on volatile funding (This order was terminated by order of the FDIC dated 11-30-94; see ¶ 15,941.).
[.1] Management—Qualifications—Review
[.2] Capital—Tier 1 Capital—Increase/Maintain—Methods
[.3] Assets—Adversely Classified—Eliminate/Reduce
[.4] Loans—Extensions of Credit—Existing Borrowers—Curtail
[.5] Lending and Collection Policy—Minimum Requirements
[.6] Problem Assets—Individual Written Plans Required
[.7] Loan Portfolio—Diversification Required
[.8] Allowance for Loan and Lease Losses—Establish/Maintain
[.9] Budget and Earnings Forecast—Preparation Required
[.10] Violation of Law—Eliminate/Correct
[.11] Bank Operations—Internal Routine and Controls—Written Policy Required
[.12] Liquidity and Funds Management—Policy Required
[.13] Dividends—Restricted
[.14] Brokered Deposits—Limits on Acceptance
[.15] Compensation—"Golden Parachute"—Prohibited
[.16] Shareholders—Disclosure—Cease and Desist Order
[.17] Board of Directors—Committee to Review Compliance with Cease and Desist Order
[.18] Compliance Reports—Frequency
In the Matter of
RIVERSIDE BANK
POUGHKEEPSIE, NEW YORK
(Insured State Nonmember Bank)
ORDER TO CEASE AND DESIST
FDIC-92-145b
Riverside Bank, Poughkeepsie, New York,
{{1-31-95 p.C-2294}}("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) of the Federal Deposit Insurance Act ("Act'), 12 U.S.C. § 1818(b), 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 May 19, 1992, 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 successors, assigns, directors, officers, employees, agents, and other "institution-affiliated parties," as defined in section 3(u) of the Act, 12 U.S.C. § 1813(u), CEASE AND DESIST from the following unsafe or unsound banking practices and violations:
(a) Engaging in hazardous lending and lax collection practices;
(b) Operating the Bank with inadequate capital in relation to the kind and quality of assets held by the Bank;
(c) Operating the Bank with an excessive volume of poor quality assets;
(d) Operating the Bank with an inadequate allowance for loan and lease losses;
(e) Operating the Bank with inadequate liquidity and funds management;
(f) Operating the Bank with inadequate routine and controls;
(g) Operating the Bank in such a manner as to produce unsatisfactory earnings;
(h) Operating the Bank with an excessive concentration of credits to borrowers involved in real estate development, construction and/or speculation;
(i) Engaging in violations of applicable Federal and State laws and/or regulations;
(j) Operating the Bank with management whose policies and practices are detrimental to the Bank and jeopardize the safety of its deposits;
(k) Entering into agreements with and/or making payments to present and former officers which provide for and/or results in payments which constitute "golden parachute payments", as defined in section 18(k)(4) of the Act, 12 U.S.C. § 1828(k)(4);
(l) Operating the Bank with a board of directors which has failed to provide adequate supervision over and direction to the operating management of the Bank; and
(m) Operating the Bank with an excessive reliance upon volatile funding.
IT IS FURTHER ORDERED that the Bank take AFFIRMATIVE action as follows:
[.1] 1. (a) The Bank shall have and retain qualified management. Each member of management shall have qualifications and experience commensurate with his or her duties and responsibilities at the Bank. The qualifications of management shall be assessed on its ability to:
(i) comply with the requirements of this ORDER;
(ii) operate the Bank in a safe and sound manner;
(iii) comply with all applicable laws and regulations; and
(iv) restore all aspects of the Bank to a safe and sound condition, including capital adequacy, asset quality, management effectiveness, earnings and liquidity.
(b) (i) During the life of this ORDER, the Bank shall notify the Regional Director of the New York Regional Office of the FDIC ("Regional Director") and the Superintendent of Banks for the State of New York ("Superintendent") in writing of any resignations and/or terminations of any member of its board of directors and/or any of its senior executive officers.
(ii) The Bank shall comply with section 32 of the Act, 12 U.S.C. § 1831i, which includes a requirement that the Bank shall notify the Regional Director and the Superintendent in writing at least 30 days prior to any individual assuming a new position as a senior executive
{{7-31-92 p.C-2295}}officer or any additions to its board of directors.
(c) To facilitate having and retaining qualified management, the Bank's board of directors shall, within 15 days from the effective date of this ORDER, appoint a committee with at least three members, composed of directors who are not now, and never have been, involved in the daily operations of the Bank ("Outside Directors"), and whose composition is acceptable to the Regional Director and the Superintendent (the "Committee"). The Committee shall, immediately upon being appointed, undertake an in-depth analysis of the Bank's managerial requirements. This analysis shall include a review of the composition, policies, and practices of the Bank's current operating management, and consideration of whether current operating management should be changed, or the terms and conditions under which current operating management should be continued. As part of this review, the Committee shall evaluate each bank officer to determine whether these individuals possess the ability, experience and other qualifications required to perform present and anticipated duties, including adherence to the Bank's established policies and practices, and maintenance of the Bank in a safe and sound condition.
(d) Within 90 days from the effective date of this ORDER, the Committee referenced in paragraph 1(c) of this ORDER shall prepare and present to the board of directors of the Bank shall review the Committee's report and evaluate its current operating management in light of such report, and shall take whatever action is necessary to implement its determinations. A copy of the Committee's report, as well as the board of directors' evaluation, determinations, and implementing actions, shall be submitted to the Regional Director and the Superintendent within 120 days from the effective date of this ORDER.
[.2] 2. (a) By not later than December 31, 1992, the Bank shall have adjusted Tier 1 capital equal to or greater than 6 percent of the Bank's adjusted Part 325 total assets. Thereafter, during the life of this ORDER, the Bank shall maintain adjusted Tier 1 capital equal to or greater than 6 percent of the Bank's adjusted Part 325 total assets.
(b) Any increase in Tier 1 capital necessary to meet the ratio required by paragraph 2(a) of this ORDER may be accomplished by the following:
(i) the sale of new securities in the form of common stock; or
(ii) the direct contribution of cash by the directors, shareholders, or parent bank holding company of the Bank; or
(iii) any combination of the above or other method acceptable to the Regional Director and the Superintendent.
(c) If all or part of the increase in Tier 1 capital required by paragraph 2(a) of this ORDER is accomplished by the sale of new securities, the board of directors of the Bank shall forthwith adopt and implement a plan for the sale of such additional securities, including the voting of any shares owned or proxies held or controlled by them in favor of the plan. Should the implementation of the plan involve a public distribution of Bank securities (including a distribution limited only to the Bank's existing shareholders), the Bank shall prepare offering materials fully describing the securities being offered, including an accurate description of the financial condition of the Bank and the circumstances giving rise to the offering, and any other material disclosures necessary to comply with Federal and State securities laws. Prior to the implementation of the plan and, in any event, not less than 20 days prior to the dissemination of such materials, the plan and any materials used in the sale of the securities shall be submitted to the FDIC, Registration and Disclosure Section, Washington, D.C. 20429, and the New York State Banking Department ("Department"). Any changes requested to be made in the plan or materials by the FDIC or the Department shall be made prior to their dissemination.
(d) In complying with the provisions of paragraph 2 of this ORDER, the Bank shall provide to any subscriber and/or purchaser of Bank securities written notice of any planned or existing development or other changes which are materially used in connection with the sale of Bank securities. The written notice required by this paragraph shall be furnished within 10 calendar days from the date such material
{{7-31-92 p.C-2296}}development or change was planned or occurred, whichever is earlier, and shall be furnished to every subscriber and/or purchaser of Bank securities who received or was tendered the information contained in the Bank's original offering materials.
(e) For the purposes of this ORDER, the terms "Tier 1 capital" and "Part 325 total assets" shall have the meanings ascribed to them in Part 325 of the FDIC's Rules and Regulations, respectively sections 325.2(m) and 325.2(n), 56 Fed. Reg. 10,154, 10,161 (1991) (to be codified at 12 C.F.R. §§ 325.2(m) and (n)). Tier 1 capital and Part 325 total assets shall be adjusted by deducting fifty percent of assets classified "Doubtful" in determining the ratio of adjusted Tier 1 capital to adjusted Part 325 total assets as required by this ORDER.
(f) The Bank shall lend funds directly or indirectly, whether secured or unsecured, to any purchaser of Bank stock or to any investor by any other means for any portion of any increase in Tier 1 capital required herein.
[.3] 3. Within 10 days from the effective date of this ORDER, the Bank shall eliminate from its books, by collection or charge-off, all assets or portions of assets classified "Loss" and 50 percent of all assets or portions of assets classified "Doubtful" by the FDIC and the Superintendent as a result of their examinations of the Bank as of July 29, 1991 and June 30, 1991, respectively, which have not been previously charged-off or collected. In addition, and so long as this ORDER remains in effect, the Bank shall, within 30 days from the receipt of any subsequent Report of Examination of the Bank from the FDIC or the Superintendent, eliminate from its books, by collection or charge-off, all assets or portions of assets classified "Loss" and 50 percent of all assets or portions of assets classified "Doubtful" in said Reports of Examination. Elimination of these assets through the use of the proceeds of loans or other extensions of credit made by the Bank does not constitute collection for the purposes of this ORDER.
4. (a) By not later than December 31, 1992, the Bank shall reduce the remaining total of all assets classified "Doubtful" and "Substandard" by the FDIC and the Superintendent as a result of their examinations of the Bank as of July 29, 1991 and June 30, 1991, respectively, to not more than 150 percent of the total of Tier 1 capital and its Allowance for Loan and Lease Losses. By not later than June 30, 1993, the Bank shall reduce the total of such assets to not more than 100 percent of the total of Tier 1 capital and its Allowance for Loan and Lease Losses.
(b) As used in this ORDER, the word "reduce" means (1) to collect, (2) to charge off, or (3) to improve the quality of adversely classified assets sufficiently to warrant removing any adverse classification, as determined by the FDIC and the Superintendent. Reduction of these assets through the use of the proceeds of loans or other extensions of credit made by the Bank does not constitute collection for the purposes of this ORDER.
[.4] 5. (a) Immediately upon the effective date of this ORDER, the Bank shall not extend, either directly or indirectly, any new or additional credit (which, for the purposes of this ORDER, shall include the granting of renewals or extensions, or the capitalizing of accrued interest) to, or for the benefit of, any borrower who is obligated in any manner to the Bank on any extension of credit, or portion thereof, which has been charged off the books of the Bank in whole or in part, or to any affiliate or related interest of, or other person or entity associated with, any such borrower, so long as any portion of such extension of credit, whether or not that portion was charged off, remains uncollected. The provisions of this paragraph 5(a) shall not apply to the advance of funds by the Bank for the sole purpose of maintaining or protecting the Bank's real estate collateral for any extension of credit, up to a maximum amount of $50,000 in the aggregate for all such advances, with respect to each real estate property securing, in whole or in part, all such extensions of credit.
(b) Immediately upon the effective date of this ORDER, the Bank shall not extend, directly or indirectly, any new or additional credit to, or for the benefit of, any borrower who is obligated in any manner to the Bank on any loan or other extension of credit that has been adversely classified, in whole or in part, by the FDIC and the Superintendent as a result of their examinations of the Bank as of July 29, 1991 and June 30, 1991, respectively, or
{{7-31-92 p.C-2297}}as a result of any subsequent examination of the Bank by the FDIC or the Superintendent, or to any affiliate or related interest of, or other person or entity associated with, any such borrower ("classified borrower"), so long as such loan or other extension of credit remains classified or is uncollected. This paragraph 5(b) shall not prohibit the Bank from renewing all or any part of an extension of credit to a classified borrower who is not subject to the prohibitions of paragraph 5(a) of this ORDER, after collection in cash of interest due on the entire extension of credit. The prohibitions of this paragraph 5(b) shall not apply to any extension of credit to a classified borrower who is not subject to the prohibitions of paragraph 5(a) of this ORDER, if:
(i) the Bank's failure to extend further credit to a classified borrower would be substantially detrimental to the best interests of the Bank;
(ii) a comparison with the written program adopted pursuant to paragraph 7 of this ORDER shows that the Bank's formal program to eliminate the basis of criticisms of said criticized asset is not compromised; and
(iii) prior to extending any credit, a majority of the Bank's full board of directors approves the extension of credit and certifies, in writing, the specific reasons why failure to so act would be substantially detrimental to the best interests of the Bank. A copy of the board of directors' certification shall be maintained in the credit file of the classified borrower. A copy shall also be forwarded to the Regional Director and the Superintendent.
[.5] 6. Within 60 days from the effective date of this ORDER, the Bank shall revise, adopt, and implement written lending and collection policies and procedures to provide effective guidance and control over the lending function of the Bank. A copy of the proposed policy shall be forwarded to the Regional Director and the Superintendent for review. The policy shall include, but should not be limited to, the following:
(a) Establishment of a nonaccrual loan policy, which complies with Call Report Instructions for loans past due 90 days or more;
(b) Standards for extending credit to Bank directors, officers, shareholders and their related interests which take into account applicable Federal and State laws and regulations governing such extensions of credit;
(c) A provision that establishes lending limits for each loan officer and procedures for the approval of loans in excess of these limits;
(d) A requirement that all loans in excess of a specified amount shall be reviewed by the receive the prior approval of the board of directors of the Bank;
(e) A requirement that all loans shall have a declared source of repayment and a written repayment schedule;
(f) The establishment of minimum credit standards;
(g) Guidelines under which loans may be renewed or have their due dates extended (i) without full collection of interest thereon, and (ii) by acceptance of separate notes in payment of interest, unless prohibited by paragraph 5 of this ORDER;
(h) Limitations on the amount of advances in relation to the value of collateral securing the credit, and a description of the documentation required by the Bank for each type of secured credit;
(i) Standards which ensure that all required documentation, including that associated with collateral, has been received prior to disbursement of loan proceeds;
(j) Standards under which unsecured loans may be granted;
(k) A listing of types of loans which are permitted and those which are prohibited;
(l) A provision to the effect that deviations from the written lending policies and procedures shall require the prior approval of the board of directors of the Bank;
(m) A provision specifically setting forth the Bank's concentrations of credit policy, which shall include the methodology set forth in the Plan adopted and implemented pursuant to paragraph 8 of this ORDER;
(n) A provision specifically setting forth the Bank's real estate appraisal policy, which shall comply with the requirements
{{7-31-92 p.C-2298}}of the FDIC's Rules and Regulations 12 C.F.R. Part 323;
(o) A provision specifically setting forth the Bank's real estate construction loan policy, which shall include guidelines, standards and limitations on the level and type of real estate construction lending;
(p) A provision specifically outlining the collection procedures to be taken by the Bank when borrowers fail to make timely payments;
(q) Guidelines for the approval and processing of all overdrafts; and
(r) Guidelines for the determination of loan product pricing.
All references to "loans" shall be deemed to include all other forms of extensions of credit.
[.6] 7. (a) Within 60 days from the effective date of this ORDER, the board of directors of the Bank shall adopt and implement a written program with regard to each asset equal to or in excess of $100,000 criticized by the FDIC and the Superintendent as a result of their examinations of the Bank as of July 29, 1991 and June 30, 1991, respectively, so as to eliminate the basis of criticism of each such asset. This program shall include, but should not be limited to, an assessment of the status of each criticized asset, the proposed action for eliminating the basis of criticism, and the time frame for its accomplishment. Once all such programs are adopted, a copy of the program for each criticized asset which equals or exceeds $100,000 shall be forwarded to the Regional Director and the Superintendent. Furthermore, while this ORDER is in effect, the Bank's board of directors shall, within 30 days following receipt of any Report of Examination of the Bank from the FDIC or the Superintendent, adopt and implement written programs, as specified above, for any assets criticized in said Reports, and forward copies of such programs to the Regional Director and the Superintendent. For the purposes of this ORDER, the term "criticized asset" means any asset, or portion thereof, scheduled as "Special Mention", "Substandard", or "Doubtful" in any Report of Examination of the Bank by the FDIC or the Superintendent.
(b) The Bank's board of directors shall conduct a review of each program adopted pursuant to paragraph 7(a) of this ORDER on at least a monthly basis, to determine:
(i) the status of each criticized asset;
(ii) management's adherence to each written program;
(iii) the status and effectiveness of each written program; and
(iv) the need to revise each written program and/or take other actions.
The board shall send quarterly progress reports on the status of each criticized asset equal to or exceeding $100,000 to the Regional Director and the Superintendent.
[.7] 8. Within 60 days from the effective date of this ORDER, the Bank's board of directors shall adopt and implement a plan to increase the diversification of the Bank's asset portfolio ("Plan"). Specifically, the Plan shall address measures to be taken, target ratios to be met, and time frames for reducing the concentration of credit to borrowers involved in real estate development, construction and/or speculation which is detailed on page 2-b of the Report of Examination of the Bank by the FDIC as of July 29, 1991 and on page 9a of the Report of Examination of the Bank by the Superintendent as of June 30, 1991.
[.8] 9. (a) Within 30 days from the effective date of this ORDER, the board of directors of the Bank shall review the adequacy of the Bank's allowance for loan and lease losses. This review shall focus particular attention upon: (i) results of the Bank's internal loan review; (ii) loan loss experience; (iii) an estimate of potential loss exposure on each significant credit; (iv) concentrations of credit in the Bank; and (v) present and prospective economic conditions.
(b) Immediately upon completing the review required by paragraph 9(a) of this ORDER, the Bank's board of directors shall adopt a method of computing the balance of the Bank's allowance for loan and lease losses that gives consideration to the volume and composition of the loan portfolio not subject to criticism, as well as to the volume and composition of criticized loans, including but not limited to the factors referenced in paragraph 9(a). Thereafter, the Bank's board of directors shall, during the first month of each quarter, reevaluate the allowance for loan and lease losses and make such additional pro
{{7-31-92 p.C-2299}}visions for loan and lease losses that are necessary to maintain the allowance at an adequate level relative to the volume of risk in the Bank's loan portfolio. All such additional provisions for loan and leases losses shall be made in the first month of the calendar quarter in which the deficiency in the allowance is identified, but as of the end of the preceding calendar quarter, and shall be reflected in the Report of Condition and the Report of Income filed in the calendar quarter in which the deficiency is identified with respect to the preceding calendar quarter. The minutes of the board of directors of the Bank shall reflect that such reevaluation has been performed, and documentary proof of the method employed in determining the level of the allowance shall be maintained for future regulatory review.
(c) All increases in the allowance for loan and lease losses, with the exception of recoveries credited directly to the allowance, shall be accomplished by charges to operating earnings through the provision for loan and lease losses.
[.9] 10. (a) Within 90 days from the effective date of this ORDER, and within the first 30 days of each calendar year thereafter, the board of directors of the Bank shall develop a written earnings plan consisting of goals and strategies for improving the earnings of the Bank for each calendar year. The written earnings plan shall include, but should not be limited to:
(i) identification of the major areas in, and means by, which the board of directors will seek to improve the Bank's operating performance;
(ii) realistic and comprehensive budgets;
(iii) a budget review process to monitor the income and expenses of the Bank to compare actual figures with budgetary projections on not less than a quarterly basis; and
(iv) a description of the operating assumptions that form the basis for, and adequately support, major projected income and expense components.
(b) Such written earnings plan and any subsequent modification thereto shall be submitted to the Regional Director and the Superintendent for review and comment. Within 30 days after the receipt of any comment from the Regional Director and the Superintendent, the board of directors shall approve the written earnings plan, which approval shall be recorded in the minutes of the meeting of the board of directors of the Bank. Thereafter, the Bank, its directors, officers, and employees shall follow the written earnings plan and/or any subsequent modification thereto.
[.10] 11. Within 60 days from the effective date of this ORDER, the Bank shall eliminate and/or correct all violations of law and regulations, as described on pages 6-a and 6-a-1 of the Report of Examination of the Bank by the FDIC as of July 29, 1991 and on page 3a of the Report of Examination of the Bank by the Superintendent as of June 30, 1991. In addition, the Bank shall take all steps necessary to ensure future compliance with all applicable Federal and State laws and regulations.
[.11] 12. Within 90 days from the effective date of this ORDER, the Bank's board of directors shall revise, adopt and implement written policies and procedures to provide effective guidance and control over the internal routine and controls of the Bank, in accordance with safe and sound banking practices. Among other provisions, the revised policies and procedures shall specifically provide for correction of all internal routine and controls deficiencies set forth in the Reports of Examination by the FDIC and the Superintendent as a result of their examinations of the Bank as of July 29, 1991 and June 30, 1991, respectively. Upon adoption by the board of the revised policies and procedures, a copy of each policy and procedure shall be provided to the Regional Director and the Superintendent.
[.12] 13. Within 60 days from the effective date of this ORDER, the Bank shall develop or revise, adopt, and implement a written liquidity and funds management policy. Such policy shall include the establishment of acceptable ranges of ratios in the following areas: volatile liability dependence, total loans to total deposits and temporary investments to volatile liabilities. In addition, the liquidity policy shall incorporate a funds management program which designates acceptable levels for: volatile liabilities, including borrowings; asset mix, including temporary funds and investments, long-term investment securities and classes
{{7-31-92 p.C-2300}}of obligors, and loans to deposits; and rate-sensitive assets as a percent of rate-sensitive liabilities. The written liquidity and funds management policy shall be submitted to the Regional Director and the Superintendent for review and comment.
[.13] 14. The Bank shall not declare or pay dividends in any amount except as follows:
(a) Such declarations and payments are made in accordance with applicable State and Federal laws and regulations;
(b) That after payment of such dividends, the ratio of adjusted Tier 1 capital to adjusted Part 325 total assets of the Bank will be not less than 6 percent;
(c) That such declaration and payment of dividends shall be approved in advance by the board of directors of the Bank;
(d) That such declaration and payment of dividends shall be approved in advance, in writing, by the Regional Director and the Superintendent.
[.14] 15. While this ORDER is in effect, the bank shall not accept, renew or rollover brokered deposits other than as and to the extent permitted pursuant to section 29 of the Act, 12 U.S.C. § 1831f, as amended, and the FDIC's Rules and Regulations, including section 337.6, 12 C.F.R. § 337.6, as amended and supplemented. For the purposes of this ORDER, the term "brokered deposits" shall have the same meaning as is found in section 337.6(a)(1) of the FDIC's Rules and Regulations, as amended.
[.15] 16. Immediately upon the effective date of this ORDER, unless specifically provided otherwise in a written communication from the Regional Director, the Bank shall: (i) not enter into any agreements with present and former officers of the Bank which constitute "golden parachute payments", as defined in section 18(k)(4) of the Act, 12 U.S.C. § 1828(k)(4); (ii) rescind all agreements or portions of agreements with present and former officers of the Bank which constitute "golden parachute payments"; (iii) cease making any payments to present and former officers of the Bank which constitute "golden parachute payments"; and (iv) take whatever legal steps are necessary to obtain reimbursement from all former officers of the Bank of any payments which have already been made to them and which constitute "golden parachute payments".
[.16] 17. Following the effective date of this ORDER, the Bank shall send to its shareholders or otherwise furnish a description of this ORDER (i) in conjunction with the Bank's next shareholder communication, and also (ii) in conjunction with its notice or proxy statement preceding the Bank's next shareholder meeting. The description shall fully describe the ORDER in all material respects. The description and any accompanying communication, statement, or notice shall be sent to the FDIC, Registration and Disclosure Section, Washington, D.C. 20429, and the Department, for review at least 20 days prior to dissemination to shareholders. Any changes requested to be made by the FDIC or the Department shall be made prior to dissemination of the description, communication, notice, or statement.
[.17] 18. The Bank's board of directors shall appoint a committee (the "Compliance Committee") composed of at least three Outside Directors, as defined in paragraph 1(c) of this ORDER, and whose composition is acceptable to the Regional Director and the Superintendent to monitor the Bank's compliance with this ORDER. Within 30 days from the effective date of this ORDER, and at monthly intervals thereafter, such Compliance Committee shall prepare and present to the Bank's board of directors a written report of its findings, detailing the form, content, and manner of any action taken to secure compliance with this ORDER and the results thereof, and any recommendations with respect to such compliance. Such progress reports shall be included in the minutes of the Bank's board of directors.
[.18] 19. By the 30th day after the end of the calendar quarter in which this ORDER is issued, and by the 15th day after the end of every calendar quarter thereafter, the Bank shall furnish written progress reports to the Regional Director and the Superintendent detailing the form, content, and manner of any actions taken to secure compliance with this ORDER, and the results thereof.
The effective date of this ORDER shall be 10 days from the date of issuance.
The provisions of this ORDER shall be binding upon the Bank, its successors, assigns, directors, officers, employees, agents, and other institution-affiliated parties.
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 mod-
{{7-31-95 p.C-2301}}fied, terminated, suspended, or set aside by FDIC.
Dated: May 19, 1992.
Pursuant to delegated authority.
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