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[¶10,625B] In the Matter of David M. Turner, Lyndonville Savings Bank and
Trust Company, Lyndonville, Vermont, Docket No. 92-211k (8-20-92)
Respondent agrees to pay civil money penalty assessed by the FDIC. This
was an uncontested notice and became a final order by operation of law.
In the Matter of
DAVID M. TURNER,
individually,and as vice president and an institution-affiliated party of
LYNDONVILLE SAVINGS BANK AND TRUST COMPANY
LYNDONVILLE, VERMONT
(Insured State Nonmember Bank)
NOTICE OF ASSESSMENT OF CIVIL MONEY PENALTIES, FINDINGS OF FACT AND CONCLUSIONS OF LAW, ORDER TO PAY, AND NOTICE OF HEARING
FDIC-92-211k
NOTICE OF ASSESSMENT OF CIVIL MONEY PENALTIES
The Federal Deposit Insurance Corporation ("FDIC") is of the
opinion that David M. Turner ("Respondent"), individually and as
vice president of Lyndonville Savings Bank and Trust Company,
Lyndonville, Vermont ("Bank"), has violated the TEMPORARY ORDER
TO CEASE AND DESIST ("TEMPORARY ORDER") issued February 26, 1991.
The FDIC hereby issues this NOTICE OF ASSESSMENT OF CIVIL MONEY
PENALTIES, FINDINGS OF FACT AND CONCLUSIONS OF LAW, ORDER TO PAY, AND
NOTICE OF HEARING ("NOTICE OF ASSESSMENT"), pursuant to the
provisions of section 8(i) of the Federal Deposit Insurance Act
("Act"), 12 U.S.C. § 1818(i), and the FDIC Rules of Practice
and Procedure, 12 C.F.R. Part 308. In support thereof, the FDIC finds
and concludes as follows:
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. At all times pertinent to the charges herein, the Bank was a
corporation existing and doing business under the laws of the State of
Vermont, having its principal place of business in Lyndonville,
Vermont. The Bank was, at all times pertinent to the charges herein, an
insured State nonmember bank subject to the Act, 12 U.S.C.
§§ 1811-1831t, the Rules and Regulations of the FDIC, 12 C.F.R.
Chapter III, and the laws of the State of Vermont.
2. At all times pertinent to the charges herein, the Respondent was
vice president of the Bank.
3. By virtue of his position as vice president, Respondent was, at all
times pertinent to the charges herein, an "institution-affiliated
party" as that term is defined in section 3(u) of the Act, 12 U.S.C.
§ 1813(u).
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4. The FDIC has jurisdiction over the Bank, the Respondent, and the
subject matter of the proceeding.
5. On February 26, 1991, the FDIC issued a TEMPORARY ORDER TO CEASE AND
DESIST ("TEMPORARY ORDER") in cause No. FDIC-91-57c&b which
provides, in part, that the Bank and its institution-affiliated parties
shall not approve, purchase, grant, make, commit to or fund any loan or
other extension of credit, directly or indirectly, to or from ___,
or to their related interests, unless the loan or other extension of
credit does not involve more than the normal risk of repayment or
present other unfavorable features and has been approved in advance by
a majority of the Bank's entire Board of Directors and, after written
notification to the Regional Director of the FDIC's Boston Regional
Office ("Regional Director"), the Bank has obtained the
nonobjection of the Regional Director or his designee.
6. The TEMPORARY ORDER further stated that "extension of credit"
was to be defined as set forth in section 215.3 of Regulation O of the
Board of Governors of the Federal Reserve System ("Regulation
O"), 12 C.F.R § 215.3.
7. Section 215.3 of Regulation O, 12 C.F.R. § 215.3, defines
"extension of credit" to include ". . . the making or
renewal of any loan . . ." and ". . . any note,
draft, bill of exchange or other evidence of indebtedness upon which a
person may be liable as maker, drawer, endorser, guarantor,
or surety . . ." (emphasis added), 12 C.F.R. § § 215.3(a) and
215.3(a)(4).
8. At all times pertinent to the charges herein, the TEMPORARY ORDER
was effective and outstanding.
9. Prior to July 10, 1991, Respondent was aware or should have been
aware of the substantive terms of the TEMPORARY ORDER and of his duty
to comply with the restrictions pertaining to extensions of credit to
persons listed therein.
10. On July 10, 1991, Respondent caused the Bank to renew an extension
of credit to ___ in the amount of $54,000. This extension of credit
was guaranteed by ___, and as such constituted an extension of
credit to or for the benefit of ___, a restricted borrower,
pursuant to section 215.3 of Regulation O, 12 C.F.R. § 215.3 and the
terms of the TEMPORARY ORDER.
11. By his actions, Respondent caused the Bank to violate paragraph (a)
of the TEMPORARY ORDER issued by the FDIC on February 26, 1991, in that
Respondent renewed the loan without prior written notification to the
FDIC and without obtaining the nonobjection of the Regional Director or
his designee.
12. Respondent did not notify the FDIC concerning the loan renewal, in
writing or otherwise, until July 15, 1991.
13. By virtue of the facts stated above, the FDIC concludes that
Respondent violated paragraph (a) of the TEMPORARY ORDER TO CEASE AND
DESIST issued February 26, 1991.
ORDER TO PAY
By reason of the violation set forth in the foregoing NOTICE OF
ASSESSMENT, the FDIC has concluded that a civil money penalty should be
assessed against Respondent pursuant to section 8(i) of the Act, 12
U.S.C. § 1818(i). After taking into account the appropriateness of
the penalty with respect to the financial resources and good faith of
Respondent, the gravity of the violations of Respondent, the history of
previous violations of Respondent, and such other matters as justice
may require, it is:
ORDERED, that by reason of the violation set forth above, a penalty of
$2,000 be, and hereby is, assessed against Respondent pursuant to
section 8(i)(2)(A)(ii) of the Act, 12 U.S.C. § 1818(i)(2)(A)(ii).
FURTHER ORDERED, that the effective date of this ORDER TO PAY be, and
hereby is, stayed with respect to the Respondent until twenty (20) days
after the date of receipt of the NOTICE OF ASSESSMENT by the
Respondent, during which time the Respondent may file an answer and
request a hearing pursuant to section 8(i)(2)(H), and section 308.19 of
the FDIC Rules of Practice and Procedure, 12 C.F.R. § 308.19. An
original and one copy of the answer, any such request for a hearing,
and all other documents in this proceeding must be filed in writing
with the Office of Financial Institution Adjudication, 1700 G Street,
N.W., Washington, D.C. 20552, pursuant to section 308.10 of the FDIC
Rules of Practice and Procedure, 12 C.F.R. § 308.10. Also, copies of
all papers filed in this proceeding shall be served upon the Office of
the Executive Secretary, Federal Deposit Insurance Corporation, 550
17th Street, N.W., Washington,
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General Counsel, Compliance and Enforcement, Federal Deposit Insurance
Corporation, 550 17th Street, N.W., Washington, D.C. 20429; and Thomas
W. Lawless, Jr., Regional Counsel (Supervision), Federal Deposit
Insurance Corporation, 160 Gould Street, Needham, Massachusetts 02194.
If the Respondent fails to file a request for hearing within twenty
(20) days from the date of receipt of this NOTICE OF ASSESSMENT, the
penalty assessed against Respondent, pursuant to this ORDER TO PAY,
will be final and shall be paid within sixty (60) days after the date
of receipt of this NOTICE OF ASSESSMENT.
NOTICE OF HEARING
IT IS FURTHER ORDERED that, if the Respondent requests a hearing
with respect to the charges alleged in the NOTICE OF ASSESSMENT, the
hearing shall commence one hundred and twenty (120) days from the date
of receipt of this NOTICE OF ASSESSMENT at Burlington, Vermont, or at
such other date or place upon which the parties to this proceeding and
the Administrative Law Judge mutually agree.
The hearing will be public and shall be conducted in accordance with
the provisions of the Act, 12 U.S.C. §§ 1811-1831t, the
Administrative Procedure Act, 5 U.S.C. §§ 551-559, and the FDIC
Rules of Practice and Procedure, 12 C.F.R. Part 308. The hearing will
be held before an Administrative Law Judge to be appointed by the
Office of Financial Institution Adjudication pursuant to 5 U.S.C.
§ 3105. The exact time and location of the hearing will be determined
by the Administrative Law Judge.
In the event the Respondent requests a hearing, Respondent shall also
file an answer to the charges in this NOTICE OF ASSESSMENT within
twenty (20) days after the date of receipt of the NOTICE OF HEARING in
accordance with section 308.19 of the FDIC Rules of Practice and
Procedure, 12 C.F.R. § 308.19.
Failure of Respondent to request a hearing shall render the civil money
penalty assessed in this NOTICE OF ASSESSMENT final and unappealable
pursuant to section 8(i)(2)(E)(ii) of the Act, 12 U.S.C. § 1818(i)
(2)(E)(ii), and section 308.19(c)(2) of the FDIC Rules of Practice and
Procedure, 12 C.F.R. § 308.19(c)(2).
Pursuant to delegated authority.
Dated at Washington, D.C., this 20th day of August, 1992.