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FDIC Enforcement Decisions and Orders

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   [11,403A] In the Matter of Stutsman County State Bank, Jamestown, North Dakota, Docket No. 97-026c&b (4-14-97).

   A temporary 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.

   [.1] Credit Card Operations—Restricted

   [.2] Awards/Settlements—Requirements of Compliance

   [.3] Shareholders—Disclosure of Cease and Desist Order Required
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In the Matter of

(Insured State Nonmember Bank)

FDIC-97-026 c&b

   The Federal Deposit Insurance Corporation ("FDIC") has determined that the unsafe or unsound banking practices which Stutsman County State Bank, Jamestown, North Dakota ("Bank") is alleged to have engaged in or which the FDIC has reason to believe the Bank is about to engage in, as specified in the NOTICE OF CHARGES AND OF HEARING ("NOTICE") attached hereto and incorporated herein by reference, and/or the continuation thereof by the Bank, are likely to cause insolvency or significant dissipation of the assets or earnings of the Bank, or are likely to weaken the condition of the Bank or otherwise prejudice the interests of the depositors of the Bank prior to the completion of the proceedings against the Bank conducted pursuant to section 8(b) of the Federal Deposit Insurance Act ("Act"), 12 U.S.C. §1818(b). Therefore, the FDIC hereby issues this TEMPORARY ORDER TO CEASE AND DESIST ("TEMPORARY ORDER") and hereby gives notice pursuant to section 8(c)(1) of the Act, 12 U.S.C. §1818(c)(1), that the Bank and its institution-affiliated parties, successors and assigns, be and hereby are ORDERED TO CEASE AND DESIST FROM and take affirmative action, as follows:

   [.1] 1. The Bank shall not establish any new credit card account, including, without limitation, any pending applications for a new credit card account whether or not such application has been or is approved by the Bank. For purposes of this Order "any pending application" means that no credit card has been issued to the applicant.

   [.2] 2. If, as a result of (i) any court or arbitration proceeding or (ii) any settlement negotiations, the Bank is found liable for breach of any contract ("award") or agrees to settle any contract claims ("settlement"), the Bank:

       (a) shall immediately notify the Regional Director or Acting Regional Director for the FDIC's Kansas City Regional Office ("Regional Director") in writing of such award or settlement; and

       (b) shall not make any payment pursuant to such award or settlement for a period of 90 days from the date such written notice is received by the Regional Director, provided that the Regional Director may approve any such payment, in whole or in part, in writing prior to the expiration of the 90 day period.

   [.3] No more than 60 days from the effective date of this TEMPORARY ORDER, the Bank shall send to its shareholders a description of this TEMPORARY ORDER. The description shall fully describe this TEMPORARY 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 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.

   This TEMPORARY ORDER shall be effective immediately upon service on the Bank and shall remain in full force and effect, pending the completion of the administrative proceedings instituted pursuant to the foregoing NOTICE.

   Pursuant to delegated authority.

   Dated at Washington, D.C., this 14th day of April, 1997.

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Last Updated 8/8/2003

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