[¶16,372] In the Matter of Cross Country Bank, Wilmington, Delaware, Docket No.
In the Matter of
CROSS COUNTRY BANK WILMINGTON, DELAWARE (Insured State Nonmember Bank)
MODIFIED ORDER TO CEASE AND DESIST
By Consent of the parties, this Order modifies the existing Order
issued and effective on May 15, 2002 by removing all operative
provisions of the May 2002 Order except for paragraph 6 which is
retained and amended as set forth below. Cross Country Bank,
Wilmington, Delaware ("Insured Institution"), 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 Insured Institution and of its
right to a hearing on the alleged charges under section 8(b)(1) of the
Federal Deposit Insurance Act ("Act"), 12 U.S.C. § 1818(b)(1),
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 March 5, 2004, 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 Insured Institution consented to the issuance of a
MODIFIED ORDER TO CEASE AND DESIST ("ORDER") by the FDIC.
The FDIC considered the matter and determined that it had reason to
believe that the Insured Institution 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 Insured Institution, 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 as follows:
(a) Engaging in high-risk lending without adequate capital.
IT IS FURTHER ORDERED that the Insured Institution, its
institution-affiliated parties, and its successors and assigns take
affirmative action as follows:
1. The Insured Institution shall maintain a sufficient level of capital
to provide for a Total Risk-Based Capital Ratio of ten (10) percent, a
Tier 1 risk based capital ratio of six (6) percent and a leverage ratio
of five (5) percent. In determining the Insured Institution's
adherence to these minimum requirements, the Insured Institution's
subprime loans shall be risk-weighted at 300 percent. As used in this
ORDER, the term "subprime" loans are those extended to borrowers
who exhibit characteristics indicating a significantly higher risk of
default than traditional bank lending customers, as defined in the
March 1, 1999 Interagency Guidance on Subprime Lending and the January
31, 2001 Interagency Expanded Guidance for Subprime Lending Programs.
2. All correspondence related to this ORDER, and any information,
reports or documentation required herein shall be sent to: Christopher
J. Spoth, Regional Director, Federal Deposit Insurance Corporation, 20
Exchange Place, New York, New York 10005. A complete copy of any
submission should be sent to: Federal Deposit Insurance Corporation,
Risk Management and Applications Section, Room 5092, 550 17th Street,
N.W., Washington, D.C. 20429.
3. All members of the Insured Institution's board of directors shall
ensure adherence to, and compliance with, each and every obligation
contained in this ORDER. This responsibility shall include, but not be
(a) authorizing and adopting, on behalf of the Insured Institution,
such actions as may be necessary for the Insured Institution to
accomplish all obligations and/or undertakings required by the terms of
(b) requiring timely reporting by Insured Institution management of all
action taken, pursuant to board direction, to assure compliance with
the terms of this ORDER;
(c) timely monitoring for any non-compliance; and
(d) requiring corrective action when any non-compliance occurs.
4. This ORDER shall be effective immediately upon issuance and
shall remain effective and enforceable except to the extent that, and
until such time as, any provisions of this ORDER shall have been
modified, terminated, suspended, or set aside by the Regional Director.
The provisions of this ORDER shall be binding upon the Insured
Institution, its successors, assigns, directors, officers, employees,
agents, and other institution-affiliated parties.