Magazine article American Banker

FDIC Details Latest Enforcement Actions

Magazine article American Banker

FDIC Details Latest Enforcement Actions

Article excerpt

Byline: Kristin Broughton

The Federal Deposit Insurance Corp. in August issued eight consent orders and one civil money penalty, according to its latest monthly roundup of enforcement actions released Friday.

The FDIC directed the Espirito Santo Bank in Miami to adopt a plan to sell itself to another bank. The agency also placed limits on transactions with its former parent company, Banco Espirito Santo, which was taken over by regulators in Portugal last month as part of a bailout plan.

The $751 million-asset Espirito Santo, which is now independent from its Portuguese parent, last month hired investment banking firm FIG Partners to market itself to prospective buyers.

The FDIC directed the $2.6 billion-asset asset Burke & Herbert Bank & Trust in Alexandria, Va., to comply with several Bank Secrecy Act-related directives, including training staff and establishing an independent testing program. It also required the bank to increase its board supervision.

Charter Bank in Corpus Christi, Texas, was ordered to develop a compliance management system that includes a training program on applicable consumer laws for bank personnel. Charter has $248 million in assets.

The FDIC directed the $240 million-asset Devon Bank in Chicago to improve its internal controls, ensuring that reconciliations of monthly accounts are reviewed. Devon was also ordered to submit a report on the implementation of its whistle-blower and ethics policies.

The agency hit the $161 million-asset First Covenant Bank in Commerce, Ga., with a civil money penalty of $10,000, related to violations in advertising materials prepared by a third-party contractor.

First Cornerstone Bank in King of Prussia, Pa., was ordered to increase its Tier 1 capital to at least 8% of total assets. The $126 million-asset bank was also directed to hold a Tier 1 risk-based capital ratio of at least 10. …

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