2014 enforcement action against Regions Bank (AL) terminated

A 2014 enforcement action against Regions Bank, Birmingham, Ala., over lax practices in the bank’s treatment of large-balance commercial real estate and other types of loans, and the bank’s effort to hide related information, was terminated Monday by the Federal Reserve Board, the Fed announced Thursday.

The 2014 action involved a consent order the bank entered into with the Fed and the Alabama State Banking Department. It addressed problems uncovered by examiners in 2009 regarding the bank’s failure to maintain “objective, rigorous and well-documented controls and procedures for identifying loans for nonaccrual status with particular regard to certain large-balance commercial real estate and other loans.” The order said “certain” former bank officers, in connection with a targeted exam of these issues in 2009, provided inaccurate information to the regulators and directed that relevant information be concealed, and that the bank’s senior management “failed to take significant actions” to comply with a supervisory directive to conduct an independent review of the governance structure over the bank’s nonaccrual procedures. (The order also acknowledged progress already being made by the time of the order.)

The bank was assessed civil money penalties: $46 million, payable to the Fed; and $5 million, payable to the Alabama regulator. It was also ordered to take steps to improve policies, practices, controls and procedures to ensure examiners are provided accurate information in a timely manner; ensure the accuracy of credit risk ratings, nonaccrual determinations and Allowance for Loan and Lease Losses (ALLL) adequacy; and ensure that supervisory directives from the Fed and state regulator are properly tracked and implemented.

Federal Reserve Board announces termination of enforcement action with Regions Bank