FDIC’s January orders include CMPs, prohibitions; nine lift past prohibition orders

[UPDATED] A list of 25 enforcement decisions and orders – one from October, the rest from January – regarding banks and individuals were released Friday by the Federal Deposit Insurance Corp. (FDIC), including five ordering or stating the FDIC’s intent to pursue civil money penalties (CMPs) over federal rule violations.

The CMPs, totaling $45,550 in the aggregate, were for the following:

  • Jeffrey S. Fortney, formerly president, cashier, and a director of Commercial Bank of Oak Grove, Mo., was named in an October 2018 (this was included in the January list) notice of charges for an order to cease and desist and notice of assessment and order to pay a $15,000 CMP; Fortney was given 20 days to contest both. The FDIC order says Fortney altered the statements for the bank’s correspondent account with UMB Bank, National Association, misstating the balance in the correspondent account and the bank’s capital in the bank’s records, and provided altered documents to examiners in order to conceal the activity, the order says. To bring the correspondent account back into balance, Commercial Bank charged off $469,434.04 on January 9, 2017 and an additional $47,628.42 on June 23, 2017.
  • Wayne Hoffner, president and a loan officer of The Union Bank, Beulah, N.D. is assessed a CMP of $15,000 related to breaches of fiduciary duty, according to a consent C&D order. FDIC says Hoffner failed to disclose information regarding the purpose of certain loans to the bank’s board of directors and to regulators during the September 2016 examination after becoming aware that certain loan proceeds were not used for their intended purposes; and in May of 2015\ released collateral for a loan without receiving the proceeds of that collateral, leaving the loan undersecured.
  • Rebecca McWilliams, an institution-affiliated party of The Lauderdale County Bank, Halls, Tenn., was assessed a $5,000 CMP under a consent order for violating and causing the bank to violate the limits on extensions of credit to executive officers, directors, and principle shareholders.
  • Park Bank, Holmen, Wis., was ordered to pay a CMP of $7,850 for violating federal flood insurance requirements. Numerous instances were identified in the notice, which found the bank engaged in a “pattern or practice” of violating various portions of rules implementing requirements of the National Flood Insurance Act (NFIA) and the Flood Disaster Protection Act (FDPA).
  • Mainland Bank of Texas City, Texas, under a stipulation and consent order, was assessed a $2,700 CMP for violations of the FDPA. FDIC says the bank engaged in a pattern or practice of violating portions of the FDPA and FDIC rules by failing to obtain flood insurance coverage at or before loan origination, increase, renewal, or extension on 25 loans secured by a building or mobile home that is located or to be located in a special flood hazard area.

The remaining actions on the FDIC’s January list include three terminations of previous cease-and-desist orders; a prompt corrective action order; six prohibition orders; a consent order related to Bank Secrecy Act compliance; and orders restoring nine individuals’ ability to serve with federally insured depository institutions.

The individuals named in the Section 19 orders, since their prohibition from service, have “demonstrated satisfactory evidence of rehabilitation,” the orders show.

All the above individuals, before working again with an insured institution, must present a copy of the orders granting their requests.

FDIC Makes Public January Enforcement Actions; No Administrative Hearings Scheduled for March 2019

January list of orders