Wrong numbers: Bank fined $275,000 for placing marketing calls to ‘do-not-call’ registrants

An Oregon bank has agreed to pay a $275,000 civil money penalty (CMP) for placing telemarketing calls to consumers on the “Do-Not-Call” registry and using an automated dialing system to send pre-recorded or text messages to consumers’ cell phones, the federal insurer of bank deposits said.

In its report of orders and administration enforcement actions taken against banks and individuals released Friday, the Federal Deposit Insurance Corp. (FDIC) said the Willamette Valley Bank of Salem, Ore., consented to the order to pay the CMP. The agency said the order was issued for violations of the Real Estate Settlement Procedures Act (RESPA) by “agreeing to pay and accept fees for the referral of mortgage loans business”; and for violations of the Telephone Consumer Protection Act related to the telemarketing and cell phone calls.

In another order, the agency affirmed a $250,000 CMP against a former bank officer – and instituted a prohibition against him – for actions that led to the bank’s losses of $16 million in commercial loans from 2006-07.

The FDIC said it rejected a challenge from Michael R. Sapp, former president and CEO of Tennessee Commerce Bank of Franklin, Tenn., of the $250,000 CMP. The penalty was assessed, the agency said, for breaches of fiduciary duties to the bank and active participation in the bank’s violation of federal law “by engaging in multiple acts to conceal the bank’s losses on $16 million made to two related companies in 2006 and 2007, which were all guaranteed by the same husband and wife.”

Sapp had challenged a finding for the CMP made by an administrative law judge (ALJ) appointed by the FDIC Board.

The FDIC, in addition to ordering Sapp to pay the fine within 30 days of the order’s Sept. 17 issuance, also ordered Sapp prohibited from the affairs of any insured depository institution without the prior, written consent of the FDIC and the appropriate federal financial regulator overseeing the institution.

The two CMPs outlined by the FDIC were among the 22 stipulated orders, and two adjudicated decisions and orders, by the FDIC Board in September. The agency said the administrative enforcement actions in those orders consisted of one consent order; five removal and prohibition orders; six assessments of civil money penalty; three voluntary terminations of deposit insurance; six section 19 orders; and three terminations of orders of restitution.

FDIC September Enforcement Decisions and Orders

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