Bookkeeping staffing and other operational deficiencies at an Illinois bank holding company have led the Federal Reserve to issue an enforcement order against it, which includes no payment of dividends to stockholders without supervisors’ prior approval.
In the consent order, the Federal Reserve (joined by the Illinois Department of Financial and Professional Regulation) said it brought the action against Texico Bancshares Corp. of Texico, Ill. (and Texico State Bank, of the same location, which the firm owns). The bank, as of March 31, held $10.5 million in assets.
Among other things, the firm is required to retain one or more qualified employees (or contractors) who have “sufficient knowledge and experience in financial institutions bookkeeping or accountancy to perform the back-office functions of the bank.” The bank is also required to review and reconcile its general and subsidiary ledger accounts regularly and adopt various policies and procedures to “ensure the books and records of the bank are maintained in a safe and sound manner.”
The Fed also ordered the firm and bank to not declare or pay dividends without prior approval by federal and state regulators. The holding company may not also take any other form of payment representing a reduction in capital from the bank without the prior written approval of supervisors. Debt and stock redemption is also curtailed.