Banks, firm, workers slapped with enforcement actions, prohibitions, money penalties in November

Nine banks and a company serving banks were slapped with enforcement actions by the federal insurer of bank deposits in November, while one former credit union worker was prohibited from further service at financial institutions by the credit union federal supervisor, the agencies said late last week.

The Federal Deposit Insurance Corp. (FDIC) said that, among the 10 enforcement actions it listed for November, was a cease and desist order against Comenity Servicing LLC of Columbus, Ohio, for “deficiencies and weaknesses in the SP’s systems development, project management, business continuity management, cloud operations, and the oversight of business arrangement” between Comenity and another entity.

The FDIC said Comenity is an information technology provider (and other services) to banks and other certain “insured depository institutions” (IDIs).

Also, the FDIC said it has assessed a $23,000 civil money penalty (CMP) against Horicon Bank of Horicon, Wis., for violations of the Flood Disaster Protection Act (FDPA), which mandates flood insurance protection for certain properties.

Other actions reported by the FDIC include:

  • Cease and desist against Peoples Bank, Munster Bank, Ind., related to unsafe/unsound practices relating to violation of the anti-money laundering Bank Secrecy Act (BSA).
  • Cease and desist against Independence Bank, East Greenwich, R.I. for violations of Small Business Administration (SBA) loan program requirements.
  • Prohibition for Sheree Leanne Carter, a former employee Rockland Trust Company, Rockland, Mass, for stealing funds from the bank by taking cash from her teller drawer and by taking cash intended for the bank’s automated teller machines (ATMs).
  • Prohibition for Lladira Hernandez, a former employee of Central Valley Community Bank, Fresno, Calif., for initiating unauthorized ACH debits from four separate customers.
  • Prohibition for William J. Burnell, a former worker for First NBC Bank, New Orleans, for unsafe, unsound practices which the FDIC said caused losses to the bank and the agency as receiver. However, the FDIC said a previous CMP against Burnell has been dismissed.
  • A cease and desist order against First Fed Bank of Port Angeles, Wash., for unsafe, unsound practices (via implied claims that credit products offered through the bank with non-optional debt cancellation features were unemployment insurance, approving consumers who did not qualify for the debt cancellation feature, and misrepresenting the fees and benefits for those products.)
  • A cease and desist order against Liberty Bank, Inc. of Salt Lake City related to capital deterioration, operating losses, inaccuracy of books and records, and deficiencies in management and board oversight.
  • A $23,000 CMP assessed against Horicon Bank of Horicon, Wis., for violations of the Flood Disaster Protection Act (FDPA).
  • A cease and desist order against Brighton Bank of Brighton, Tenn., for violations of the BSA, anti-money laundering requirements.

Meanwhile, the National Credit Union Administration (NCUA) said it had prohibited Andrea Alice Nedow, a former employee of Traverse Catholic Federal Credit Union (FCU) in Traverse City, Mich., for making unauthorized withdrawals from member accounts.

FDIC Enforcement Decisions and Orders

NCUA Prohibits One Individual From Participating in the Affairs of Any Federally Insured Depository Institution