FDIC Issues 72 Enforcement Actions In March To Problem Banks

The FDIC announced in a press release today that a total of 72 enforcement actions were taken against banks and individuals for March 2012.  During the previous month, the FDIC had issued a total of 53 enforcement actions.

Included in the FDIC enforcement actions were 18 civil money penalties, 1 prompt corrective action notice, 13 consent orders, 3 orders terminating deposit insurance, 9 removal and prohibition order and 24 orders terminating previous cease and desist orders, consent orders and prompt corrective action notices.  The FDIC currently provides depositor insurance at 7,359 banks and savings associations.

The number of problem banks remains stubbornly high since the start of the banking crisis in 2008 despite unprecedented financial support from the government and federal reserve.  A total of 431 banks have failed since 2008 and the number of banks on the Problem Bank List has remained above 800 since 2010.

The latest reported figures from the FDIC show that over 11% of all federally insured banks with total assets of $319.4 billion remain classified as problem banks as of December 31, 2011.

A consent order is issued to a bank when regulators determine that the bank is engaging in unsafe or unsound banking practices.  The consent order lists the problem areas that a bank is required to address.  A consent order can be terminated by the FDIC after a bank has adequately addressed items cited in the consent order.

A prompt corrective action notice (PCA) is issued to a bank that is in serious financial difficulty and usually directs the bank to take immediate action to return to “minimum capital standards”.  Banks issued a PCA are considered to be operating in an “unsafe and unsound” manner and are classified as undercapitalized, significantly undercapitalized or critically undercapitalized”.

Listed below are the institutions that were issued enforcement actions for civil money penalties, consent orders and prompt corrective action notices.  The full list of enforcement actions taken by the FDIC in March can be viewed by clicking the following link – FDIC Enforcement Decisions and Orders.