The FDIC announced today a total of 53 enforcement actions for May 2012. In the previous month, the FDIC had issued 56 enforcements actions.
Enforcements actions issued in May included 9 consent orders, 10 civil money penalties, 8 section 19 orders, 13 orders terminating previous consent and cease and desist orders, 2 orders terminating prompt corrective actions directives, 8 removal and prohibition orders, 1 modification of consent order and 2 orders terminating prompt corrective action notices.
Despite the decline in the number of failed banks this year compared to 2011, the number of problem banks remains at very high levels with over 1 out of every 10 banks classified as a “Problem Bank” by the FDIC. The FDIC currently insures deposits at 7,309 banks and savings associations of which 772 are classified as Problem Banks. Total assets of problem banks as of the latest reporting period ending March 31, 2012, are at $292.1 billion.
A consent order is issued by the FDIC when regulators determine that a bank is operating in an “unsafe or unsound” manner. A bank signing a consent order is required to take corrective actions for the deficiencies cited in the consent order. If a bank is able to cure the deficiencies cited in the consent order, the FDIC can terminate the order.
A prompt corrective action notice (PCA) requires a bank to take immediate actions to address serious managerial or financial deficiencies. A PCA is a much more serious action than a consent order and is typically issued to a capital impaired bank that is in serious financial difficulty. A bank issued a PCA is classified as undercapitalized, significantly undercapitalized or critically undercapitalized and operating in an unsafe and unsound manner. Many of the banks issued prompt corrective action notices are unable to raise additional capital and wind up being closed by regulators.
Listed below are the banks issued enforcement actions by the FDIC during May for consent orders and civil money penalties. The full list of enforcement actions issued by the FDIC during May can be seen at FDIC May Enforcement Decisions and Orders.