Bank Enforcement Trends: Enforcement Lags Crisis But Highlights Ongoing Problems

Author:Mr Thomas Vartanian, David L. Ansell, Robert H. Ledig and Lawrence K. Nesbitt
Profession:Fried Frank Harris Shriver & Jacobson
 
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In a recent article, Tom Vartanian and Larry Nesbitt reported on a significant increase in the number of federal banking agency enforcement actions as well as bank and thrift failures during the first six months of 2009. Vartanian and Nesbitt, Actions Lag Financial Crisis But Reflect Trouble Banks Continue to Confront, 93 Banking Rep. (BNA) 817 (Oct. 27, 2009).

The authors found that in the first six months of 2009, the federal banking agencies closed more than 500 enforcement actions, more than twice as many as during the first six months of any of the preceding five years. While the majority of these enforcement actions focused on basic safety and soundness issues with capital issues being paramount, the federal banking agencies continued to emphasize the need for depository institutions to comply with consumer protection laws and regulations, to supervise third-party service providers, and to comply with bank secrecy and anti-money laundering laws and regulations. The authors also reported on a significant increase in the number of bank and thrift failures during the first six months of 2009. A total...

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