UPDATE: Fed Enforcement Actions Against 3 Banks; BBVA Subsidiary
September 24 2009 - 1:59PM
Dow Jones News
The U.S. Federal Reserve announced enforcement actions Thursday
against Capitol Bancorp Ltd. (CBC) and First National Bancshares
Inc., moves taken to help maintain financial soundness at the
companies, according to the Fed orders.
The Fed also said it ordered Compass Bank, a Birmingham, Ala.,
subsidiary of BBVA SA (BBV), to pay a $70,625 civil penalty in
connection with alleged violation of the National Flood Insurance
Act.
Compass consented to the Fed's enforcement action without
admitting to any allegations, the Fed said in a statement.
Under a written agreement, Michigan-based Capitol Bancorp can't
declare or pay any dividends without prior approval from the
Fed.
The firm also can't directly or indirectly take dividends or any
other form of payment representing a reduction in capital from any
of Capitol Bancorp's nine second-tier bank holding companies.
Similarly, Kansas-based First National can't declare or pay any
dividends without prior approval from the Fed, according to its
agreement. First National is also restricted from directly or
indirectly taking dividends or any other form of payment
representing a reduction in capital from any of its
subsidiaries.
Both bank holding companies, Capitol Bancorp and First National,
also can't incur or increase or guarantee any debt without prior
written approval from the Fed.
Among other things, Capitol Bancorp must also submit to Fed
officials a written plan to maintain sufficient capital. First
National must submit a written cash flow projection for 2010 and
written progress reports regarding the agreement.
(Matthias Rieker contributed to this article)
-By Darrell A. Hughes, Dow Jones Newswires; 202-862-6684;
darrell.hughes@dowjones.com