The Federal Reserve Bank of Cleveland has terminated an enforcement action against Rurban Financial (RBNF) in Defiance, Ohio, tied to its information-technology unit.
The two-year-old
The subsidiary, which does business as RDSI Banking Systems, ran into trouble in 2010 when deficiencies in a software system that it had developed forced Rurban to cancel plans to spin it off and merge it with another technology company.
Rurbanc's performance has since stabilized, and it is now a much smaller part of its parent company's revenue stream, Rurban President and Chief Executive Mark Klein said.
"We complied 100% with the consent order for two years. The Cleveland Fed did not want a nonbank subsidiary draining resources from a bank's holding company," Klein said. "Rurbanc is now a much smaller part of the business than it was in 2011, and so the risk is much less to the holding company, the Federal Reserve and, ultimately, the taxpayer."
Rurban reported
However, the Cleveland Fed will take an informal enforcement action against Rurban to address issues uncovered in its latest exam, the regulator said in a
The new action relates to several "relatively low-importance matters," Klein said. The same exam upgraded Rurban to very good standing, Klein said.
Rurban is the holding company for the State Bank and Trust, which has $636 million in assets and 19 branches. State Bank and Trust was not part of the consent order and is not under any enforcement action, Klein said.