Far Fewer Institutions Hit With Enforcement Actions In '95, Regulators

Banks and thrifts took far less heat from federal regulators in 1995 than in previous years.

Enforcement actions taken against national banks plunged 63% in 1995, to 85 from 227 in 1994.

The Office of Thrift Supervision's enforcement actions against federally chartered thrifts dropped 22% in 1995, to 168 from 216 in 1994.

For state banks that are not members of the Federal Reserve system, the number of enforcement actions declined nearly 13%, to 126 from 144, according to the Federal Deposit Insurance Corp.

The Federal Reserve has not finished compiling data on enforcement actions it took against state member banks last year.

Industry representatives said regulators are backing off because 1995 was a banner year for banks.

"In light of the robust health of the banking industry, these numbers aren't surprising," said Karen Thomas, director of regulatory affairs for the Independent Bankers Association of America. "Enforcement actions are usually instituted against banks that are in poor financial health."

Enforcement actions are broken down into two categories: formal and informal. Formal enforcement actions are legally binding and include formal agreements, consent orders, civil money penalties, and the removal of bank officers or directors. Informal actions are written agreements between regulators and bankers to correct less serious problems.

Formal enforcement actions taken against national banks dropped by the same percentage in '95 as the overall number: 63%. That's a drop of 113 actions to 66.

The Comptroller's office issued 28 civil money penalties, seven formal agreements, and 19 cease and desist orders. The agency removed 12 officers and directors from national banks.

The agency also took significantly fewer informal actions last year. The number of commitment letters and memorandums of understanding declined 60% in 1995, to 19 from 48 in 1994.

Such breakdowns were not available from the other agencies. However, more information should be available in March when all the agencies must file a report with Congress on their 1995 enforcement activities.

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