WASHINGTON — The Federal Reserve is calling on a Virginia bank to develop survival plans to shore up that bank's financial condition and operations, according to a Fed enforcement action released Tuesday.
Frank Miller, chairman of the board of directors for the Virginia Business Bank, agreed to submit written plans to the Fed and the Virginia Bureau of Financial Institutions detailing how the board plans to enhance its oversight of the bank while also retooling its operations.
According to the agreement, the board must detail, within 30 days, how bank executives will address loan review processes, credit risk management, and asset and liability management, among others. The bank also has to submit a capital plan in 60 days that includes current and future capital forecasts.
The Richmond financial institution is a provider of personal and commercial banking services. This Fed enforcement action follows similar pressure the Fed placed on CIT Group Inc. in mid-August to come up with a viable plan for survival.
Nonetheless, under the agreement, the Virginia Business Bank has agreed to not declare or pay any dividends "without prior written approval" from Fed officials or from the Virginia Bureau of Financial Institutions.
Other conditions of the agreement include barring the Virginia Business Bank from extending or renewing any credit to any borrower whose extension of credit is considered "doubtful or substandard."