The Federal Reserve announced enforcement actions Friday against North Valley Bancorp in Redding, Calif.

Under a written agreement, North Valley cannot, without prior Fed approval, directly or indirectly extend or renew credit to borrowers whose credit is deemed "doubtful" or "substandard," among other credit-related restrictions.

North Valley, a registered bank holding company, also cannot declare or pay dividends without prior approval, the agreement said.

The action also states that the firm cannot directly or indirectly take dividends or any other form of payment that would represent a reduction in capital from its state-chartered bank, North Valley Bank.

The bank, in a statement, said its "normal lending functions have not been curtailed as a result of the agreement."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.