Four Oaks Bank & Trust in Four Oaks, N.C., said its May 2011 enforcement action has been replaced with a more lenient agreement that requires it to address governance issues and other matters.

The Federal Reserve Bank of Richmond placed the $722 million-asset Four Oaks under the new written agreement on July 27. The updated agreement shows Four Oaks has made progress in addressing past issues of concern to regulators, Chief Executive David Rupp said in an interview.

"We're very pleased to exit a 20-point written agreement, which as you might expect is much more onerous," Rupp said.

The new agreement covers three points, Four Oaks said; the areas are the preparation and implementation of programs related to board oversight; a review of new products and services; and ongoing customer monitoring.

The May 2011 agreement had required Four Oaks to submit to regulators its capital plan, annual business plan and budget; and banned the bank from issuing dividends, debt or stock redemptions without prior approval.

Four Oaks "has been able to demonstrate substantial business and risk management progress," the company said in a news release.

The earlier agreement addressed both Four Oaks Bank and its holding company, Four Oaks Fincorp, and was jointly issued by the Federal Reserve and the North Carolina Office of the Commissioner of Banks. The new agreement involves only Four Oaks Bank and the Federal Reserve.

The new written agreement does not specifically mention the January 2014 settlement that Four Oaks reached with the Justice Department. Four Oaks agreed to pay $1.2 million to settle allegations, brought through Operation Choke Point, that it improperly gave a third-party payment processor direct access to the Federal Reserve Bank of Atlanta.

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