In Brief: Wash. Firm Must Stop Calling Itself a Bank

Washington State and federal regulators are warning bankers about an organization in Puyallup, Wash., that allegedly has been operating a banking business without approval.

Washington State regulators issued a cease-and-desist order July 31 against Access Bank International Ltd. of the Pacific island of Nauru and its three top officers. The order instructed the organization to stop using the words "bank," "banking," or "banker" in its name or promotional materials or otherwise implying that it is a bank. The company was also ordered not to solicit or take deposits.

According to the documents, the order was issued after a state regulator, following up on a tip, visited the offices and tried to open an account in early July. He was told that the company uses its deposits to buy commercial paper from car dealers, accepts certificates of deposits only for at least $10,000, and has better rates than banks, and that deposits are "guaranteed."

Access Bank International was never granted a charter by either the state or the Office of the Comptroller of the Currency. Both the OCC and the Federal Deposit Insurance Corp. issued warnings about Access Bank International to banks across the country on July 7, following the regulator's inspection.

The last time Washington regulators issued such an order against an allegedly illegal bank was in January 1993, against East Tech International. The OCC typically issues 40 to 50 warnings about such entities each year, according to an agency official.