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At least nine lenders have halted operations in the three weeks since state regulators began pressuring banks to cut off their access to the payments system.
August 28 -
NCAL Bancorp in Los Angeles and Raton Capital in New Mexico have been hit with enforcement orders from the Federal Reserve Board that require them to stabilize their ailing bank subsidiaries.
April 12 -
Grandpoint Capital's plan to acquire its ninth bank in less than three years has been terminated, or possibly just iced for now.
January 29
NCAL Bancorp (NCAL) in Los Angeles has agreed to a recapitalization that would give it new ownership.
The $342 million-asset company said Monday that it will receive a $25 million infusion. A California investor will buy $23.5 million of newly issued common stock for just under 55 cents a share, and NCAL's existing directors will provide roughly $1.5 million in capital. The company's stock was trading at $1.05 a share Tuesday morning.
The California investor, whom the news release did not identify, would become NCAL's majority owner after the recapitalization.
The recapitalization requires NCAL to buy back its $10 million of outstanding Troubled Asset Relief Program preferred stock from the Treasury Department, and that the company resolve the Department of Justice's inquiry into transactions with firms that process transactions for payday lenders. The Justice Department has inquired about transactions NCAL cleared for payments processors that may have worked for payday lenders, as part of an
NCAL said the recapitalization will allow it to meet the capital requirements of its regulatory orders. NCAL is operating under a
"This recapitalization will strengthen the balance sheet and provide a solid foundation for customer growth and community support," Joe Kornwasser, NCAL's chairman, said in a press release.
In January, NCAL's agreement to sell itself to Grandpoint Capital
FIG Partners and King, Holmes, Paterno & Berliner advised NCAL on the recapitalization, which the company expects to take place in the first quarter.