The Office of the Comptroller of the Currency has released formal agreements it made with seven banks, instructing them to modify certain procedures, policies, and products to maintain safety and soundness.
First Charter Bank in Beverly Hills was cited by the OCC because of problems with its credit card merchant account program. The agency said last week that it told the bank to write a plan to supervise this program, including limiting total merchant processing sales and setting certain guidelines for high-risk sales.
Besides drafting other strategic, capital, and credit risk management plans, the $135 million-asset bank must create a conflict-of-interest policy to limit involvement in loan approvals of bankers who may benefit from the loans acceptance.
First Charter is being acquired by First Community Bancorp of Rancho Santa Fe, Calif., and if the merger goes through would no longer be under the merchant processing guidelines.
Clear Lake National Banks agreement with the OCC relates to its foreign businesses and foreign bank accounts. The agreement states that the $53 million-asset San Antonio bank must adhere to the Bank Secrecy Act and rules of the Office of Foreign Asset Control by reporting and identifying suspect and large transactions, transfers to offshore bank accounts, and any accounts opened by currency exchangers, specifically those with Spanish surnames. In addition the bank must do an internal loan review and set up plans to increase its capital ratios and liquidity.
After losses of about $605,000 in the first quarter and chargeoffs nearly as large, Harbor Bank in Gig Harbor, Wash., has been instructed to improve several items on its balance sheet. The $81 million-asset bank was told to do an independent loan review and adhere to a plan for achieving higher capital ratios. It must also develop a policy concerning the extension of overdrafts, including conditions and circumstances in which overdrafts would be charged off.
Harbor also was ordered to appoint a new senior loan officer and write a real estate appraisal policy that establishes internal procedures for evaluating appraisers performance.
The OCC also published agreements with First National Bank of Fleming in Fleming, Colo., and First National Bank of Three Rivers in Three Rivers, Mich., and it amended, by consent, agreements with Gold Country National Bank in Brownsville, Calif., and Granite National Bank in Bowling Green, Ohio.