A Trap For The Unwary Community Banker

Law360, New York (November 15, 2011, 1:48 PM EST) -- Federal bank regulators have at their disposal a wide variety of enforcement mechanisms. Using these tools, they can circumscribe or even steer the operations of an underperforming financial institution. These range from matters requiring attention to formal enforcement actions and prompt corrective action directives.

On the whole, these enforcement mechanisms are applied sequentially, increasing in severity if an institution fails to comply with the previous enforcement device. In an important aspect, however, the “troubled condition” designation exists outside this traditional enforcement structure and therefore has consequences...
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