Enforcement
If the Federal Reserve determines that a state member bank or bank
holding company has problems that affect the institution’s safety and soundness
or is not in compliance with laws and regulations, it may take a supervisory
action to ensure that the institution undertakes corrective measures. Typically,
such findings are communicated to the management and directors of a banking
organization in a written report. The management and directors are then asked to
address all identified problems voluntarily and to take measures to ensure that
the problems are corrected and will not recur. Most problems are resolved
promptly after they are brought to the attention of an institution’s management
and directors. In some situations, however, the Federal Reserve may need to take
an informal supervisory action, requesting that an institution adopt a board
resolution or agree to the provisions of a memorandum of understanding to
address the problem.
If necessary, the Federal Reserve may take formal enforcement actions
to compel the management and directors of a troubled banking organization, or
persons associated with it, to address the organization’s problems. For example,
if an institution has significant deficiencies or fails to comply with an
informal action, the Federal Reserve may enter into a written agreement with the
troubled institution or may issue a cease-and-desist order against the
institution or against an individual associated with the institution, such as an
officer or director. The Federal Reserve may also assess a fine or remove an
officer or director from office and permanently bar him or her from the banking
industry or both. All final enforcement orders issued by the Board and all
written agreements executed by Reserve Banks are available to the public on the
Board’s web site.