Fed Issues Enforcement Actions Against Two Bank Holding Firms
September 14 2010 - 11:30AM
Dow Jones News
The U.S. Federal Reserve issued Tuesday enforcement actions
against bank holding companies First Security Group, Inc. (FSGI)
and Butte State Company, moves taken to maintain financial
soundness at the firms, according to the Fed.
According to the agreement, Tennessee-based First Security
cannot declare or pay any dividends without prior written approval
from the Fed. The firm, which owns and controls FSGBank, must also
submit within 60 days a plan to maintain "sufficient capital" on a
"consolidated basis," among other restrictions.
Additionally, Butte State must adhere to similar guidelines. The
Fed has called on the Nebraska-based financial firm to shore up its
lending and credit administrative processes. Butte State must
submit a plan to the Fed within 30 days of the issued
agreement.
Among other actions, Butte State must "take all necessary steps
to elect a qualified outside director with banking or financial
experience" to head its subsidiary, Butte State Bank.
-By Darrell A. Hughes, Dow Jones Newswires; 202-862-6684;
darrell.hughes@dowjones.com
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