FDIC Flags Dissenters, Raises Ire

In its most recent press release listing the banks that received cease-and-desist orders, the Federal Deposit Insurance Corp. included a new section: the dissenters. For the first time in the nearly 20 years that enforcement actions have been made public, the FDIC released a notice of charges against the banks that refused to consent to the proposed orders. This will become routine, but given the graphic nature of the notices — they include exam data and details of alleged wrongdoing — industry insiders and observers say such disclosure could harm banks. Some also contend that the change is meant to dissuade banks from contesting regulatory orders, just as more are starting to do so. "This seems like a ploy to beat bankers into submission," said Joseph D. McKean Jr., the chairman and owner of the $720 million-asset Frontier State Bank in Oklahoma City, which went to court this summer over an FDIC order and is awaiting a decision on the case. "It is not a well-thought-out tactic. Anything the FDIC posts in this regard is likely to hurt a bank." According to the FDIC, the change is not meant to harm or bully the dissenting banks; rather, it is intended to make the enforcement process more visible.