Exhibit 10.2

 

UNITED STATES OF AMERICA

DEPARTMENT OF THE TREASURY

COMPTROLLER OF THE CURRENCY

 

In the Matter of:

)

 

Solera National Bank

)

AA-WE-10-120

Lakewood, Colorado

)

 

 

AMENDED CONSENT ORDER

 

The Comptroller of the Currency of the United States of America (“Comptroller”),
through his National Bank Examiner, has supervisory authority over the Solera
National Bank, Lakewood, Colorado (“Bank”).

 

On or about March 18, 2010, the Comptroller and the Bank, by and through its
duly elected and acting Board of Directors (“Board”), entered into a Consent
Order designed  principally to address a violation of 12 C.F.R. § 21.21 (the
“March 18, 2010 Consent Order”).

 

During an examination that began on or about September 6, 2010, the
Comptroller’s National Bank Examiner discovered certain unsafe or unsound
practices relating to credit risk management and administration and strategic
planning.

 

Now, the Bank, by and through its Board, executed a “Stipulation and Consent to
the Issuance of an Amended Consent Order,” dated December 16, 2010, that is
accepted by the Comptroller.  By this Stipulation and Consent, which is
incorporated by reference, the Bank has consented to the issuance of this
Amended Consent Order by the Comptroller.

 

Pursuant to the authority vested in it by the Federal Deposit Insurance Act, as
amended, 12 U.S.C. § 1818, the Comptroller hereby orders that:

 

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Article I

 

Replacement of March 18, 2010 Consent Order

 

(1)                                  The articles of the March 18, 2010 Consent
Order are replaced and superseded in their entirety by this Amended Consent
Order (hereafter referred to as the “Order”).

 

Article II

 

Compliance Committee

 

(1)                                  Within five (5) days of this Order, the
Board shall appoint a Compliance Committee of at least five (5) Board members
and, of which no more than two (2) shall be employees of the Bank or any of its
affiliates (as the term “affiliate” is defined in 12 U.S.C. § 371c(b)(1)), or a
family member of any such person.  Upon appointment, the names of the members of
the Compliance Committee and, in the event of a change of the membership, the
name of any new member shall be submitted in writing to the Assistant Deputy
Comptroller.

 

(2)                                  The Compliance Committee shall be
responsible for monitoring and coordinating the Bank’s adherence to the
provisions of this Order and shall meet at least monthly.

 

(3)                                  By no later than December 31, 2010, and by
the end of every calendar month thereafter, the Compliance Committee shall
submit a written progress report to the Board setting forth in detail:

 

(a)                                  a description of the action needed to
achieve full compliance with each Article of this Order;

 

(b)                                 actions taken to comply with each Article of
this Order; and

 

(c)                                  the results and status of those actions.

 

(4)                                  The Board shall provide a summary report of
the progress reached in attaining compliance with each Article of this Order to
the Assistant Deputy Comptroller within thirty (30) days of the end of each
calendar quarter.

 

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(5)                                  All reports or plans which the Bank or
Board has agreed to submit to the Assistant Deputy Comptroller pursuant to this
Order shall be forwarded to the:

 

Assistant Deputy Comptroller

Denver Field Office

1225 17th Street, Suite 450

Denver, Colorado 80202

 

(6)                                  The Board shall ensure that the Bank has
processes, personnel, and control systems to ensure implementation of and
adherence to the policies, procedures and programs required by this Order.

 

Article III

 

Capital and Strategic Plan

 

(1)                                Effective immediately, the Bank shall only
declare dividends when:

 

(a)                                  the Bank is in compliance with the Bank’s
Two-Year Plan as described below;

 

(b)                                 the Bank is in compliance with 12 U.S.C.
§§ 56 and 60; and

 

(c)                                  the Bank has received a prior written
determination of no supervisory objection from the Assistant Deputy Comptroller.

 

(2)                                  Within ninety (90) days of this Order, the
Board shall develop a written strategic plan for the Bank covering at least the
next two years (hereafter the “Bank’s Two-Year Plan”), complete with specific
time frames that incorporate the strategic and other requirements of this
Article.  A copy of the Bank’s Two-Year Plan shall be forwarded to the Assistant
Deputy Comptroller for a prior written determination of no supervisory
objection.

 

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(3)                                  The Bank’s Two-Year Plan shall establish
objectives and projections for the Bank’s overall risk profile, earnings
performance, growth expectations, balance sheet mix, off-balance sheet
activities, liability structure, capital and liquidity adequacy, product line
development and market segments that the Bank intends to promote or develop,
together with specific strategies to achieve those objectives, that are
specific, measurable, verifiable, and, at a minimum, address or include:

 

(a)                                  an assessment of the Bank’s present and
future operating environment;

 

(b)                                 the development of strategic goals and
quantifiable measures with specific implementation dates, individual
responsibilities, and accountability to ensure the Bank attains sustained
earnings to support capital and liquidity;

 

(c)                                  the identification of present and future
product line development (assets and liabilities) and market segments that the
Bank intends to develop or promote;

 

(d)                                 an evaluation of the Bank’s internal
operations, staffing requirements, Board and management information systems and
policies and procedures for their adequacy and contribution to the
accomplishment of the goals and objectives developed pursuant to this Article;

 

(e)                                  recognition that the Bank cannot offer or
introduce new products, enter new market segments, or significantly expand any
existing product unless it first develops appropriate systems, controls, and
expertise to manage and control the associated risks;

 

(f)                                    specific management, staffing and other
changes necessary to implement the Bank’s Two-Year Plan and attain compliance
with this Order;

 

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(g)                                 concentration limits that reflect the
Board’s objectives and limitations for the Bank’s risk profile;

 

(h)                                 specific plans for the reduction of
criticized assets with target reductions by month;

 

(i)                                     specific plans for the maintenance of
adequate capital and sufficient to be well capitalized under 12 C.F.R. Part 6;

 

(j)                                     a dividend policy that only permits the
declaration of a dividend in accordance with Paragraph (1) of this Article;

 

(k)                                  projections for capital and liquidity
requirements based upon a detailed analysis of the Bank’s assets, liabilities,
earnings, fixed assets, and off-balance sheet activities; and

 

(l)                                     a financial forecast to include
projections for major balance sheet and income statement accounts and desired
financial ratios over the next two years that shall address or include
consideration of the requirements of this Article.

 

(4)                                  Upon receiving a written determination of
no supervisory objection from the Assistant Deputy Comptroller, the Board shall
immediately implement and thereafter ensure  adherence to the Bank’s Two-Year
Plan.

 

Article IV

 

BSA Program

 

(1)                                  To provide for compliance with the Bank
Secrecy Act, as amended (31 U.S.C. §§ 5311 et seq.), the regulations promulgated
thereunder at 31 C.F.R. Part 103, as amended, and 12 C.F.R. Part 21, Subparts B
and C, and the rules and regulations of the Office of Foreign

 

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Assets Control (“OFAC”) (collectively referred to as the “Bank Secrecy Act” or
“BSA”), the Board shall periodically (no less than every two years) perform a
comprehensive BSA risk assessment, to include at a minimum:

 

(a)                                  identification of the risks associated with
the Bank’s products, services, customers, and geographies served; and

 

(b)                                 an evaluation of its existing internal
controls to determine the need for enhanced controls to mitigate the risks
identified in Subparagraph (1)(a) of this Article.

 

(2)                                  Effective as of the date of this Order, the
Bank shall ensure Bank adherence to a written program of policies and procedures
to provide for compliance with the BSA (“Risk-Based BSA Program”) to include
consideration of:

 

(a)                                  the findings of the BSA risk assessment;

 

(b)                                 the deficiencies identified in the Report of
Examination conducted as of September 30, 2009 (the “2009 ROE”);

 

(c)                                  the requirements of 12 C.F.R. § 21.21; and

 

(d)                                 the requirements of this Order relating to
Compliance Staff, Training, Internal Controls and Audit.

 

Article V

 

BSA Compliance Staff

 

(1)                                  The Board shall ensure that the BSA Officer
has sufficient training, authority, and skill to perform the assigned
responsibilities.

 

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Article VI

 

BSA Training

 

(1)                                  The Risk-Based BSA Program shall ensure a
comprehensive training program for all appropriate operational and supervisory
personnel to ensure their awareness of their specific assigned responsibilities
for compliance with the requirements of the Bank Secrecy Act.  The program must
include advanced training for supervisory personnel as appropriate for their
respective BSA responsibilities.

 

Article VII

 

BSA Internal Controls

 

(1)                                  The Risk-Based BSA Program shall maintain
and implement policies and procedures for the appropriate identification and
monitoring of transactions that pose greater than normal risk for compliance
with the BSA, to include at a minimum:

 

(a)                                  the creation of a list of customers or
accounts exhibiting high risk characteristics for money laundering, terrorist
financing, or other illicit activity;

 

(b)                                 enhanced policies and procedures for
recording, maintaining, and recalling information about transactions that pose
greater than normal risk for compliance with the BSA;

 

(c)                                  adequate controls and procedures to
identify and report suspicious and large currency transactions;

 

(d)                                 well-defined policies and procedures for
investigating and resolving transactions that have been identified as unusual or
suspicious;

 

(e)                                  procedures to maintain records on monetary
instrument transactions and funds transfers, as required by the BSA; and

 

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(f)                                    policies and procedures to ensure that
new locations, products and services are included, monitored and assessed within
the Bank’s program for compliance with the BSA.

 

(2)                                  The Risk-Based BSA Program shall maintain
and implement policies and procedures to provide for the Bank’s monitoring of
suspicious cash, monetary instruments, wire transfers, and other activities for
all types of transactions, accounts, customers, products, services, and
geographic areas, to include at a minimum:

 

(a)                                  periodic reviews of cash purchases of
monetary instruments;

 

(b)                                 periodic analysis of aggregate cash,
monetary instrument, and wire activity;

 

(c)                                  periodic analysis of Currency Transaction
Report filings;

 

(d)                                 periodic review and analysis of high risk
transactions, accounts, customers, products, services, and geographic areas; and

 

(e)                                  submission of SARs based on these reviews
and analyses.

 

(3)                                  The Risk-Based BSA Program shall maintain
policies and procedures for expanded account-opening procedures for all accounts
that pose greater than normal risk for compliance with the Bank Secrecy Act.

 

(4)                                  Effective as of the date of this Order, the
Board shall ensure that the BSA Program includes policies and procedures for the
maintenance of an integrated, accurate system for all Bank areas to produce
periodic reports designed to identify unusual or suspicious activity, including
patterns of activity, to monitor and evaluate unusual or suspicious activity,
and to maintain accurate information needed to produce these reports.

 

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(5)                                  The BSA Officer or designee shall
periodically review, not less than each calendar year, all account documentation
for all high-risk customers and accounts and the related accounts of those
customers at the Bank to determine whether the account activity is consistent
with the customer’s business or occupation and the stated purpose of the
account.

 

Article VIII

 

BSA Audit

 

(1)                                  The Board shall ensure the continuance of
an external BSA audit, that is independent, adequate in scope and frequency, and
designed to ensure compliance with the BSA in all areas of the Bank.

 

Article IX

 

Credit Risk Management

 

(1)                                  Effective as of the date of this Order, the
Board shall ensure the Bank manages and controls the risk in the loan portfolio,
to include, at a minimum:

 

(a)                                  adherence to established commercial real
estate lending (“CRE”) concentration limits stratified by type, locality and
other meaningful measures supported by written analysis;

 

(b)                                 the establishment of a concentration limit
for the Business Manager Accounts Receivable line of business and an established
limit for aggregate outstanding individual customer invoices;

 

(c)                                  a workout policy that outlines reasonable
loan terms and amortization periods;

 

(d)                                 measures to monitor and reduce aggregate
criticized assets;

 

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(e)                                  policies and procedures to ensure that
Criticized Asset Action Plans include the following information:

 

(i)                                     an identification of the expected
sources of repayment and an analysis of their adequacy;

 

(ii)                                the appraised value of supporting collateral
and the position of the Bank’s lien on such collateral where applicable as well
as other necessary documentation to support the collateral valuation; and

 

(iii)                             the proposed action to eliminate the basis of
criticism and the time frame for its accomplishment, including the rationale
supporting any workout arrangement or concession.

 

Article X

 

Credit Underwriting and Administration

 

(1)                                  Within one-hundred and twenty (120) days of
this Order, the Board shall prepare, adopt and thereafter adhere to, revisions
to the Bank’s loan policy, as well as any necessary procedures, to address
weaknesses in the Bank’s credit risk management and underwriting, that, at a
minimum, include:

 

(a)                                  policies and procedures to ensure that
management does not make loans that are not in conformance with the Board’s risk
appetite, to include at a minimum:

 

(i)                                     processes to ensure credit risk
selection is prudent;

 

(ii)                                  established limits on the number of policy
exceptions for individual loans;

 

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(iii)                               tracking and identification of exceptions
for loans outside the Bank’s trade area that would require loan committee
approval; and

 

(iv)                              established limits on the size and complexity
of new loans commensurate with the Bank’s level of expertise and ability to
manage;

 

(b)                                 policies and procedures designed to reduce
exceptions to the Loan Policy, underwriting guidelines, and supervisory loan to
value limits, for all loans to include, at a minimum, procedures to hold
employees and officers accountable for non-compliance with the Bank’s loan
policy and other underwriting requirements;

 

(c)                                  procedures to ensure that loans are
properly monitored to include periodic receipt, analysis and documentation of
sufficient financial and operating information to measure and monitor the
borrower’s and guarantor’s financial condition and repayment ability, to include
periodic (at least annually) cash flow analysis of income-producing collateral;
and

 

(d)                                 policies and procedures designed to ensure
the Bank obtains appraisals in  compliance with USPAP, 12 CFR 34, Advisory
Letter 2003-9, and OCC Bulletin 2005-6, to include the establishment of a policy
requiring a meaningful, independent review of all appraisals to include analysis
commensurate with the type, size and complexity of the property being appraised.

 

(2)                                  The Board shall take the necessary steps to
ensure that current and satisfactory credit and proper collateral information is
maintained on all loans.  Within thirty (30) days of

 

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notification, the Board shall ensure that the Bank makes every effort to obtain
any missing credit or collateral information described in any Report of
Examination, in any internal or external loan review, or in any listings of
loans lacking such information provided to management by the National Bank
Examiners at the conclusion of an examination.

 

(3)                                  The Board shall submit a copy of the
revised policies and procedures required by this Article to the Assistant Deputy
Comptroller.

 

Article XI

 

HELOC Risk Management

 

(1)                                  Within sixty (60) days of this Order, the
Board shall develop, implement, and thereafter ensure Bank adherence to a
written program designed to assess and manage the credit risk associated with
the Bank’s Home Equity Line of Credit (“HELOC”) portfolio consistent with OCC
Bulletin 2005-22, Home Equity Lending: Credit Risk Management Guidance, dated
May 16, 2005.  The program shall include, but not be limited to:

 

(a)                                  procedures to identify high-risk accounts
at an early stage, which may include but should not necessarily be limited to:

 

(i)                                   refreshing credit scores periodically;

 

(ii)                                evaluating available risk scores such as
behavior, bankruptcy, deposit and overdraft protection, or other bureau risk
scores for use in improving the targeting of increased customer risk;

 

(iii)                             requesting additional financial information
where decisions depend on borrower repayment capacity; and

 

(b)                                 implement portfolio-wide account management
practices and management information systems to identify emerging risks; and

 

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(c)                                  portfolio-level multi-factor stress testing
and/or sensitivity analysis to quantify the impact of changing economic
conditions (home values, interest rates, etc.) on the risk in the HELOC
portfolio.

 

(2)                                  Upon implementation, the Board shall submit
a written description of the program required by this Article to the Assistant
Deputy Comptroller.

 

(3)                                  At least annually, the Board shall prepare
a written assessment of the Bank’s credit risk associated with the HELOC
portfolio, which shall evaluate the Bank’s progress under the aforementioned
program.

 

Article XII

 

Credit Risk Ratings and Nonaccrual Recognition

 

(1)                                  Effective immediately, the Board shall take
the necessary steps to ensure that the risk associated with the Bank’s loans is
properly reflected and accounted for on the Bank’s books and records to ensure
that:

 

(a)                                  the Bank’s loans and other assets are
appropriately and timely risk rated and charged off using a loan grading system
that is based upon current facts, existing repayment terms and that is
consistent with the guidelines set forth in Rating Credit Risk, A-RCR, of the
Comptroller’s Handbook;

 

(b)                                 the Bank’s loans and other assets are timely
placed on nonaccrual in accordance with the guidelines set forth in the Call
Report; and

 

(c)                                  lending officers conduct periodic reviews
for determining the appropriate risk rate and accrual determinations for their
respective credits.

 

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(2)                                  By no later than February 28, 2011, the
Board shall prepare a written program designed to ensure that the Bank complies
with Subparagraphs (a), (b) and (c) of this Article, that contains at a minimum:

 

(a)                                  immediate and ongoing training for the
lending staff with respect to the application of Subparagraphs (a) and (b) of
this Article;

 

(b)                                 procedures to ensure the lending staff is
held accountable for failing to appropriately and timely risk rate and/or place
loans on nonaccrual in periodic performance reviews and compensation.

 

Article XIII

 

Allowance for Loan and Lease Losses

 

(1)                                  By no later than December 31, 2010, the
Board shall ensure adherence to a set of written policies and procedures for
maintaining an appropriate Allowance for Loan and Lease Losses (“Allowance”) in
accordance with GAAP.  The Allowance policies and procedures shall be consistent
with the guidance set forth in the Federal Financial Institutions Examination
Council’s “Interagency Policy Statement on the Allowance for Loan and Lease
Losses” dated December 13, 2006 (OCC Bulletin 2006-47), and July 20, 2001 (OCC
Bulletin 2001-37).

 

(2)                                  The program shall provide for a process for
summarizing and documenting, for the Board’s review and approval, the amount to
be reported in the Call Reports for the Allowance.  Any deficiency in the
Allowance shall be remedied in the quarter it is discovered, prior to the filing
of the Call Report, by additional provisions from earnings.  Written
documentation shall be maintained indicating the factors considered and
conclusions reached by the Board in determining the adequacy of the Allowance.

 

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Article XIV

 

Closing

 

(1)                                  Although the Bank is required to submit
certain proposed actions and programs for the review or prior written
determination of no supervisory objection of the Assistant Deputy Comptroller,
the Board has the ultimate responsibility for proper and sound management of the
Bank and the completeness and accuracy of the Bank’s books and records.

 

(2)                                  If, at any time, the Comptroller deems it
appropriate in fulfilling the responsibilities placed upon him by the several
laws of the United States to undertake any action affecting the Bank, nothing in
this Order shall in any way inhibit, estop, bar or otherwise prevent the
Comptroller from so doing.

 

(3)                                  The provisions of this Order shall remain
effective and enforceable, except to the extent that, and until such time as,
any provisions of this Order shall have been amended, suspended, waived, or
terminated in writing by the Comptroller.

 

(4)                                  In each instance in this Order in which the
Bank or the Board is required to ensure implementation of or adherence to, or to
undertake to perform, an obligation of the Bank, the Board shall:

 

(a)                                  authorize and adopt such actions on behalf
of the Bank as may be necessary or appropriate for the Bank to perform its
obligations under this Order;

 

(b)                                 require the timely reporting by Bank
management of such actions directed by the Board to be taken under the terms of
this Order;

 

(c)                                  follow up on any non-compliance with such
actions in a timely and appropriate manner; and

 

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(d)                                 require corrective action be taken in a
timely manner for any non-compliance with such actions.

 

(5)                                  This Order is intended to be, and shall be
construed to be, a final order issued pursuant to 12 U.S.C. § 1818(b), and
expressly does not form, and may not be construed to form, a contract binding
the Comptroller or the United States.

 

(6)                                  The terms of this Order, including this
Paragraph, are not subject to amendment or modification by any extraneous
expression, prior agreements or prior arrangements between the parties, whether
oral or written.

 

IN TESTIMONY WHEREOF, the undersigned has hereunto set her hand.

 

 

/s/ Karen M. Boehler

 

December 16, 2010

Karen M. Boehler

Date

Assistant Deputy Comptroller

 

Denver Field Office

 

 

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