Exhibit 10.1


 


FEDERAL DEPOSIT INSURANCE
CORPORATION


 


WASHINGTON, D.C.


 


	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
  CONSENT ORDER,

  
	
  In the Matter of

  	
  )

  	
  ORDER FOR RESTITUTION,

  
	
   

  	
  )

  	
  AND ORDER TO PAY

  
	
  MONTEREY COUNTY BANK

  	
  )

  	
  CIVIL MONEY PENALTY

  
	
  MONTEREY, CALIFORNIA

  	
  )

  	
   

  
	
   

  	
  )

  	
  Docket FDIC-09-081b

  
	
  (INSURED STATE NONMEMBER BANK)

  	
  )

  	
  & FDIC-10-221k

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  



 


The Federal Deposit Insurance Corporation (“FDIC”) is the appropriate
Federal banking agency for Monterey County Bank, Monterey, California (“Bank”)
under Section 3(q) of the Federal Deposit Insurance Act (“FDI Act”), 12 U.S.C.
§ 1813(q)(3).


 


The FDIC has reason to
believe that the Bank has engaged in unsafe or unsound banking practices, and
engaged in deceptive practices in violation of Section 5 of the Federal Trade
Commission Act (“Section 5”), 15 U.S.C. § 45(a)(1), and the Fair Debt
Collection Practices Act (“FDCPA”), 15 U.S.C. § 1601 et seq., as amended, in
connection with the Bank’s credit card relationship with Tighorn Financial
Services, LLC (“Tighorn”) and the Bank’s stored value debit card relationship
with EDebit Pay, LLC aka EDP Technologies Corporation (“EDP”).


 


The Bank, by and through its duly elected and acting Board of Directors
(“Board”), has executed a Stipulation to the Issuance of a Consent Order, Order
for Restitution and Order to Pay (“Stipulation”) dated August 27, 2010, that is
accepted by the FDIC.  With the
Stipulation, the Bank has consented, without admitting or denying any charges
of unsafe or unsound banking practices or other violations of law or regulation
to the issuance of this Consent Order, Order for 


 

















 


Restitution and Order to Pay Civil Money Penalty (collectively referred
to as “Order”) by the FDIC.


 


Having determined that the
requirements for issuance of an order under Sections 8(b) and 8(i) if the FDI
Act, 12 U.S.C. § 1818(b) & (i) have been satisfied, the FDIC hereby orders
the Bank and its institution-affiliated parties, as
that term is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u), to take
the following actions.


 


I.                                         CONSENT
ORDER


 


A.           The FDIC hereby
orders that the Bank, its institution-affiliated parties and its successors and
assigns:


 


1.                                       Refrain from
offering credit cards which are intended for the transfer and payment of
charged-off consumer debt (“Balance Transfer Credit Cards”) without disclosing
the age of the debt and the fact that the transferred debt is time-barred
and/or no longer reportable by credit reporting agencies;


 


2.                                       Refrain from
offering Balance Transfer Credit Cards to consumers when the Bank does not have
sufficient substantiation that the debtor is obligated for the amount of
indebtedness subject to the Balance Transfer;


 


3.                                       Refrain from
misleading consumers about the utility of Balance Transfer Credit Cards
advertised as credit cards when, in fact, the consumers have no available credit
at the time the credit card is issued;


 


4                                          Refrain from
misrepresenting debt collection programs as a credit card offer;


 


5.                                       Refrain from
misleading consumers regarding the interest charged on debt transferred to
Balance Transfer Credit Cards; and


 


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6.                                       Refrain from
misleading consumers concerning the fees associated with stored value debit
cards through website solicitations for the cards.


 


B.             It is further ordered that the Bank, its institution-affiliated parties,
and its successors and assigns, take affirmative action as follows:


 


1.                                       BOARD OF DIRECTORS


 


(a)                                  From the effective date of this Order, the Board shall participate fully
in the oversight of the Bank’s compliance management system, to include
assuming full responsibility for the approval of sound compliance policies and
objectives and for the supervision of all the Bank’s compliance-related
activities, consistent with the role and expertise commonly expected for
directors of banks of comparable size and complexity.


 


(b)                                 Within 30 days from the effective date of this Order, the Bank’s Board
shall establish a compliance committee comprised of at least three directors
who are not officers of the Bank (“Compliance Committee”).


 


(i)                                     The Compliance Committee shall meet at least monthly and, at a minimum,
the following areas shall be reviewed and approved:  minutes of the Compliance Committee,
Compliance Officer reports, Compliance Management Program audit reports,
compliance program policies, and compliance with this Order.


 


(ii)                                  The Compliance Committee shall report its monthly discussions to the
Board and the Board minutes shall document the review and approval of all items
before the Board, including the names of any dissenting directors.


 


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(iii)                               The Board, in conjunction with the Compliance Committee, shall allocate
resources that are:


 


(A)                              Commensurate with the level of complexity of the Bank’s operations to
ensure the establishment and implementation of an adequate Compliance
Management System, including procedures ensuring the Bank’s compliance with
consumer protection laws, regulatory guidance, regulations, and policies (“Consumer
Laws”); and


 


(B)                                Sufficient to ensure the Bank’s compliance with this Order.


 


(iv)                              The Board, in conjunction with the Compliance Committee, shall:


 


(A)                              Ensure that the duties and responsibilities of the Compliance Officer are
clearly defined and provide for accessibility to both the Board and the
Compliance Committee;


 


(B)                                Require the Compliance Officer to provide to the Compliance Committee
monthly written reports, including but not limited to the enactment and/or
promulgation of new Consumer Laws and changes to existing Consumer Laws,
training performed, monitoring and audits performed, corrective action taken,
and compliance with this Order;


 


(C)                                Ensure that the Compliance Officer has and retains sufficient authority
and independence to implement policies related to Consumer Laws and to
institute corrective action as needed. 
This authority shall include the ability to cross departmental lines,
have access to all areas of the Bank’s operations, and effectuate corrective
action upon discovering deficiencies; and


 


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(D)                               Ensure that the Compliance Officer receives ongoing training, sufficient
time, and adequate resources to effectively oversee, coordinate, and implement
the Bank’s Compliance Management System.


 


(c)                                  Within 90 days from the effective date of this Order, the Board shall
develop and adopt a comprehensive educational program for periodic training for
each member of the Board.  The
educational program shall specifically address Consumer Laws.


 


2.                                       OVERSIGHT OF THIRD-PARTY AGREEMENTS AND SERVICES


 


(a)                                  Within 60 days from the effective date of this Order, the Bank shall
develop and maintain effective monitoring, training, and audit procedures to
review each aspect of the Bank’s agreements with third parties and the services
performed for the Bank pursuant to these agreements (“Third-Party Agreements
and Services”).  The policies and
procedures shall, at a minimum, provide for:


 


(i)                                     Bank review and approval of copies of (A) all marketing and solicitation
materials, including direct mail or internet solicitations, promotional
materials, advertising, telemarketing scripts (“Marketing and Solicitation
Materials”), and (B) other materials provided to consumers generated in
connection with the administration and servicing of the Third-Party Agreements
and Services;


 


(ii)                                  Maintenance of records of all service provider agreements and approved
marketing and solicitation materials, 
including any changes or amendments with respect to such materials;


 


(iii)                               Monitoring of the performance of marketing and solicitation programs for
new accounts;


 


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(iv)                              Prompt notification to the Bank by any third-party provider of all
regulatory agencies’ inquiries, customer complaint correspondence, and/or legal
action received from any third party with respect to third-party debit and
credit card programs (other than routine requests such as requests to cease and
desist collection contact), and maintenance by the Bank of all such documents;


 


(v)                                 Procedures for promptly addressing and resolving consumer complaints
regarding third-party debit and credit card programs, regardless of the source;


 


(vi)                              Bank review of all third-party debit and credit card program partners’
credit, fraud, and risk management materials, including policy manuals and
practices, to determine compliance with all Consumer Laws, and


 


(vii)                           An effective training program that includes comprehensive training in all
Consumer Laws, including Section 5, the FDCPA, and all implementing rules and
regulations, regulatory guidance, and statements of policy for appropriate Bank
personnel.


 


(b)                                 During the life of this Order, the Bank shall perform due diligence on a
semi-annual basis to ensure that third parties have in place an adequate
training program to ensure that their employees act in compliance with consumer
protection laws and regulations, including, but not limited to the FTC Act, the
FDCPA, the Equal Credit Opportunity Act, and all implementing rules and
regulations, regulatory guidance, and statements of policy.


 


(c)                                  During the life of this Order, the Bank’s Compliance Committee
established pursuant to paragraph 1(b) of section I(B) of this Order shall, on
a semi-annual basis, submit a written report to the Board and senior management
as to whether the third parties are in compliance with federal consumer
protection laws and implementing rules and regulations, 


 


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regulatory guidance and statements of
policy.  The written report shall include
potential violations, deficiencies or other concerns.  The Board shall be responsible for ensuring
that corrective actions are taken to address the findings of the written
report.


 


3.                                       COMPLIANCE MANAGEMENT SYSTEM


 


(a)                                  Within 60 days from the effective date of this Order, the Bank shall
develop and implement a Compliance Management System that is commensurate with
the level of complexity of the Bank’s operations.


 


(b)                                 The Compliance Management System shall include the development and
implementation of a comprehensive written compliance program (“Compliance Program”)
which shall include all of the Consumer Laws to which the Bank is subject.  At a minimum, the Compliance Program shall
provide for and include:


 


(i)                                     Development and implementation of operating procedures for each
compliance and fair lending law and regulation to which the Bank is
subject.  Operating procedures shall be
distributed to all employees having responsibilities that relate to applicable
Consumer Laws.


 


(ii)                                  Development and implementation of a formal training program for all
personnel who have compliance responsibilities to ensure that all such
personnel are thoroughly knowledgeable of applicable compliance requirements.


 


(iii)                               Development and implementation of a program to monitor the Bank’s
compliance with Consumer Laws.


 


(iv)                              Development and implementation of procedures to ensure follow-up actions
and corrective attention are provided to exceptions identified during
monitoring.


 


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(c)                                  The Board shall review the Compliance Program on an annual basis.  Any subsequent modifications to the
Compliance Program shall be approved by the Board, in which approval shall be
recorded in the minutes of the Board. 
Thereafter, the Bank shall follow the written compliance program and/or
any subsequent modification thereto.


 


4.                                       COMPLIANCE OFFICER


 


(a)                                  During the life of this Order, the Bank shall have and retain a qualified
Compliance Officer who possesses the requisite knowledge and experience to
administer an effective Compliance Management System, including experience with
third-party debit and credit card agreements. 
The Compliance Officer shall be independent of the Bank’s debit and
credit card operations.  The Compliance
Officer shall be given stated written authority by the Bank’s Board to
implement and supervise the Bank’s Compliance Program, including but not
limited to providing training for the Bank’s employees in all Consumer Laws,
establishing internal controls and procedures reasonably designed to prevent
violations of Consumer Laws, and performing or supervising periodic internal
audits, including audits of third-parties, to ascertain compliance with
Consumer Laws and the Bank’s Compliance Program.


 


(b)                                 The Compliance Management System shall provide sufficient staff personnel
to assist the Compliance Officer.


 


5.                                       INDEPENDENT AUDIT PROGRAM


 


(a)                                  Within 90 days from the effective date of this Order, the Bank shall have
an independent audit to ensure compliance with Consumer Laws.  The audit shall be conducted by qualified
personnel with experience in conducting independent audits of compliance
programs of banks of a comparable size and complexity.  The audit will assess the Bank’s 


 


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Compliance Program, and at a minimum, shall:


 


(i)                                     Define a comprehensive scope for the audit;


 


(ii)                                  Identify the number of transactions sampled by category or product type;


 


(iii)                               Identify deficiencies;


 


(iv)                              Provide descriptions of or suggestions for corrective actions and time
frames for correction; and


 


(v)                                 Establish follow-up procedures to verify that corrective actions were
implemented and effective.


 


(b)                                 Audit findings, deficiencies, and recommendations must be documented in a
written report and provided to the Audit Committee within 10 days after receipt
of the independent audit report.  In
addition, the audit reports should be thoroughly reviewed by the Board and be
fully documented in the Board’s minutes. 
The Bank shall forward a copy of the independent audit report to the
Regional Director of the FDIC’s San Francisco Regional Office (“Regional
Director”) within 10 days of receipt of the independent audit report.


 


(c)                                  Within 60 days of receipt of the independent auditor’s written report,
the Compliance Committee and the Board shall take action to address the audit’s
findings, correct any deficiencies noted, and implement any recommendations or
explain in writing, in a document signed by all Board members, why a particular
recommendation has not been implemented.


 


(d)                                 After receipt of the independent audit report, the Bank shall on an
annual basis conduct subsequent independent audits.  The subsequent audits shall comply with all
of the 


 


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provisions of this paragraph.


 


6.                                       CORRECTION OF VIOLATIONS OF LAW AND/OR REGULATIONS


 


(a)                                  Within 30 days of the effective date of this Order, the Bank shall, to
the extent possible, correct all violations of Consumer Laws.  In addition, the Bank shall ensure its future
compliance with all applicable Consumer Laws. 
The Bank’s actions as required by this paragraph shall be satisfactory
to the Regional Director as determined at subsequent examinations and/or
visitations.


 


(b)                                 During the life of this Order, the Bank shall not make, directly or
indirectly, any false, deceptive, or misleading representations with respect to
any extension of credit or other Bank product or service, including the
advertising, marketing, offering, soliciting, extending or servicing of any
extension of credit or other Bank product or service.


 


(c)                                  During the life of this Order, the Bank shall not, directly or
indirectly, engage in any unfair practices to collect any debt.


 


7.                                       FINANCIAL EDUCATION


 


Within 90 days from the effective date of this
Order, the Bank shall contribute an aggregate amount of $300,000 to established
local or national non-profit organizations for the specific purpose of consumer
financial education and counseling, in both English and Spanish, covering
topics including, but not limited to, credit cards, prepaid debit cards,
mortgages, overdraft programs, and other consumer financial products; credit
repair and restoration; budget creation and management.  The Bank must obtain the Regional Director’s
approval prior to the disbursement of funds to any specific organization.


 


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II.                                     ORDER FOR RESTITUTION AND OTHER RELIEF


 


It is further ordered that:


 


1.                                       RESERVE ACCOUNT


 


(a)                                  Within 10 days from the effective date of this Order, the Bank shall
reserve or deposit into a segregated deposit account (“Reserve Account”) an
amount not less than $1,500,000.


 


(b)                                 The Bank shall make all restitution payments required by paragraphs 3 and
4 of section II of this Order, regardless of whether the total of such payments
exceeds the initial funding of the Reserve Account.  The total cash restitution payments made by
the Bank as required by paragraphs 3 and 4 of section II of this Order shall
not exceed $2,500,000.


 


(c)                                  Funds remaining in the Reserve Account shall revert to the Bank after all
restitution payments required by paragraphs 3 and 4 of section II of this Order
have been satisfied.


 


2.                                       INDEPENDENT CERTIFIED ACCOUNTING FIRM


 


(a)                                  Within 30 days
from the issuance of this Order, the Bank shall retain, at its expense, an
independent certified accounting firm (“Firm”) acceptable to the Regional Director
to determine compliance with the restitution plans set forth in paragraphs 3
and 4 of section II of this Order.  The
Firm shall determine compliance in accordance with the attestation standards
established by the American Institute of Certified Public Accountants for
agreed-upon procedures for engagements and provide the reports called for in
paragraphs 3 and 4 of section II of this Order.


 


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(b)                                 Prior to the
engagement of the Firm, and no later than 15 days from the issuance of this
Order, the Bank shall submit the name and qualifications of the Firm, together
with the proposed engagement letter with the Firm and the proposed agreed-upon
procedures, to the Regional Director for non-objection.


 


(c)                                  The engagement
letter between the Bank and the Firm shall grant the FDIC access to the Firm’s
staff, work-papers, and materials prepared in the course of the Firm’s
engagement and preparation of the reports required by this Order.


 


(d)                                 To be
acceptable to the Regional Director, the Firm must be independent and, at a
minimum, comply with the Code of Conduct of the appropriate State Board of
Accountancy and meet the auditor independence requirements of the Securities
and Exchange Commission.


 


(e)                                  Within 15 days
after submission of the Firm’s name, the Regional Director shall notify the
Bank in writing of the FDIC’s objection or non-objection thereto.


 


3.                                       RESTITUTION PLAN FOR TIGHORN FINANCIAL SERVICES (“TIGHORN”) CREDIT CARD
PROGRAM


 


(a)                                  Within 60 days from the effective date of this Order, the Bank shall
prepare a comprehensive restitution plan (“Tighorn Restitution Plan”) for all
consumers who had or currently have a New Horizons credit card issued by the
Bank through an agreement with Tighorn (“Tighorn Eligible Consumers”).  The Bank shall submit the Tighorn Restitution
Plan to the Regional Director for his review, comment, and non-objection prior
to implementation.  The Tighorn
Restitution Plan shall require the following:


 


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(i)                                                 For all Tighorn Eligible Consumers who were issued New Horizons credit
cards before June 2008 and whose accounts are not in default, the Bank
shall make the following restitution and take the following equitable action:


 


(A)                         Reimbursement in cash for all interest charged and paid in cash by the
consumer on the amount of debt transferred to such accounts;


 


(B)                           Reimbursement in cash for the annual fee charged and paid in cash by the
consumer for the first year of such accounts; and


 


(C)                           Refrain from reporting any subsequent default on the account to any
Credit Reporting Agency (“CRA”), except as relates to purchases made by the
consumer on the New Horizons credit card;


 


(ii)                                              For all Tighorn Eligible Consumers who were issued New Horizons credit
cards before June 2008, made payments on their accounts, and whose
accounts are currently in default, the Bank shall make the following
restitution and take the following equitable action:


 


(A)                         Reimbursement in cash for all interest charged and paid in cash by the
consumer on the amount of debt transferred to such accounts;


 


(B)                           Reimbursement in cash for the annual fee charged and paid in cash by the
consumer for the first year of such accounts; and


 


(C)                           Pursue the reversal of any known reporting of default on such accounts to
any CRA and refrain from subsequently reporting any default on such accounts to
any CRA, except as relates to purchases made by the consumer on the New
Horizons credit card;


 


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(iii)                                           For all Tighorn Eligible Consumers who were issued New Horizons credit
cards before June 2008, made no payments on their accounts, and whose
accounts are currently in default, the Bank shall make the following
restitution and take the following equitable action:


 


(A)                         Pursue the reversal of all interest charged on the amount of debt
transferred to such accounts;


 


(B)                           Pursue the reversal of the annual fee charged to such accounts; and


 


(C)                           Pursue the reversal of any known reporting of default on such accounts to
any CRA and refrain from subsequently reporting any default on such accounts,
except as relates to purchases made by the consumer on the New Horizons credit
card;


 


(iv)                                          For all Tighorn Eligible Consumers who were issued New Horizons credit
cards from June 2008 through September 2008 and whose accounts are
not in default, the Bank shall make the following restitution and take the
following equitable action:


 


(A)                         Reimbursement in cash for the annual fee charged and paid in cash by the
consumer for the first year of such accounts; and


 


(B)                           Refrain from reporting any subsequent default on such accounts to any
CRA, except as relates to purchases made by the consumer on the New Horizons
credit card;


 


(v)                                             For all Tighorn Eligible Consumers who were issued New Horizons credit
cards from June 2008 through September 2008, made payments on their 


 


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accounts, and whose accounts are currently in
default, the Bank shall make the following restitution and take the following
equitable action:


 


(A)                         Reimbursement in cash for the annual fee charged and paid in cash by the
consumer for the first year of such accounts; and


 


(B)                           Pursue the reversal of any known reporting of default on such accounts to
any CRA and refrain from subsequently reporting any default on such accounts to
any CRA, except as relates to purchases made by the consumer on the New
Horizons credit card;


 


(vi)                                          For all Tighorn Eligible Consumers who were issued New Horizons credit
cards from June 2008 through September 2008, made no payments on
their accounts, and whose accounts are currently in default, the Bank shall
make the following restitution and take the following equitable action:


 


(A)                         Pursue the reversal of all interest charged on the amount of debt
transferred to such accounts;


 


(B)                           Pursue the reversal of the annual fee charged to such accounts; and


 


(C)                           Pursue the reversal of any known reporting of default on such accounts to
any CRA and refrain from subsequently reporting any default on such accounts to
any CRA, except as relates to purchases made by the consumer on the New
Horizons credit card;


 


(vii)                                       For all Tighorn Eligible Consumers who were issued New Horizons credit
cards after September 2008, the Bank shall pursue the reversal of any known



 


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reporting of default on such accounts to any CRA
and shall refrain from subsequently reporting any default on such accounts to
any CRA, except as relates to purchases made by the consumer on the New Horizons
credit card.


 


(b)                                 Within 30 days of receipt of non-objection from the Regional Director,
the Bank shall implement the Tighorn Restitution Plan.  Any required cash restitution amount shall be
provided to each of the Tighorn Eligible Consumers in the form of a cashier’s
check as such consumers are identified. 
The cashier’s checks issued by the Bank shall not limit consumers’
rights in any way.


 


(c)                                  The Firm hired by the Bank pursuant to paragraph 2 of section II of this
Order shall review and verify that the Bank accurately identified the Tighorn
Eligible Consumers and correctly credited the accounts of, and made cash
refunds, as appropriate, to Tighorn Eligible Consumers.


 


(d)                                 The Firm shall prepare a detailed written report of the processes and
procedures by which the Bank determined the restitution amounts described in
paragraph 3(a) of section II of this Order.  The report shall also include the
following:  (i) total number of
Tighorn Eligible Consumers, (ii) total amount of restitution made under the
Tighorn Restitution Plan.


 


(e)                                  The report described in paragraph 3(d) of section II of this Order
shall be submitted to the Regional Director for his review, comment, and
non-objection within 60 days after the Bank has completed implementation of the
Tighorn Restitution Plan.


 


(f)                                    The Bank shall retain all records pertaining to the Tighorn Restitution
Plan, including but not limited to: 
documentation of the processes and procedures used to determine the
Tighorn Eligible Consumers; the names, contact, and account information of the 


 


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Tighorn Eligible Consumers; any mailing records;
and documentation that the appropriate restitution and equitable relief were
made.


 


4.                                       RESTITUTION PLAN FOR EDEBIT PAY, L.L.C. (“EDP”) DEBIT CARD PROGRAM


 


(a)                                  Within 60 days from the effective date of this Order, the Bank shall
prepare a comprehensive restitution plan (“EDP Restitution Plan”) for all
consumers who had or currently have a prepaid debit card issued by the Bank through
an agreement with EDP (“EDP Eligible Consumers”).  The EDP Restitution Plan shall require that
all EDP Eligible Consumers be reimbursed for all fees and/or charges incurred
in connection with the EDP prepaid debit card other than the initial application
and processing fees and monthly maintenance fees during the six years preceding
the effective date of this Order.  The
Bank shall submit the EDP Restitution Plan to the Regional Director for his
review, comment, and non-objection prior to implementation.


 


(b)                                 Within 30 days of receipt of non-objection from the Regional Director,
the Bank shall implement the EDP Restitution Plan.  Any required cash restitution amount shall be
provided to each of the EDP Eligible Consumers in the form of a cashier’s check
as such consumers are identified.  The
cashier’s checks issued by the Bank shall not limit consumers’ rights in any
way.


 


(c)                                  The Firm hired by the Bank pursuant to paragraph 2 of section II of this
Order shall review and verify that the Bank accurately identified the EDP
Eligible Consumers and correctly credited the accounts of, and made cash
refunds, as appropriate, to EDP Eligible Consumers.


 


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(d)                                 The Firm shall prepare a detailed written report of the processes and
procedures by which the Bank determined the restitution amounts described in
paragraph 4(a) of section II of this Order.  The report shall also include the
following:  (i) total number of EDP
Eligible Consumers, (ii) total amount of restitution made under the EDP
Restitution Plan.


 


(e)                                  The report described in paragraph 4(d) of section II of this Order
shall be submitted to the Regional Director for his review, comment, and
non-objection within 60 days after the Bank has completed implementation of the
EDP Restitution Plan.


 


(f)                                    The Bank shall retain all records pertaining to the EDP Restitution Plan,
including but not limited to: 
documentation of the processes and procedures used to determine the EDP
Eligible Consumers; the names, contact, and account information of the EDP
Eligible Consumers; any mailing records; and documentation that appropriate
restitution was made.


 


5.                                       MAILING REFUNDS


 


When the Bank makes cash
refunds to Tighorn Eligible Consumers and EDP Eligible Consumers by cashier’s check
made payable to that eligible consumer, it shall send the cashier’s check by
United States Postal Service first-class mail, address correction service
requested, to the consumer’s last address as maintained in the Bank’s
records.  The Bank shall make reasonable
attempts to obtain a current address for any eligible consumer whose
notification letter and/or restitution check is returned for any reason, using
standard address search methodologies, and shall promptly re-mail all returned
letters and/or restitution checks to current addresses, if any.  If the cashier’s check for any eligible
consumer is returned to the Bank after such second mailing by the Bank, or if a
current mailing address cannot be identified using standard address search
methodologies, the Bank shall retain the restitution amount of such eligible
consumer for a


 


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period of three-hundred
sixty (360) days from the date the restitution check was originally mailed,
during which period such amount may be claimed by such eligible consumer upon
appropriate proof of identity.  After
such time these monies will be disposed of in accordance with the Tighorn and
EDP Restitution Plans.


 


III.                                 ORDER TO PAY


 


It
is further ordered, that by reason of the alleged violations of law and/or
regulations, and after taking into account the Consent Order and Order for
Restitution, the appropriateness of the penalty with respect to the financial
resources and good faith of the Bank, the gravity of the conduct by the Bank,
the history of previous conduct by the Bank, and such other matters as justice
may require, pursuant to Section 8(i)(2) of the FDI Act, 12 U.S.C. §
1818(i)(2), a civil money penalty of $500,000 is assessed against the
Bank.  The Bank shall pay the civil money
penalty to the Treasury of the United States.


 


IV.                                NOTIFICATION AND REPORTING REQUIREMENTS


 


1.                                       SHAREHOLDER NOTIFICATION


 


Following the effective date of this Order, the
Bank shall send to its shareholder(s) or otherwise furnish a description of
this Order in conjunction with the Bank’s next shareholder communication and
also in conjunction with its notice or proxy statement preceding the Bank’s
next shareholder meeting.  The
description shall fully describe the Order in all material respects.  The description and any accompanying
communication, statement, or notice shall be sent to the FDIC, Accounting and
Securities Section, Washington, D.C. 20429, at least 15 days prior to
dissemination to shareholders.  Any
changes requested to be made by the FDIC shall be made prior to dissemination
of the description, communication, notice, or statement.


 


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2.                                       PROGRESS REPORTS


 


On or before the 30th day after the end of the first calendar
quarter following the effective date of this Order, and on or before the 30th day after the end of every
calendar quarter thereafter, the Bank shall furnish written progress reports to
the Regional Director, which detail the form and manner of any actions taken to
secure compliance with this Order and the results thereof.  The Bank may discontinue submitting such
reports when the corrections required by this Order have been accomplished and
the Regional Director has expressly released the Bank in writing from making
any further reports.


 


V.                                    SAVINGS CLAUSE AND EFFECTIVE DATE OF ORDER


 


The provisions of this Order shall not bar, estop
or otherwise prevent the FDIC or any other federal or state agency or
department from taking any action against the Bank, any of the Bank’s current
or former institution-affiliated parties, including third-parties and/or
agents, for violations of any laws, for engaging in unsafe or unsound banking
practices, for engaging in unfair or deceptive practices, or for making false
or misleading representations.


 


This Order will become effective upon its issuance by the FDIC.  The provisions of this Order shall be binding
on the Bank, its institution-affiliated parties, and their successors and
assigns. 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 modified, terminated, suspended, or set aside by the FDIC.


 


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Pursuant to delegated authority.


 


Dated at Washington, D.C., this 29th day of September, 2010.


 


 


	
   

  	
  /s/
  Sandra L. Thompson

  
	
   

  	
  Sandra
  L. Thompson

  
	
   

  	
  Director

  
	
   

  	
  Division
  of Supervision and Consumer Protection

  
	
   

  	
  Federal
  Deposit Insurance Corporation

  



 


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