EXHIBIT 10.1 - Order to Cease and Desist
UNITED STATES OF AMERICA
Before The
OFFICE OF THRIFT SUPERVISION
--------------------------------------------------
In the Matter of:
ALGIERS HOMESTEAD ASSOCIATION
New Orleans, Louisiana
--------------------------------------------------
ORDER TO CEASE AND DESIST
FOR AFFIRMATIVE RELIEF
Whereas, Algiers Homestead Association, New Orleans, Louisiana
(Algiers or Association), OTS Docket No. 03667, by and through its Board of
Directors (Board), has executed a Stipulation and Consent to the Issuance of an
Order to Cease and Desist for Affirmative Relief (Stipulation); and
WHEREAS, Algiers, in the Stipulation, has consented and agreed to the
issuance of this Order to Cease and Desist for Affirmative Relief (Order),
pursuant to 12 U.S.C. Section 1818(b)'; and
WHEREAS, the Deputy Director of the Office of Thrift Supervision
(OTS), pursuant to delegated authority, has delegated to the Regional Directors
of OTS the authority to issue Orders to Cease and Desist for Affirmative Relief
on behalf of OTS where the Association that is the subject of the Orders has
consented to the issuance of the Orders.
NOW THEREFORE, IT IS ORDERED THAT, Algiers and its directors,
officers, employees, and agents shall cease and desist from any action (alone or
with another or others) for or toward causing, bringing about, participating in,
counseling, or aiding and abetting any unsafe or unsound practice or any
violation of:
(a) 12 U.S.C. Sections 1951-1959; Treasury Department's implementing
regulations, 31 C.F.R. Part 103; and OTS's implementing regulation,
12 C.F.R. Section 563.177;
(b) 12 U.S.C. Sections 1601-1693r and implementing regulations,
12 C.F.R. Part 226;
(c) 42 U.S.C. Sections 4001-4128, and OTS's implementing regulations,
12 C.F.R. Part 572;
(d) 12 C.F.R. Sections 560.35 and 560. 120;
(e) 12 C.F.R. Part 535; and
(f) 12 U.S.C. Sections 280 1-2810, and OTS's implementing regulations,
12 C.F.R. Part 203
All references to the United States Code (U.S.C.) are as amended.
1
<PAGE>
IT IS FURTHER ORDERED THAT:
CORRECTIVE PROVISIONS
1. Appointment of Management.
Within 90 days of the Effective Date of this Order, the Board of
Directors of Algiers (Board) shall appoint a qualified, permanent
compliance officer to administer and oversee the implementation of consumer
compliance policies and procedures at the Association.
2. Policies and Procedures.
Within 120 days of the Effective Date of this Order, the Board shall
develop and approve written compliance policies and procedures. These
policies and procedures shall address all consumer compliance laws and
regulations. The Board shall amend the Association's policies and
procedures as directed by the Regional Director of the Midwest Region of
OTS or his or her designee (Regional Director).
3. Training of Lending Personnel.
Within 60 days of the Effective Date of this Order, the Board shall
develop and implement a plan (a) to provide to all lending personnel the
appropriate training in all consumer compliance laws and regulations
applicable to the Association's lending function; and (b) to train all
lending personnel in the compliance policies and procedures implemented
pursuant to Paragraph 2 of this Order.
4. Reports to OTS.
By the 15th day of the end of each quarter, the Association's
management shall submit to OTS monthly reports on the progress made by the
Association in correcting violations noted in the OTS Compliance Report of
Examination dated April. 10, 2000 (ROE), and in developing and
implementing, written compliance policies and procedures.
5. Compliance Management Plan.
Within 90 days of the Effective Date of this Order, the Board shall
establish a plan for internal controls and procedures to ensure conformance
with compliance regulations as detailed in the ROE. Such plan shall provide
an ongoing monitoring program to assess the effectiveness of compliance
controls and an assessment of actions taken to correct previously noted
compliance deficiencies. The plan shall also provide for an independent
review of the Association's compliance program in accordance with a
schedule approved by the Board. The Board shall amend this plan as directed
by the Regional Director.
6. EEO Training.
Within 120 days of the Effective Date of this Order, the Association
shall provide training regarding Equal Employment Opportunity requirements
and OTS Regulation, 12 C.F.R. Section 528.7, to its directors and senior
management.
7. Truth in Lending -Regulation Z.
All references to the United States Code (U.S.C.) are as amended.
2
<PAGE>
(a) The Association shall comply with all requirements of the Truth in
Lending Act, 15 U.S.C. Sections 1601-1693r (TILA), and of 12 C.F.R.
Part 226.
(b) Within 60 days of the Effective Date of this Order, the Association
shall review all outstanding loans made since the last OTS
compliance examination, dated June 23, 1997, to determine whether
the loans complied with TILA, Regulation Z, and other applicable
requirements. Within 90 days of the Effective Date of this Order,
the Association shall seek advice of counsel, who has significant
experience in consumer lending issues and who has not performed any
prior legal work for the Association or its holding company,
regarding the appropriate actions to take to correct any deficiency
or violation resulting from those loans reviewed pursuant to this
paragraph, including, but not limited to, restitution. Within 120
days of the Effective Date of this Order, the Association shall
submit a copy of this review to OTS, including a summary of actions
taken or to be taken.
(c) Within 60 days of the Effective Date of this Order, the Association
shall pay a total restitution of $2,751 to borrowers for TILA
violations noted in the ROE.
8. Bank Secrecy Act.
The Association shall file all Currency Transaction Report forms in
compliance with the Bank Secrecy Act, 12 U.S.C. Sections 1951-1959, and in
compliance with 12 C.F.R. Section 103.27.
9. Flood Disaster Protection Act.
(a) The Association shall comply with all requirements of the Flood
Disaster Protection Act, 42 U.S.C. Sections 4001-4128, and with 12
C.F.R. Part 572.
(b) Within 90 days of the Effective Date of this Order, the Association
shall review all outstanding loans made since the last OTS
compliance examination, dated June 23, 1997, to determine whether
flood determinations were made and, if not, shall make them.
10. OTS Mortgage Regulations.
(a) The Association shall comply with all requirements of 12 C.F.R.
Sections 560.35(a) and 560.2 10.
(b) Within 60 days of the Effective Date of this Order, the Association
shall review all outstanding loans made since the last OTS
compliance examination, dated June 23, 1997, (i) to determine
whether adjustable rate mortgages caps were included in the
borrowers' contracts; and (ii) to determine whether the appropriate
rate adjustments were done. Within 90 days of the Effective Date of
this Order, the Association shall seek advice of counsel, who has
significant experience in consumer lending issues and who has not
performed any prior legal work for the Association or its holding
company, about the appropriate actions to take to correct any
violations of 12 C.F.R. Sections 560.35(a) and 560.210 or any
deficiencies in the borrowers' contracts. Within 120 days of the
Effective Date of this Order, the Association shall submit a copy of
this review to OTS, including a summary of actions taken or to be
taken.
II. OTS Consumer Credit Practices Regulations.
The Association shall comply with 12 C.F.R. Section 535.3(b).
All references to the United States Code (U.S.C.) are as amended.
3
<PAGE>
12. Home Mortgage Disclosure Act.
The Association shall collect and record loan data in compliance with
the Home Mortgage Disclosure Act, 12 U.S.C. Sections 2801-2810 (H~ADA), and
12 C.F.R. Section 203.4
13. Supervisory Agreement To Remain in Effect.
The Supervisory Agreement entered into by the Association and OTS,
effective May 18, 2000, remains in full force and effect and is not in any
way superseded or modified by the terms of this Order.
14. Director Responsibility.
Notwithstanding the requirements of this Order that the Board submit
various matters to the Regional Director for the purpose of receiving his
approval, non-objection, or notice of acceptability, such regulatory
oversight does not derogate or supplant each individual director's
continuing fiduciary duty. The Board shall have the ultimate responsibility
for overseeing the safe and sound operation of the Association at all
times, including compliance with the determinations of the Regional
Director as required by this Order.
15. Compliance with Order.
(a) The Board and officers of the Association shall take immediate
action to cause the Association to comply with the terms of this
Order and shall take all actions necessary or appropriate thereafter
to cause the Association to continue to carry out the provisions of
this Order.
(b) The Board, on a monthly basis, shall adopt a Board resolution (the
Compliance Resolution) formally resolving that, following a diligent
inquiry of relevant information (including reports of management),
to the best of its knowledge and belief, during the immediately
preceding calendar month the Association has complied with each
provision of this Order currently in effect, except as otherwise
stated. The Compliance Resolution shall: (i) specify in detail how,
if at all, full compliance was found not to exist; and (ii) identify
all notices of exemption issued by the Regional Director that were
outstanding as of the date of its adoption.
(c) The minutes of the meeting of the Board shall set forth the
following information with respect to the adoption of each
Compliance Resolution: (i) the identity of each director voting in
favor of its adoption; and (ii) the identity of each director voting
in opposition to its adoption or abstaining from voting thereon,
setting forth each Director's reasoning for opposing or abstaining.
(d) No later than the 25th Calendar Day of the month following the end
of a calendar quarter, beginning with the end of the first
calendar quarter following the effective Date of this Order, the
Association shall provide to the Regional Director a certified true
copy of the Compliance Resolutions adopted at the Board meeting of
each month in such calendar quarter. The Board, by virtue of the
Association's submission of a certified true copy of each such
Compliance Resolution to the Regional Director, shall be deemed to
have certified to the accuracy of the statements set forth in each
Compliance Resolution, except as provided below. In the event that
one or more Directors do not agree with the representations set
forth in a Compliance Resolution, such disagreement shall be noted
in the minutes of the Association.
(e) The Board shall promptly respond to any request from OTS for
documents that OTS reasonably requests to demonstrate compliance
with this Order.
All references to the United States Code (U.S.C.) are as amended.
4
<PAGE>
MISCELLANEOUS PROVISIONS
16. Definitions.
(a) All technical words or terms used in this Order and the Stipulation
for which meanings are not specified or otherwise provided by the
provisions of this Order shall, insofar as applicable, have meanings
as defined in Chapter V of Title 12 of the Code of Federal
Regulations Home Owners' Loan Act (HOLA), FDJA or OTS Publications.
Any such technical words or terms used in this Order and the
Stipulation and undefined in said Code of Federal Regulations. HOLA,
FDIA, or OTS Publications shall have meanings that are in accordance
with the best custom and usage in the savings and loan industry.
(b) For purposes of this Order, the phrase "Effective Date" shall mean
the date upon which OTS, acting through its authorized
representative, signs this Order as noted in the caption above.
17. Successor Statutes, Regulations, Guidance, and Amendments.
Reference in this Order and the Stipulation to provisions of statutes,
regulations, and OTS Publications shall be deemed to include references to
all amendments to such provisions as have been made as of the Effective
Date of this Order, and references to successor provisions as they become
applicable.
18. Notices.
(a) Except as otherwise provided herein, any request, demand,
authorization, direction, notice, consent, waiver, or other document
provided or permitted by the Order to be made upon, given or
furnished to, delivered to, or filed with:
(i) OTS, by the Association, shall be sufficient for every
purpose hereunder if in writing and mailed, first class,
postage prepaid or sent via overnight delivery service
or physically delivered, in each case addressed to the
Regional Director, Office of Thrift Supervision,
Department of the Treasury, 122 West Carpenter Freeway,
Suite 600, Irving, Texas 75039 or telecopied to
972-281-2001 and confirmed by first class mail, postage
prepaid, overnight delivery service or physically
delivered, in each case to the above address.
(ii) The Association by OTS, shall be sufficient for every
purpose hereunder if in writing and mailed, first class,
postage prepaid, or sent via overnight delivery service
or physically delivered, in each case addressed to the
Association at One Westbank Expressway, New Orleans,
Louisiana 70174-6308 or telecopied to 504-367-8223 and
confirmed by first class mail, postage prepaid,
overnight delivery service or physically delivered, in
each case to the above address.
All references to the United States Code (U.S.C.) are as amended.
5
<PAGE>
(b) Notices hereunder shall be effective upon receipt, if by mail,
overnight delivery service, or telecopy, and upon delivery, if by
physical delivery. If there is a dispute about the date on which a
written notice has been received by a party to this Order, then, in
the event such notice was sent by the United States mail, there
shall be a presumption that the notice was received two Business
Days after the date of the postmark on the envelope in which the
notice was enclosed.
19. Duration, Termination or Suspension of Order.
This Order shall remain in effect until terminated, modified, or
suspended in writing by OTS, acting through its Director, its Deputy
Director, or the Regional Director (including any authorized designee or
successor thereof). The Regional Director, in his or her sole discretion,
may, by written notice, suspend, modify, or terminate any or all provisions
of this Order.
20. Time Limits.
Time limitations for compliance with the terms of this Order run from
the Effective Date, unless otherwise noted.
21. Separability Clause.
In case any provision in this Order is ruled to be invalid, illegal,
or unenforceable by the decision of any Court of competent jurisdiction,
the validity, legality, and enforceability of the remaining provisions
hereof shall not in any way be affected or impaired thereby, unless the
Regional Director in his or her sole discretion determines otherwise.
22. Incorporation.
The Stipulation is made a part hereof and is incorporated herein by
reference.
23. No Violations of Law, Rule, Regulation or Policy Statement Authorized; OTS
Not Restricted; Relation To State Law.
(a) Nothing in this Order shall be construed as: (i) allowing the
Association to violate any law, rule, regulation, or policy
statement to which it is subject; or (ii) restricting or estopping
OTS from taking any action(s) that it believes are appropriate in
fulfilling the responsibilities placed upon it by law.
(b) As an association chartered under state law and subject to
regulation and supervision by a state regulatory authority, the
Association may be subject to various restrictions imposed by the
appropriate state regulatory authority. The Association must
continue to comply with any such restrictions, notwithstanding the
receipt by the Association of authorizations or notices of
non-objection of the Regional Director, except to the extent that
such restrictions have been deemed to be preempted by federal law or
regulation.
24. Successors in Interest/Benefit.
The terms and provisions of this Order shall be binding upon, and
inure to the benefit of, the parties hereto and their successors in
interest. Nothing in this Order, express or implied, shall give to any
person or entity,
All references to the United States Code (U.S.C.) are as amended.
6
<PAGE>
other than the parties hereto and the Federal Deposit Insurance Corporation
(FDIC) and their successors hereunder, any benefit or any legal or
equitable right, remedy or claim under this Order. For purposes of this
Order, the FDIC will be the successor in interest to OTS for purposes of
monitoring compliance with, and enforcing the provisions of, this Order, in
the event that Algiers is no longer subject to OTS jurisdiction.
THE OFFICE OF THRIFT SUPERVISION
By: /S/ SIGNED
---------------------------
Frederick R. Casteel
Regional Director
Midwest Region
<PAGE>
UNITED STATES OF AMERICA
Before The
OFFICE OF THRIFT SUPERVISION
------------------------------------------------
In the Matter of:
ALGIERS HOMESTEAD ASSOCIATION,
New Orleans, Louisiana
-------------------------------------------------
STIPULATION AND CONSENT TO THE ISSUANCE OF
AN ORDER TO CEASE AND DESIST FOR AFFIRMATIVE RELIEF
WHEREAS, the Office of Thrift Supervision (OTS), based upon
information derived from the exercise of its regulatory responsibilities, is of
the opinion that grounds exist to initiate administrative cease and desist
proceedings against Algiers Homestead Association, New Orleans, Louisiana,
(Algiers or Association) (OTS Docket No. 3667), pursuant to 12 U.S.C. Section
1818(b).'
WHEREAS, Algiers desires to cooperate with OTS and to avoid the time
and expense of such administrative enforcement proceedings. Without any
adjudication on the merits, Algiers neither admits nor denies that grounds exist
for an administrative enforcement proceeding and neither admits nor denies the
Findings of Fact or opinions and conclusions of OTS, as set forth in Paragraph
2, below. Algiers admits the jurisdiction of OTS as set forth in Paragraph 1,
below. Algiers hereby stipulates and agrees to the following:
1. Jurisdiction.
(a) Algiers is a "savings association" within the meaning of 12 U.S.C.
Section 1813(b) and 12 U.S.C. Section 1462(4). Accordingly, it is an
"insured depository institution" as that term is defined in 12
U.S.C. Section 18 13(c).
(b) Pursuant to 12 U.S.C. Section 1813(q), the Director of OTS is the
"appropriate Federal banking agency" to maintain administrative
enforcement proceedings against such a savings association.
Therefore, Algiers is subject to the jurisdiction of OTS to initiate
and maintain administrative enforcement proceedings against it
pursuant to 12 U.S.C. Section 1818(b). The Deputy Director of OTS,
pursuant to delegated authority, has delegated to the Regional
Director of the Midwest Region of OTS (Regional Director) the
authority to issue orders where the association subject to the order
has consented to its issuance.
2. OTS Findings of Fact.
OTS finds that, as further discussed in the Report of Examination for
the examination of Algiers commenced on April 10, 2000, Algiers has failed
to comply with:
(a) 12 U.S.C. Sections 1951-1959, Treasury Department's implementing
regulations, 31 C.F.R. Part 103, and OTS's implementing regulation
12 C.F.R. Section 563.177;
All references to the United States Code (U.S.C.) are as amended.
7
<PAGE>
(b) 15 U.S.C. Sections 160 1-1693r and implementing regulations,
12 C.F.R. Part 226;
(c) 42 U.S.C. Sections 4001-4128 and implementing regulations,
12 C.F.R. Part 572;
(d) 12 C.F.R. Sections 560.35 and 560.2 10;
(e) 12 C.F.R. Part 535; and
(f) 12 U.S.C. Sections 2801-2810 and implementing regulations,
12 C.F.R. Part 203.14
3. Consent.
The Association consents to the issuance by OTS of the accompanying
Consent Order to Cease and Desist for Affirmative Relief (Order). It
further agrees to comply with the terms of the Order upon issuance, and
stipulates that the Order complies with all requirements of law.
4. Finality.
The Order is issued pursuant to 12 U.S.C. Section 18 18(b). Upon its
issuance by OTS, it shall be a final order, effective and fully enforceable
by OTS or another appropriate federal banking agency under the provisions
of 12 U.S.C. Section 18 18(i).
5. Waivers. The Association waives the following:
(a) the right to be served with a written notice of charges of OTS's
charges against it as provided by 12 U.S.C. Section 1818(b);
(b) the right to an administrative hearing of OTS's charges against it
as provided by 12 U. S.C. Section 1818(b);
(c) the right to seek judicial review of the Order, including, without
limitation, any such right provided by 12 U.S.C. Section 1818(h), or
otherwise to challenge the validity of the Order;
(d) the right to assert this proceeding, this consent to issuance of the
Order, the issuance of the Order, the payment of any monies, or the
provision of any other financial relief as contemplated by the
Order, as the basis for a claim of double jeopardy in any pending or
future proceeding brought by the United States Department of Justice
or any other governmental entity; and
(e) any and all claims against OTS, including its employees and agents,
and any other governmental entity for the award of fees, costs, or
expenses related to this OTS administrative enforcement matter
and/or the Order, whether arising under common law, the Equal Access
to Justice Act, 5 U.S.C. Section 504, or 28 U.S.C. Section 2412.
6. Other Governmental Actions Not Affected.
Algiers acknowledges and agrees that its consent to the issuance of
All references to the United States Code (U.S.C.) are as amended.
8
<PAGE>
the Order is solely for the purpose of resolving this OTS enforcement
matter with regard to the violations set forth in Paragraph 2 hereof to the
extent known by the OTS at the time the Order is issued, with the exception
of civil money penalty assessments brought under the Flood Disaster
Protection Act, 42 U.S.C. Sections 4001-3128. Algiers acknowledges and
agrees that its consent to the issuance of the Order (a) does not otherwise
release, discharge, compromise, settle, dismiss, resolve, preclude, or in
any way affect any actions, charges against, or liability of Algiers that
arise pursuant to this action or otherwise, and that may be or have been
brought by OTS or another governmental entity, including, but not limited
to, actions that may be taken by OTS or any other government entity against
institution-affiliated parties with regard to the same or different subject
matters; and (b) does not release, discharge, compromise, settle, dismiss,
resolve, preclude, or in any way affect any actions, charges against, or
other administrative, civil, or criminal proceeding, that may be or has
been brought by OTS or another governmental entity against Algiers.
7. Agreement for Continuing Cooperation.
Algiers agrees that, on reasonable notice and without service of a
subpoena, it will promptly respond to any written request from OTS for
documents that OTS reasonably requests to demonstrate compliance with the
Order.
8. Miscellaneous.
-------------
(a) The construction and validity of this Stipulation and the Order
shall be governed by the laws of the United States of America;
(b) All references to OTS in this Stipulation and the Order shall also
mean any of OTS's predecessors, successors, and assigns;
(c) The section and paragraph headings in this Stipulation and the Order
are for convenience only, and such headings shall not affect the
interpretation of this Stipulation or the Order;
(d) The terms of this Stipulation and the Order represent the final
agreement of the parties with respect to the subject matters hereof,
with the exception of civil money penalty assessments brought under
the Flood Disaster Protection Act, 4Z U.S.C. Sections 4001-4128, and
constitute the sole agreement of the parties with respect to such
subject matters; and
(e) This Stipulation and the Order shall remain in effect until
terminated, modified, or suspended in writing by OTS, acting through
its Director, Deputy Director, Regional Director, or other
authorized representative.
9. Signature of Directors.
Each Director signing this Stipulation attests that s/he voted in
favor of a Board resolution authorizing execution of the Stipulation.
WHEREFORE, on this fourth day of October, 2000, Algiers, by a majority of
its directors, executes this Stipulation and Consent to the Issuance of an Order
to Cease and Desist, intending to be legally bound hereby.
ALGIERS HOMESTEAD ASSOCIATION
by a majority of its directors
All references to the United States Code (U.S.C.) are as amended.
9
<PAGE>
By: /S/ SIGNED /S/ SIGNED
------------------------------------------------------------------------------
Thomas L. Arnold, Director Janice Humphrey Ray, Director
/S/ SIGNED /S/ SIGNED
--------------------------------------------------------------------------------
Thu Dang, Director Hugh E. Humphrey, III, Director
/S/ SIGNED /S/ SIGNED
--------------------------------------------------------------------------------
John Gary, Director Frank Minor, Director
ACCEPTED on the date of the Order by:
OFFICE OF THRIFT SUPERVISION
By: /S/ SIGNED
------------------------
Frederick R. Casteel
Regional Director
Midwest Region
All references to the United States Code (U.S.C.) are as amended.
10
