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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
[X] CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED: November 1, 2000
COMMISSION FILE NUMBER 0-28292
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BANK PLUS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-4571410
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION)
4565 COLORADO BOULEVARD 90039
LOS ANGELES, CALIFORNIA (Zip Code)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (818) 549-3116
FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT: NOT APPLICABLE
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This Report is filed under Item 5 of Form 8-K to report an agreement (the
"Agreement") between registrant's principal subsidiary, Fidelity Federal Bank, a
Federal Savings Bank (the "Bank") and the Bank's principal regulator, the Office
of Thrift Supervision (the "OTS"). The Agreement, and the stipulated order
issued by the OTS pursuant to the Agreement (the "Order"), arose from the OTS's
May 1999 special limited compliance examination of the Bank's discontinued
credit card operations (the "Examination").
The Order requires the Bank to document and maintain a comprehensive compliance
and risk management program for any new lending activities. The Bank believes
that its current quality control, risk management and compliance programs for
new lending activities fulfill substantially all of the requirements of the
Order; however, compliance with the Order will require additional administration
and documentation of any new lending activity. While the Bank disagrees with the
necessity of this regulatory action, it has consented to the Order and to
certain other compliance-related corrective actions to maintain its regulatory
relationships and to avoid the expense and management distraction of opposing
the Order. The Bank does not expect that this action by the OTS will have a
material adverse effect on the operations, financial condition or results of
operations of the Bank. However, there can be no assurance given that the OTS or
other governmental agencies will not require additional actions relating to the
Examination or that this action or any future actions by the OTS or other
governmental agencies will not have a material adverse effect on the operations,
financial condition or results of operations of the Bank.
A copy of the Agreement is attached to this Report as Exhibit A. A copy of the
Order is attached to this Report as Exhibit B.
EXHIBITS
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A. Stipulation and Consent to the Issuance of an Order to Cease
and Desist and for Affirmative Relief (the "Agreement")
B. Order to Cease and Desist and for Affirmative Relief (the "Order")
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
November 3, 2000 BANK PLUS CORPORATION
By: /S/ MARK K. MASON
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Mark K. Mason
Chief Executive Offer
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EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION
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A. Stipulation and Consent to the Issuance of an Order to Cease
and Desist and for Affirmative Relief (the "Agreement")
B. Order to Cease and Desist and for Affirmative Relief (the "Order")
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EXHIBIT A
UNITED STATES OF AMERICA
Before the
OFFICE OF THRIFT SUPERVISION
--------------------------------------------)
)
In the Matter of ) Order No.: SF-00-008
) --------------
)
FIDELITY FEDERAL BANK, )
FEDERAL SAVINGS BANK, ) Date: November 1, 2000
) -------------------
Glendale, California )
)
OTS No. 05770 )
--------------------------------------------)
STIPULATION AND CONSENT TO THE ISSUANCE OF AN
---------------------------------------------
ORDER TO CEASE AND DESIST AND 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 an administrative cease and desist proceeding
against Fidelity Federal Bank, Federal Savings Bank, Glendale, California, OTS
No. 5770, (the Institution) pursuant to 12 U.S.C. ss. 1818(b),(1) and
WHEREAS, the Institution desires to cooperate with the OTS and to avoid
the time and expense of such administrative proceeding;
NOW, THEREFORE, without admitting or denying that such grounds exist or
the truth of OTS's Findings of Fact or opinions and conclusions in paragraph 2,
below, but admitting OTS has jurisdiction as set forth in paragraph 1, below,(2)
the Institution hereby Stipulates and agrees to the following:
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(1) All references to the United States Code (U.S.C.) are as amended,
unless otherwise indicated.
(2) The institution consents to the issuance of the accompanying Order
to Cease and Desist for Affirmative Relief (Order) solely for the purposes of
settlement and without adjudication of any issue of fact or law. The
Institution's consent to the Issuance of the Order does not constitute, and
shall not be deemed by the OTS to constitute, evidence of or an admission by the
Institution of liability, fault or wrongdoing. Negotiation of the terms of this
Stipulation and Order, including conduct and statements made in connection
therewith, shall not be admissible as evidence, in accordance with Rule 408 of
the Federal Rules of Evidence or similar evidence code provisions of the various
states.
Fidelity Federal Bank, F.S.B.
Stipulation and Consent to Cease and Desist
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1. JURISDICTION
(a) The Institution is a "savings association" within the meaning of 12
U.S.C.ss.1813(b), and 12 U.S.C.ss.1462(4). Accordingly, it is an "insured
depository institution" as that term is defined in 12 U.S.C.ss.1813(c).
(b) Pursuant to 12 U.S.C. ss. 1813(q), the Director of the OTS is the
"appropriate Federal Banking agency" to maintain an administrative cease and
desist proceeding against the Institution. Therefore, the Institution is subject
to the jurisdiction of the OTS to initiate and maintain a cease and desist
proceeding against it, pursuant to 12 U.S.C. ss. 1818(b). The Director of the
OTS has delegated to the regional Director of the West Region of the OTS or
his/her designee (Regional Director) the authority to issue cease and desist
orders where a savings association has consented to the issuance of the order.
2. OTS FINDINGS OF FACT. The OTS finds that the Institution initiated certain
credit card origination programs involving the marketing and other efforts of
third party companies. The Institution engaged in unsafe and unsound practices
in connection with these programs. The credit card origination programs resulted
in substantial losses to the Institution.
The OTS acknowledges that, commencing in September 1998, the
Institution took steps to terminate and wind down its credit card marketing and
origination programs and agreements with such third parties and declined to
enter into further such agreements, some of which were being negotiated at the
time, so as to reduce the risks presented by the credit card programs and
thereby to attempt to improve the financial performance of the Institution as a
whole as required by the safety and soundness provisions of federal banking law.
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Fidelity Federal Bank, F.S.B.
Stipulation and Consent to Cease and Desist
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3. CONSENT The Institution consents to the issuance by the OTS of the
accompanying Consent Order to Cease and Desist and 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 under 12 U.S.C.ss.1818(b) Upon its
issuance by the Regional Director, it shall be a final order, effective and
fully enforceable by taivershe OTS under the provisions of 12 U.S.C.ss.1818(i).
5. WAIVERS. The Institution waives the following:
(a) the right to be served with a written notice of the OTS's
charges against it as provided by 12 U.S.C.ss. 1818(b);
(b) the right to an administrative hearing of the OTS's charges
against it as provided by 12 U.S.C.ss. 1818(b);
(c) the right to seek judicial review of the Order, including,
without limitation, any such right provided by 12
U.S.C.ss.1818(h), or otherwise to challenge the validity of
the Order;
(d) any and all claims against the OTS, including its employees
and agents, and any other governmental entity for the award of
fees, costs or expenses related the Order, whether arising
under common law, the Equal Access to Justice Act, 5 U.S.C. 12
U.S.C.ss.504 or 28 U.S.C.ss.2412; and
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Fidelity Federal Bank, F.S.B.
Stipulation and Consent to Cease and Desist
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(e) the right to assert this proceeding, its consent to the
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.
6. OTHER GOVERNMENTAL ACTIONS NOT AFFECTED.
The Institution acknowledges and agrees that its consent to the
issuance of the Order does not release, discharge, compromise, settle,
dismiss, resolve, or in any way affect any action(s), charge(s), or
proceeding(s), civil or criminal, by a governmental entity other than
the OTS.
7. RESERVATION OF RIGHTS.
The Institution acknowledges that OTS reserves its right to bring such
additional action(s), charge(s), or proceeding(s) arising from or related in any
way to the Findings of Fact or any other matter, as the OTS deems appropriate,
in its sole discretion.
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) The terms and provisions of this Stipulation and the Order
shall be binding upon, and inure to the benefit of, the
parties hereto and their successors in interest. Nothing in
this Stipulation and the Order, express or implied, shall give
to any person or entity, other than the parties hereto, and
their successors in interests, any benefit or any legal or
equitable right, remedy or claim under this Stipulation and
the Order;
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Fidelity Federal Bank, F.S.B.
Stipulation and Consent to Cease and Desist
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(c) The headings in this Stipulation are for convenience only and
shall not affect the construction hereof;
(d) The terms of this Stipulation and the Order represent the
final written agreement of the parties with respect to the
subject matters hereof, and constitute the sole agreement of
the parties with respect to such subject matters; and
(e) This Stipulation shall be effective upon the execution on
behalf of the OTS and the Order shall remain in effect until
terminated, modified, or suspended in whole or in part, in
writing, by the OTS, acting through its Director, Regional
Director, or other authorized representative.
9. SIGNTAURE. The Institution represents and warrants that this
Stipulation is signed and submitted on its behalf by a duly authorized
representative of the Institution. A copy of the resolution of the Board of
Directors of the Institution authorizing execution of the Stipulation shall be
delivered to the OTS along with an executed original of this Stipulation.
WHEREFORE, the Institution, through its duly authorized representative,
executed this Stipulation and Consent to the Issuance of an Order to Cease and
Desist and For Affirmative Relief, intending to be legally bound hereby.
FIDELITY FEDERAL BANK, OFFICE OF THRIFT SUPERVISION
FEDERAL SAVINGS BANK
By: /s/ Mark K. Mason /s/ Richard A. Sanchez
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Mark K. Mason Richard A. Sanchez
Chief Executive Officer Deputy Regional Director,
acting for the Regional
Director pursuant to OTS
Order No. SF-93-044,
West Region
Date: November 1, 2000
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Fidelity Federal Bank, F.S.B.
Stipulation and Consent to Cease and Desist
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EXHIBIT B
UNITED STATES OF AMERICA
Before the
OFFICE OF THRIFT SUPERVISION
--------------------------------------------)
)
In the Matter of ) Order No.: SF-00-008
) ----------------
)
FIDELITY FEDERAL BANK, )
FEDERAL SAVINGS BANK, ) Date: November 1, 2000
) --------------------
Glendale, California )
)
OTS No. 05770 )
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ORDER TO CEASE AND DESIST AND FOR AFFIRMATIVE RELIEF
WHEREAS, Fidelity Federal Bank, FSB, Glendale, California, OTS No.
5770 (the Institution), by and through its authorized representative, has
executed a Stipulation and Consent to the Issuance of an Order to Cease and
Desist and for Affirmative Relief (Stipulation); and
WHEREAS, the Institution, in the Stipulation, has consented and
agreed to the issuance of this Order to Cease and Desist and for Affirmative
Relief (Order) pursuant to 12 U.S.C. ss. 1818(b);(1) and
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(1) All references to the United States Code (U.S.C.) are as amended, unless
otherwise indicated.
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Fidelity Federal Bank, F.S.B.
Order to Cease and Desist
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WHEREAS, the Director of the Office of Thrift Supervision (OTS) has
delegated to the Regional Directors of the OTS the authority to issue orders to
cease and desist on behalf of the OTS where the Institution has consented to the
issuance of the Order.
NOW THEREFORE, IT IS ORDERED THAT:
A. COMPLIANCE AND RISK MANAGEMENT PROGRAM
The Institution shall develop a comprehensive compliance and
risk management program (the Program) designed to confirm that, before
the Institution offers any new lending product or service that it does
not currently offer or engages in such activity with a third party
(collectively, New Activities), the Institution and any third party
involved in the New Activities shall have in place the policies,
procedures, experienced personnel, and controls necessary to comply
with all state and federal laws and regulations and other legal
requirements, including consumer compliance and fair lending
regulations, as well as to maintain the safe and sound operation of the
Institution. The Program shall:
1. Specify the responsibilities and authority of management for
compliance and provide mechanisms to ensure accountability.
2. Establish standards for implementation plans including:
a. Identification of applicable legal requirements,
b. Establishment of appropriate expertise within the
institution and confirmation that third parties have
appropriate levels of expertise,
c. Due diligence review of any third-party prior to
entering into any binding commitment with the third
party,
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Fidelity Federal Bank, F.S.B.
Order to Cease and Desist
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d. Review of agreements with third parties to ensure
proper allocation of compliance responsibilities and
mechanisms to monitor third-party performance,
e. Development or review of policies and procedures,
f. Development of compliance tools to assist staff,
g. Testing of systems, including document preparation,
boarding and servicing, and management information
systems,
h. Review of documents and disclosures,
i. Implementation of nondiscriminatory underwriting
criteria and pricing,
j. Analysis of empirical data on which risk-based
criteria are based,
k. Monitoring of the use of credit scoring systems and
collection of information for periodic validation,
l. Review of advertising and marketing strategies,
m. Staff training in compliance responsibility or, for
third parties, confirmation of the adequacy of such
training,
n. Development of effective internal controls and
meaningful reporting,
o. Periodic independent testing of internal controls and
compliance, and
p. Prompt post implementation review and testing.
3. Establish Board and management oversight mechanisms.
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Fidelity Federal Bank, F.S.B.
Order to Cease and Desist
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B. Implementation of the Program
1. Within forty-five (45) days of the Effective Date of this
Order, the Institution shall submit the Program to the OTS for
review and non-objection.
2. Within fifteen (15) days of receipt of OTS's objection to any
aspect of the Compliance Program, the Institution shall submit
a revised Program to the OTS.
3. Once the Program is submitted pursuant to this Order and all
objections from OTS, if any, have been satisfactorily
resolved, the Institution may not amend, suspend, or revoke
the Program without the prior, written non-objection from the
OTS.
4. Within ten (10) days of receiving notice of the OTS's
non-objection to the Program, the Institution shall implement
the Program and direct that all directors, officers,
employees, and agents adhere to it.
5. Following implementation, the Board shall require management
to make quarterly presentations on compliance with the
Program, and the Institution shall provide OTS with reports of
non-compliance under the Program.
C. RECORD MAINTENANCE
The Institution shall maintain records as required under 12 C.F.R. ss.
563.170(c)-(d), which, in part, requires compliance with record maintenance
provisions in other regulations and statutes applicable to the Institution, its
affiliates, and service corporations. In addition to record retention
requirements in 12 C.F.R. ss. 563.170 and other state and federal regulations
and statutes, until further notice from the OTS, the Institution shall retain
all records related to: (i) the credit card programs reviewed during the Special
Limited Examination commenced May 17, 1999, and (ii) any accounts opened
pursuant to these credit card programs, except that, in the event any of these
records must be provided to parties purchasing the accounts, the Institution
shall retain copies of these records until further notice from the OTS.
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Fidelity Federal Bank, F.S.B.
Order to Cease and Desist
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D. DIRECTOR AND OFFICER RESPONSIBILITY
1. Notwithstanding the requirements of this Order that the
Institution submit various matters to OTS for the purpose of
review, approval, or non-objection, such regulatory oversight
does not derogate or supplant each individual Board member's
continuing fiduciary duties. The Board shall have the ultimate
responsibility for overseeing the safe and sound operation of
the Institution at all times, including compliance with the
determinations of OTS as required by this Order.
2. The Board, through its oversight responsibility, and officers
of the Institution shall cause the Institution to comply with
the terms of this Order and shall take all actions necessary
or appropriate to cause the Institution to continue to carry
out the provisions of this Order.
3. Prior to the Institution's implementation of each New
Activity, the Board shall adopt a resolution (the Compliance
Resolution) formally resolving that based upon a diligent
inquiry of relevant information (including reports of
management), to the best of its knowledge and belief, the
Board believes that the Institution has complied with the
Program's requirements for such New Activity, except as
otherwise stated. The Compliance Resolution shall either
directly or through reference to a separate report: (i)
specify in reasonable detail how, if at all, full compliance
was achieved with each provision of the Program; (ii) specify
in reasonable detail how, if at all, full compliance was found
not to exist; and (iii) identify all notices of exemption or
non-objection issued by the OTS that were outstanding as of
the date of its adoption.
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Fidelity Federal Bank, F.S.B.
Order to Cease and Desist
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4. The minutes of each meeting of the Board at which a compliance
Resolution is adopted shall set forth the following
information with respect to the adoption of such Compliance
Resolution: (i) the identity of each director voting in favor
of its adoption; (ii) the identity of each director voting in
opposition to its adoption or abstaining from voting on the
compliance Resolution; and (iii) as to each director opposing
or abstaining, his or her reasons for doing so.
5. Each Board member whose abstention or opposition is not noted
in minutes pursuant to Section F.4 of this Order shall be
deemed to have certified to the accuracy of the statements set
forth in the Compliance Resolution.
6. If a Compliance Resolution indicates the Institution was not
in full compliance with this Order, no later than fifteen (15)
days after the date of the monthly Board meeting in which the
Board adopted the Compliance Resolution, the Institution shall
provide to the OTS a certified true copy of the Compliance
Resolution. The Institution shall otherwise retain copies of
all Compliance Resolutions.
7. The Board shall respond promptly to any request from the OTS
for documents that the OTS requests to demonstrate compliance
with this Order.
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Fidelity Federal Bank, F.S.B.
Order to Cease and Desist
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E. DEFINITIONS
All technical words or terms used in this Order 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, the Home Owners' Loan Act
(HOLA), the Federal Deposit Insurance Act (FDIA), or OTS Memoranda. Any
technical words or terms used in this Order and undefined in the Code
of Federal Regulations, HOLA, FDIA, or OTS Memoranda shall have
meanings that are in accordance with the best custom and usage in the
savings and loan industry.
F. SUCCESSOR STATUTES, REGULATIONS, GUIDANCE, AMENDMENTS
References in this Order to provisions of statutes, regulations, and
OTS Memoranda shall be deemed to include references to all amendments
to such provisions that have been made as of the Effective Date of this
Order and references to successor provisions as they become applicable.
G. NOTICES
Except as otherwise provided herein, any request, demand,
authorization, direction, notice, consent, waiver, or other document
provided or permitted by this Order to be made upon, given, furnished
to, delivered to, or filed with the OTS or the Institution shall be in
writing and mailed, by first class or overnight courier, or delivered
by means of electronic transmission or personal delivery, addressed as
follows:
Office of Thrift Supervision Fidelity Federal Bank, FSB
West Region Office 4565 Colorado Boulevard
1551 N. Tustin Avenue, Suite 1050 Los Angeles, CA 90039
Santa Ana, CA 92705-8635 Attn: Board of Directors
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Fidelity Federal Bank, F.S.B.
Order to Cease and Desist
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Any Notice shall be deemed duly given when received by the
addressee thereof. Any party to this Order may from time to time change
its address for receiving Notices by giving written notice thereof to
the other party in the manner set forth above.
H. DURATION, TERMINATION OF SUSPENSION OF ORDER
This Order shall become effective upon its execution by the OTS,
through its authorized representative whose signature appears below (Effective
Date), and remain in effect until terminated, modified, or suspended in writing
by the OTS, acting through its Director, the Regional Director, or authorized
designee thereof.
The Regional Director, or his or her designee, in his or her sole
discretion, may, by written notice, suspend or waive (temporarily or
permanently) any or all provisions of this Order.
I. TIME LIMITS
Time limitations for compliance with the terms of this Order run from
the Effective Date, unless otherwise noted.
J. EFFECT OF HEADINGS
The Section headings herein are for convenience only and shall not
affect the construction hereof.
K. 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 by affected or impaired thereby, unless the Regional Director in
his sole discretion determines otherwise.
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Fidelity Federal Bank, F.S.B.
Order to Cease and Desist
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L. NO VIOLATIONS OF LAW, RULE, REGULATION OR POLICY STATEMENT AUTHORIZED; OTS
NOT RESTRICTED
Nothing in the Order shall be construed as: (i) allowing or requiring
the Institution to violate any law, rule, regulation, or policy statement to
which it is subject; or (ii) restricting the OTS from taking any action(s) that
is appropriate in fulfilling the responsibilities placed upon it by law,
including, without limitation, any type of supervisory or enforcement action
that the OTS determines to be appropriate.
M. 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, other
than the parties hereto and their successors and assigns, any benefit or any
legal or equitable right, remedy, or claim under this Order.
N. INCORPORATION
The Stipulation is made a part hereof and is incorporated herein by
this reference.
OFFICE OF THRIFT SUPERVISION
By: /s/ Richard A. Sanchez
----------------------------------
Richard A. Sanchez
Deputy Regional Director,
acting for the Regional
Director pursuant to OTS
Order No. SF-93-044,
West Region
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Fidelity Federal Bank, F.S.B.
Order to Cease and Desist
