The Order in that respect seems an extraordinary document. The order provides certain performance yardsticks that must be met, but makes certain that the directors and officers of US Century are not going to be doing the measuring themselves, waiting for example for the return of a housing boom to refloat a portfolio loaded down with underwater loans. The regulators demand honest accounting: "the bank shall eliminate from its books, by charge-off or collection, all assets or portions of assets classified as "Loss" ... that have not previously collected or charged-off." There is even more. The regulators anticipate that there are even more rotten loans buried in the US Century books and will require that if there is a subsequent audit, that within 30 days the bank will have to shed off 50 percent of detritus classified as "doubtful". And then it goes on to further say, you can't bait and switch: "Elimination of any of these assets through proceeds of other loans made by the bank is not considered collection for the purposes of this paragraph." For loans over $1 million, within 60 days, US Century must show regulators "the financial position of each such borrower, including the source of repayment, repayment ability, and alternate repayment sources; and an evaluation of the available collateral for each such credit, including possible actions to improve the bank's collateral positions." Wow. Double wow.
The Consent Order requires a management plan and evaluation of existing US Century management. Any new or replacement personnel must have "requisite ability". Within 30 days, the bank is required to hire an independent consultant to analyze what is happening at the bank "for the purpose of providing qualified management". The Order reaches a step further, that the bank will "certify" that "neither the firm, nor any individual involved in the work to be performed, is affiliated in any manner with the Bank."
The regulators outline a capital plan but also impose a written contingency in the event that the bank fails to meet certified objectives. "The contingency plan shall include a plan to merge the bank. The bank shall implement the contingency plan upon written notice from the Supervisory Authorities."
The bottom line: US Century has agreed to show regulators everything, including the financial condition of insiders whose loans distinguish the bank from its peers: (Bauer Financial, reporting on March 31, 2011 bank results)
4 comments:
The FDIC should also examine loans by US Century over $1MM that were "sold" or "transferred" over the past year by private individuals deemed to be "insiders" or friends of the bank, to see who is trying to duck from sight. And any loans to elected officials.
Insider documentation is all recorded on the M-D Clerk of Courts web site. From the bank’s first mortgage executed on Jan 3, 2003 to Armando Guerra on his Journey’s End home to the latest collateral assignment recorded on July, 26, 2011. It’s all here, familiar names like Guerra, Herran, Pino, Barreto, Cancela, a Who’s Who List of insiders – all 215 pages, from the Bank’s inception to the aftermath of the real estate collapse. The only thing missing is how many of these transactions are now worthless; punch “US Century” into the “Party Name” field. http://www2.miami-dadeclerk.com/public-records/Search.aspx
This is not financial institution that serves the community of Miami.
The corrupt Century Plumbing become Century Builders become Century Bank was founded on a false premise.
Bank examiners could easily close this operation and should.
Was Uncle Tom's Cabin only a book? Small beginning can lead to big changes.
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