And pay restitution.
The Federal Deposit Insurance Corporation announced on December 3rd, a list of enforcement actions going back some months. On June 10th they ordered First Bank of Delaware to Cease and Desist from certain deceptive marketing practices and to pay restitution. The Order they made available lays out all the detail.
Copies of the orders referred to above can be obtained from or inspected at the FDIC’s Public Information Center, 3501 Fairfax Drive, Room E-1002, Arlington, VA (telephone 703-562-2200 or 1-877-275-3342). To view all orders online, visit the FDIC’s Web page at http://www.fdic.gov/bank/individual/enforcement/index.html.
In essence they operated their National Consumer Products division without adequate supervision. One of the companies they worked with appears to have been offering credit products in a way that was deemed deceptive by the government. This is one of the most highly regulated industries in the nation and all aspects fall under State and or Federal government review. They were ordered to terminate the relationships the bank had with these specific subprime lenders.
Within sixty (60) days of the effective date of this ORDER, the Bank shall develop and submit to the Regional Director of the FDICís New York Regional Office (Regional Director), for her non-objection in accordance with paragraph XIII.A of this ORDER, a comprehensive plan, with timelines, for the termination of all relationships with third-party providers and the termination of all third-party lending programs or any agreements or arrangements with third-party providers that exhibit the characteristics of a ďRent-a-BINĒ or ďRent-a-ICAĒ arrangement, as referred to in the FDICís Credit Card Activities Manual, except for those third-party lending programs and third-party providers specifically identified in Exhibit ďBĒ of the Consent Agreement.
The FDIC action report makes it sound like the bank was quite sloppy in overseeing this unit.
And finally, they must set aside $700,000 to backstop CompuCredit Corporation, Atlanta, Georgia (CompuCredit) in case they cannot pay all their ordered restitutions.
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