FDIC, State Target Boston Online Bank
The Federal Deposit Insurance Corp. and the state Division of Banks have ordered Boston-based OneUnited Bank to cease and desist "unsafe and unsound banking practices and violations of law."
According to the order, OneUnited, an online bank that markets itself to African Americans, waived its right to a hearing regarding its alleged malfeasance and must now comply with a laundry list of orders and oversight initiated by the FDIC and the Division of Banks.
OneUnited operated with insufficient capital, failed to provide adequate supervision of officers, paid its executives "excessive" salaries, fees and benefits, operated "without effective underwriting standards," had no loan documentation program, made speculative investments, failed to monitor its earnings and operated with deficient earnings and insufficient liquidity, the October order says.
The order sets out strict financial, underwriting and monitoring requirements for the bank. It also allows the FDIC and the Division of Banks to analyze and assess the bank's management and staff performance and requires the bank to write a new management plan in response to all the recommendations.
OneUnited executives could not be reached for comment this morning.
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