Edgewater Bank ordered to ‘cease and desist’ projectPublished 10:10pm Friday, October 23, 2009
By JESSICA SIEFF
Niles Daily Star
The Office of Thrift Supervision (OTS) issued a “cease and desist” order to Edgewater Bank of St. Joseph this week based on findings that the financial institution “engaged in unsafe or unsound banking practices.”
According to the 17-page document issued by the central regional office of the OTS, the order came after an examination of the bank’s practices back in May of this year.
That examination revealed that Edgewater had been “operating with an excessive level of classified assets and inadequate level of capital protection for the volume, type and quality of assets” held by the bank.
The OTS said they do not comment on the orders issued to financial institutions.
Attorney Mike Bell, of the firm Kotz Sangster Wysocki & Berg in Buchanan who is not involved nor aware of specifics in the situation with Edgewater but has represented financial institutions, said the that such situations have happened before – and are often seen as a means of protecting funds as well as identifying areas of improvement in bank practice and not necessarily a declaration of extreme wrong doing.
“An order to cease and desist is one tool that is used in the regulation of financial institutions,” Bell said. “The issuance of such an order certainly does not mean that the particular institution will fail or be closed. There are plenty financial institutions in this State that at one time were subject to such an order.”
Edgewater Bank holds full service branches in Bridgman, Buchanan, Coloma, Decatur, Royalton and St. Joseph.
“I am aware of a couple financial institutions operating today that have been operating under such an order since 2008,” Bell said. “Typically the general public should not notice any changes in the operation of an institution operating under such an order.”
A phone call was made to Edgewater Bank president Rick Dyer, but he was unavailable for comment.