Two North Georgia banks that operate divisions in Jackson and Barrow counties are reportedly under “cease and desist orders” from banking regulators.
The FDIC released a 29-page “cease and desist” order last Friday against Community Bank and Trust that was dated May 11. CB&T is headquartered in Cornelia and operates multiple divisions in Northeast Georgia, including Barrow and Jackson counties.
On Monday, Habersham Bancorp, based in Clarkesville, announced it had signed a less severe “cease and desist” order with the Georgia Department of Banking, according to Reuters. Habersham Bank operates a branch in Braselton, among other North Georgia locations. (Earlier reports misidentified the Habersham order as being with the FDIC rather than the state.) Habersham Bancorp president David Stovall said the bank is healthy and well-capitalized.
The CB&T order released last week slammed the bank’s board of directors and management, saying “the Bank had engaged in unsafe or unsound banking practices and had committed violations of law and/or regulations.”
Some sources from CB&T said that the problems are a result of lax loan practices primarily in Barrow County where the bank has offices in Winder, Bethlehem and Auburn.
But Barrow division president Randy Sims said the issues the bank faces are larger than just Barrow County.
“We’ve addressed all the issues here and company wide and feel good about where we’re headed,” he said. “We’re moving in the right direction.”
For the full story, see the July 1 issue of the Barrow Journal.
Robin, what about this is greed? Unfortunately, this poor economy effects businesses just like it effects individuals. And when people can't make car payments, or mortgage payments they have through their bank, the institution suffers.
The greed came in with Banks practicing unsafe lending practices -- You know those 100%+ loans -- yea we know the house is REALLY worth $150,000 but the loan officer said to appraise it @$175,000 and we'll lend $190,000 or those interest only loans.
Hence the statement "the Bank had engaged in unsafe or unsound banking practices ..."
Speculation on the part of the lender and the buyer. They got burned -- life s**** the greedy!
The one's I feel for are the people who lost their jobs and through no fault of their own have lost their homes -- the one's who brought more than they could afford or brought into the 100+ or interest only - don't feel for them at all!
Sorry to hear about the news for the entire bank and banking industry. I appreciate our President clarifying it wasn't just the Winder Division, but rather widespread through the institution. The sister division in Jackson County should be more united with the rest of the organization, rather than accusatory. Hang in there Randy.