Federal action against Coast National Bank

April 29, 2010

By KAREN VELIE

The Federal Reserve Bank on Thursday announced a regulatory action taken against Coast Bancorp, in a move to maintain financial soundness at the bank, according to the federal order issued in San Francisco.

Under a written agreement, the parent company of San Luis Obispo-based Coast National Bank cannot declare or pay any dividends without prior approval from the Federal Reserve Bank of San Francisco and cannot directly or indirectly take dividends or any other form of payment that would represent a reduction in capital from its bank.

As part of the agreement signed between Coast National’s parent company and the reserve on April 22, federal regulators have ordered Coast Bancorp to submit a written report within 60 days explaining how it plans to maintain sufficient capital at the bank.

In a 2008 letter to customers and shareholders, bank chairman and CEO Jack Wauchope placed blame for the company’s financial woes on the “national fallout from the sub-prime mortgage debacle.”

However, the bank did not participate in the sub-prime mortgage industry, though the institution did provide loans to developers with ties to local hard-money lenders being investigated for alleged fraudulent activities.

Started in 1998, Coast National operates five branches in San Luis Obispo County.


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6 Comments

  1. The Gimlet Eye says:

    How does it plan to maintain sufficient capital at the bank??? How does the FED plan to maintain sufficient capital in ITS bank??? It must be nice to be a banking cartel where you can print money out of thin air!

    The destruction of the entire world’s financial system is being caused by the dirty rotten scoundrels in the FED!

    Audit the FED!

    End the FED!

    http://endthefedusa.ning.com/

    (1) 5 Total Votes - 3 up - 2 down
    • mkaney says:

      Absolutely absolutely absolutely. No matter what your view on central banking and fiat money, the creation of the Fed constituted the transfer of an enormous amount of power to a group that is not accountable to voters. As far as I’m concered, the creation of the fed marks the point at which republicanism/democracy was replaced by oligarchy. The other branches of the government were retained for administrative purposes and left to their own devices, except in cases where they conflict with specific policy goals of the oligarchy.

      Everything the fed claims to do are lies and/or unsustainable goals. All other conspiracy theories be damned, this is the largest and most pervasive conspiracy (not conspiracy “theory”) in existence. The average person does not really understand the basic fact that all U.S. currency is actually a certificate of debt.

      (-1) 3 Total Votes - 1 up - 2 down
  2. Anon E. Muss says:

    Does this have anything to do with Patrick Aurignac? In the story in the Trib where he was suing San Luis Trust, at the end of it he said Coast was “being creative.” I’m sure the regulators loved reading that.

    (11) 13 Total Votes - 12 up - 1 down
  3. Spectator says:

    Now it is just a question of time!

    (6) 16 Total Votes - 11 up - 5 down
    • mkaney says:

      Hardly.. The bank is well capitalized, the Feds just want to control everything now. And there may be the occasional gray-area regulatory violation, but Coast National is on the up and up and you will not find any of the games played there that were played in many other local banks. These are good people having a tough couple years, nothing insurmountable.

      (0) 20 Total Votes - 10 up - 10 down
      • Cindy says:

        Well for those of you who are wondering which local banks might be great to do business with. I moved over to Union Bank of California. They are very strong and were never caught up in any of these money lending schemes. They provide great service, respect their patrons and don’t necessarily charge fees and they pay upwards of 2.25% interest on CD’s. It’s also worth looking into including them in your investment portfolio’s.

        (-6) 14 Total Votes - 4 up - 10 down

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