Seaway Bank & Trust, Chicagos largest African-American-owned bank, based on the South Side, has been slapped with a consent order by its regulators. The order requires it to hold elevated capital levels, strengthen management, halt dividend payments to investors and beef up controls to detect money-laundering and other criminal activity by customers. The Federal Deposit Insurance Corp. along with the Illinois Division of Banking issued the order Dec. 16, little more than a month after Seaway had declared itself a successful turnaround following restatement of six quarters worth of earnings that substantially improved the banks financial condition. The order, which the bank consented to without admitting or denying charges of unsafe or unsound banking practices, requires Seaway to boost its “Tier 1” capital to 8 percent of its assets within 60 days. Based on Sept. 30 figures, the bank would need to raise nearly $8 million to hit that benchmark. Seaway Chairman Veranda Dickens said in November that the restatements and accounting changes at the bank meant that a plan earlier in 2014 to raise money from new investors was no longer needed. An influx of new investors might have jeopardized Seaways standing as a majority black-owned bank, depending on how much the company needed to raise and whether it could get it strictly from African-American investors. In November, she characterized the remarkably positive change in fortunes as Seaway 2.0. c. 2015, The BHFG
Posted on: Sat, 24 Jan 2015 21:56:30 +0000
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