CORRECT:=Fed Issues Enforcement Actions Against Two Bank-Holding Cos
November 03 2009 - 1:00PM
Dow Jones News
The U.S. Federal Reserve announced enforcement actions Tuesday
against Commerce Bancshares, Inc. and Merchants Bancorp (MBNC),
moves taken to help maintain financial soundness at the companies,
according to the Fed orders.
Under a written agreement, Oklahoma-based Commerce Bancshares
cannot declare or pay any dividends without prior approval from the
Fed.
The bank-holding company also cannot directly or indirectly take
dividends or any other form of payment representing a reduction in
capital from its state-chartered Bank of Commerce.
Similarly, California-based Merchants Bancorp cannot declare or
pay any dividends without prior approval from the Fed, according to
its agreement. Merchants Bancorp is also restricted from directly
or indirectly taking dividends or any other form of payment
representing a reduction in capital from any of its
subsidiaries.
Both bank holding companies, Commerce Bancshares and Merchants
Bancorp, also cannot incur or increase or guarantee any debt
without prior written approval from the Fed.
Among other things, Commerce Bancshares must submit to Fed
officials a written plan to maintain sufficient capital. Merchants
Bancorp must submit a written cash flow projection for 2010 and
written progress reports regarding their agreement with Fed
officials.
-By Darrell A. Hughes, Dow Jones Newswires; 202-862-9255;
darrell.hughes@dowjones.com
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