In an April 2009 Bank Notes article, we noted the sudden increase in regulatory enforcement actions and associated civil money penalties against bank officers and directors. Because regulatory enforcement activities have continued to increase since then, this article again highlights the importance to officers and directors of considering all of the possible consequences to themselves personally before voluntarily consenting to proposed enforcement orders.

Thus far this year, the FDIC has issued 519 enforcement orders, including 293 C&Ds, compared to 314 enforcement orders, including 142 C&Ds, in 2008. Although Congressional criticism of bank agency oversight may in some measure explain the spike in formal enforcement actions, it is likely that some form of supervisory action may have been warranted in most of those enforcement cases. However, in the current regulatory environment, formal enforcement action seems to be the only option.

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