FDIC Warns Banks

The Federal Deposit Insurance Corporation revealed that it had issued warnings to four small U.S. banks that lacked sufficient reserves to cover potential loan losses. The cease-and-desist orders issued in June said the four banks needed to raise more capital, expand their loss allowances and better oversee and diversify their loan portfolios. A fifth bank was cited for violating consumer protection laws. The banks receiving cease-and-desist orders in June were MetroPacific Bank in Irvine, California; Bank Haven in Haven, Kansas; Clarkston State Bank in Clarkston, Michigan; and Hastings State Bank in Hastings, Nebraska. Losses on mortages and other loans have helped bring down eight US banks this year.