California’s leading financial watchdog has issued a cease and desist order against Nano Banc, saying the $ 1.2 billion asset bank violated a consent order signed earlier this year by replacing a list of board members and appointing a new CEO without notifying state regulators. .
State Department of Financial Protection and Innovation gave an order in February which forced the bank to improve its capital position and reduce its concentration of commercial real estate loans. The order also specified that the bank in Irvine, Calif., Must obtain regulatory approval before announcing any change in management.
The Federal Reserve also raised concerns in March on high concentrations of CRE loans, according to a March coercive action by the agency.
The regulator said it was informed on December 13 that Nano Banc shareholders removed six directors and put two senior executives on paid administrative leave, according to the cease and desist order of December 15. Five directors were elected to the board of directors and a new CEO was also installed.
The decree did not name the directors, the executives put on leave or the name of the new chairman and chief executive officer. Nano Banc made no public mention of the decisions and a company spokesperson did not respond to a request for comment.
Nano Banc was co-founded by Mark Troncale, Mark Rebal and Anthony Gressak as a financial technology company focused on fighting fraud in the wire transfer industry. In 2018, the company entered commercial banking with the acquisition of Commerce Bank of Temecula Valley in Murrieta, California.
Rebal had been the CEO of the bank.
The February order required the ministry to be given at least 30 days’ notice before the company could announce changes. And no new executive could be appointed without written approval from the commissioner in the form of a letter of no objection.
The commissioner of the California Department of Financial Protection and Innovation warned that measures taken in violation of the February order “could weaken the situation of the bank.”
Nano Banc is required under the new ordinance to cease operations under the leadership of the new CEO and new board members until receipt of the letter of no objection.
According to the Dec. 15 ordinance, continued violation of the February ordinance “will be considered to conduct business in a dangerous or unhealthy manner” and expose the company to civil penalties.
A spokesperson for the California Department of Financial Protection and Innovation declined to comment.