The Iowa Division of Banking and First American Bank, Fort Dodge, reached a settlement on March 6 that clears the way for the bank to cease operations and transfer its assets and liabilities to GreenState Credit Union. Admitting no wrongdoing, First American Bank agreed to pay the Iowa Division of Banking $110,700 to cover the IDOB’s costs associated with the dispute.
First American and the Iowa Superintendent of Banking write in the settlement agreement “that it is in the best interest of all involved” to settle the dispute. Citing the interests of First American’s former customers, the agreement notes that IDOB’s mission “includes protecting the interests of those doing business with Iowa state chartered banks. The agreement further notes that litigation of the dispute could have taken “months or years” to resolve.
The settlement statement, which is signed by Superintendent Jeff Plagge and First American President/CEO John A. Fisher, nonetheless states the “Superintendent reiterates his conclusion that such a transaction is not authorized and that the IDOB will quickly deny any future application based on a similarly structured transaction.”
While the IDOB is not authorized to impose a fine in this case, First American agreed to the payment to “cover all costs and expenses incurred in the discharge of the duties imposed upon the superintendent in connection with this matter.” Payment was due at the time of the execution of the settlement agreement.
The settlement comes one week after First American closed its transaction with GreenState Credit Union on Feb. 28. On March 2, the superintendent issued a letter denying First American’s application to cease operations in connection with the transaction. First American filed its application with the Iowa Division of Banking on Jan. 20.
“The IDOB appreciates First American’s cooperation in quickly reaching a settlement,” Plagge said in a press release.