New Mexico bankers fined and banned by OCC

Two former New Mexico bankers have been issued Orders by the Office of the Comptroller of the Currency banning them from the industry and ordering them to pay civil money penalties of totaling $17,500.

The Orders were issued to William Enloe, former chief executive officer and chairman of the board, and Jill Cook. former senior vice president and chief credit officer, of Los Alamos National Bank, Los Alamos, New Mexico.

The OCC found that Jill Cook, formerly the Senior Vice President and Chief Credif Officer for Los Alamos National Bank, Los Alamos, New Mexico, was "responsible for an unsafe or unsound credit administration program at the Bank, which included numerous unsafe or unsound practices that masked deterioration in the Bank’s loan portfolios. Unsafe or unsound practices that [Cook] engaged in, or instructed others to engage in, included among other things, advancing additional credit to troubled borrowers to make principal and interest payments on past-due loans; backdating loan documents; using projections and future events to risk-rate loans favorably; preventing loans from being properly risk-rated substandard or worse despite the presence of well-defined weaknesses in the loans; rejecting unfavorable appraisals and delaying the receipt of appraisals showing declining values; and delaying the recognition of charge-offs for impaired loans. As a result, the Bank filed materially misstated Consolidated Reports of Condition and Income (Call Reports) for every quarter from December 31, 2010 through December 31, 2012."

The OCC also found that the bank "expended significant resources and incurred more than $4,000,000 in external audit and consulting fees to determine and address the impact of the unsafe or unsound credit administration program on its financial statements, which culminated in the Bank restating its financial statements and Call Reports dating back to December 31, 2010."

The OCC also found that Cook was aware of, and approved alterations of the HMDA data in the bank's records, and obstructed the OCC's 2012 examination by authorizing a loan officer to destroy loan documents and requesting bank employees to limit examiner access to the bank's electronic records.

As for Enloe, the OCC found that he was "responsible for creating a culture and implementing and participating in an unsafe or unsound credit administration program at the Bank, which included numerous unsafe or unsound practices that masked deterioration in the Bank’s loan portfolios," listing the same practices enumerated with respect to Cook.

This action is related to enforcement actions by the Federal Reserve Board and SEC in 2015 against the bank and its holding company.