Rating:

4.0 (4 votes)

A decline in the economy and the real estate market has hit several Montana banks, from Billings to Bozeman to Helena, and banking regulators are taking action to ensure Montana's money is safe.

Montana Division of Banking Commissioner Annie Goodwin says, "What we have seen in Montana is not unlike what has been occurring nationally. The economy nationally has been distressed and it has also occurred in Montana."

Banking regulators have a series of tools which they use to monitor banking practices. Over the last two years the State Division of Banking has seen an increase in enforcement actions taken.

"Our institutions and our banks are not isolated from the national economy nor from what is occurring in Montana's economy. These orders are in fact an action plan to allow the banks to improve and to strengthen," Goodwin says.

In Montana, at least six banks are currently undergoing disciplinary action: American Bank in Bozeman, the Bank of Bozeman, Ravalli County Bank in Hamilton, Lake County Bank in Saint Ignatius, Beartooth Bank in Billings, and Mountain West Bank which has offices across the state.

Goodwin says regulators step in to address the bank's capital condition, credit quality, and also loan loss provisions.

The FDIC, Federal Reserve, and Montana Division of Banking regulate state-chartered banks, while the Office of the Comptroller of the Currency regulates national banks. Five of these banks are regulated at the state level, while Mountain West Bank is regulated at the federal level.

Goodwin says due to the drop in the real estate market these banks have over lent, or lent to borrowers who have defaulted.

Goodwin says it's the regulators job to enforce safe banking practices, and by issuing enforcement orders they hope to bring the banks back into compliance.

"There is no need to panic, there is the FDIC insurance that exists for all customers that provide deposits of money in our FDIC insured banks," Goodwin said, noting that the FDIC insures deposits up to $250,000 per account.

Goodwin says regulators give the banks varying time-frames to turn their practices around. If the bank complies, the enforcement actions are terminated. If they don't it could result in further disciplinary action and even closure.

Goodwin assures the public these regulatory measures are in place to protect consumers and their money.

Montana's News Station will have stories in the upcoming days on some of these banks, and where they're at in complying with the regulators.

Consent Orders & Enforcement Actions (PDF links):

American Bank, Bozeman Montana

Bank of Bozeman, Bozeman Montana

Beartooth Bank, Billings Montana

Ravalli County Bankshares, Hamilton Montana

Lake County Bank, St. Ignatius Montana

Mountain West Bank, Helena, Great Falls, Missoula, Bozeman, Whitefish, Kalispell, Polson