P.M. BRIEFING : ‘Shape Up,’ Eastern Bank Told
Federal regulators today directed the Bank of New England Corp. to comply with banking laws, review loan policies and study management needs at the financial giant rattled by real estate problems.
The cease-and-desist order, issued by the Office of the Comptroller of the Currency, which oversees national banks, sets guidelines for the struggling company’s efforts to return to sound financial health.
The huge bank, “without admitting or denying any unsafe or unsound banking practices or violations of law, rule or regulation,” agreed to comply with the directive, according to legal documents.
The Bank of New England, until recently the region’s second biggest bank holding company with subsidiaries in four states, has foundered on enormous losses in the region’s faltering real estate market. In 1989, it reported more than $1.1 billion in losses.
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