Regulators lift HomeStreet sanctions

Federal Reserve Bank of San Francisco lifts last of sanctions against HomeStreet

Associated Press

SEATTLE (AP) -- HomeStreet Inc. said Wednesday that it has been freed from the last of its regulatory sanctions.

The Seattle-based bank holding company said it was notified by its regulator, the Federal Reserve Bank of San Francisco, that it's in full compliance with its May 2009 "cease and desist order" and that the order has been terminated.

Late last year, the Federal Deposit Insurance Corp. and the Washington Department of Financial Institutions lifted a so-called memorandum of understanding against the company's HomeStreet Bank.

That memorandum had replaced a "cease and desist order" that had been in place since 2009 and accused HomeStreet Bank of "unsatisfactory lending and collection practices" and of "operating with a large volume of poor quality loans."

The 2009 order directed the bank to stop lending to borrowers who had already defaulted on other loans. It also ordered the bank to tighten its lending policies and to limit its concentration of loans in commercial real estate and development and construction.

HomeStreet operates bank branches in the Pacific Northwest and Hawaii. Its shares fell 29 cents to $22.95 in afternoon trading.

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