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First Marblehead and Union Federal sign agreement and order with OTS
Jul 03, 2009 (Datamonitor via COMTEX) --
The First Marblehead has entered into a supervisory agreement with the Office of Thrift Supervision, or OTS, and Union Federal Savings Bank, a wholly owned subsidiary of First Marblehead, has entered into a stipulation and consent agreeing to the issuance of an order to cease and desist with the OTS.
Pursuant to the supervisory agreement and order to cease and desist, First Marblehead and the bank have agreed to take certain actions intended to address the concentration of private student loans on the balance sheet of the bank.
Both the agreement and the order relate to certain findings by the OTS in its examination of First Marblehead and the bank completed in August 2008. Due to the disruptions in the capital markets that began in late 2007, First Marblehead and the bank have not securitized a portfolio of newly originated private student loans since September 2007.
As a result, the bank has a higher balance of private student loans on its balance sheet than was projected in the business plan approved by the OTS in connection with First Marblehead's acquisition of the bank in late 2006.
Daniel Meyers, CEO of First Marblehead, said: "We have been working diligently on addressing these issues in collaboration with the OTS. We have already taken several steps to reduce the private student loan concentration at the bank, and First Marblehead has acted as a source of strength for the bank, providing capital and operational support. We are committed to continuing this progress and resolving all of these issues completely."
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