Oregon Public Broadcasting

Bend’s largest local bank, Bank of the Cascades, is working hard to reassure customers that their bank accounts are safe. Last week, the bank received a cease and desist order from federal regulators.

Central Oregon correspondent Ethan Lindsey reports.

A cease-and-desist order is considered one of the harshest actions from the Federal Deposit Insurance Corporation. It is rarely used.

The state acted jointly with the FDIC, and according to a draft of the order, the bank is alleged to have practiced “unsafe or unsound” banking practices.

Bank of the Cascades’ balance sheet has been hit hard by the collapse of central Oregon real estate and thousands of delinquent or unpaid home loans.

Patty Moss is the president and CEO of Cascade Bancorp.  She says the bank will not have to close.

Patty Moss: “No, we are not. We are not concerned about closure at all. And of course, we had a whole communication plan in place for customers and employees, and our customers have been incredibly supportive.”

Among other things, the bank must increase its capital holdings. Moss says she is working with shareholders to up their investments – possibly a tall order in the current economic climate.