[...] entered into memoranda of understanding with the Office of the Comptroller of the Currency and the Federal Reserve Bank of Cleveland on May 5 and April 29, respectively, effectively putting the bank on probation.
Chairman and Chief Executive Peter E. Raskind criticized the agreements' disclosure of late in the media. National City has been in focus as the regional bank has suffered significant impacts from the credit crisis, and the memoranda illustrate the growing regulatory pressure some financial institutions are under as they struggle to deal with fallout from the credit-market turmoil.
A glance at the stock price of a bank can be an quick indicator of where shareholders stand. On the other hand, the health of depositors' accounts isn't so easy to ascertain. At least, for some of us.
Under such agreements, which are entered into privately and aren't publicly disclosed, banks are given an opportunity to work with federal regulators to address serious financial problems without triggering alarm among depositors. Regulators usually urge banks to maintain adequate capital and improve lending standards.
Source: National City Confirms MOU With Regulators
And there you have it.
All this trouble stems from making risking loans in the subprime market.
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