United Texas Bank, Quontic Entities See Federal Reserve Actions Terminated

The Federal Reserve Board on Friday announced the termination of enforcement actions against United Texas Bank of Dallas, Texas, and against Quontic Bank Acquisition Corp. and Quontic Bank Holdings Corp., both of Astoria, New York. According to the Board’s announcement, dated September 4, 2026, both actions were terminated on September 2, 2026.

The terminated actions are a Cease and Desist Order against United Texas Bank dated August 29, 2024, and a Written Agreement with the two Quontic holding companies dated July 5, 2023.

United Texas Bank Cease and Desist Order

The consent Cease and Desist Order was issued by the Board of Governors of the Federal Reserve System together with the Texas Department of Banking, the bank’s state supervisor. United Texas Bank is a Texas state-chartered bank that is a member of the Federal Reserve System. The Board announced the execution of the order on September 4, 2024.

According to the order, an examination of the bank as of May 22, 2023, conducted by the Federal Reserve Bank of Dallas and the Texas Department of Banking, identified significant deficiencies in the bank’s corporate governance and in oversight by its board of directors and senior management. The examination also identified significant deficiencies related to foreign correspondent banking and virtual currency customers, specifically in risk management and in compliance with anti-money laundering laws and regulations, including the Bank Secrecy Act, resulting in a compliance program violation.

The order required the bank’s board to submit, within 90 days, a written plan to strengthen board oversight of compliance with BSA/AML requirements and with regulations issued by the U.S. Treasury Department’s Office of Foreign Assets Control. Within 60 days, the bank was required to submit a corporate governance plan addressing the findings of an independent third-party report dated January 31, 2024, as well as a revised BSA/AML compliance program incorporating the findings of a second independent third-party report dated July 3, 2024. The revised program was required to include a comprehensive risk assessment, enhanced independent testing, and management of the program by a qualified compliance officer with full autonomy and adequate staffing.

The order further required, within 60 days, a revised customer due diligence program covering the collection and retention of customer information, risk-rating methodologies, and remediation of deficient due diligence for existing accounts; a revised suspicious activity monitoring and reporting program, including documented monitoring methodologies and escalation procedures; and a written plan to enhance compliance with OFAC regulations. The bank was also required to submit board-approved written progress reports to the supervisors within 30 days after the end of each calendar quarter.

The bank consented to the order without admitting or denying any charges of unsafe and unsound banking practices or violations of applicable Texas law, and it waived its rights to a notice of charges, a hearing, and judicial review. The order was signed for the bank by Chief Executive Officer Greg Quarles and for the Texas Department of Banking by Texas Banking Commissioner Charles G. Cooper, and it was effective August 29, 2024. Its provisions were binding on the bank and its institution-affiliated parties and were to remain effective until stayed, modified, suspended, or terminated in writing by the supervisors.

Quontic Holding Companies Written Agreement

The Written Agreement was executed as of July 5, 2023, among Quontic Bank Acquisition Corp., Quontic Bank Holdings Corp., and the Federal Reserve Bank of Philadelphia. The Board announced its execution on July 6, 2023. Acquisition Corp. is a registered savings and loan holding company that owns and controls Holdings, also a registered savings and loan holding company, which in turn owns and controls Quontic Bank of Astoria, New York, a federal savings bank. The agreement was signed for the companies by Sherri Silver Schnall, Director and Chairwoman of Acquisition Corp. and a director of Holdings, and for the Reserve Bank by Vice President William T. Wisser.

Under the agreement, the companies’ boards were required to take appropriate steps to fully utilize their financial and managerial resources to serve as a source of strength to Quontic Bank, pursuant to section 38A of the Federal Deposit Insurance Act and section 238.8(a) of the Board’s Regulation LL. That obligation included taking steps to ensure the savings bank’s compliance with a Consent Order it entered into with the Office of the Comptroller of the Currency on October 5, 2022, and with any other supervisory action by the savings bank’s federal regulator.

The agreement imposed immediate capital conservation restrictions. The companies could not declare or pay dividends, repurchase shares, or make any other capital distribution, including interest payments on subordinated debentures, without the prior written approval of the Reserve Bank and the Director of Supervision and Regulation of the Board. They also could not incur, increase, or guarantee any debt without the Reserve Bank’s prior written approval, with approval requests required at least 30 days before a proposed transaction.

Within 60 days, the companies were required to submit a written capital plan to maintain sufficient capital on a consolidated basis and to provide financial support to the savings bank, addressing expected sources and uses of capital and the adequacy of the savings bank’s capital. If the companies’ capital ratios fell below the approved plan’s minimums in any quarter, they were required to notify the Reserve Bank in writing within 45 days and submit a plan to restore the ratios. The agreement also required cash flow projections for the remainder of 2023 within 60 days and for each subsequent calendar year at least one month before that year began.

Additional provisions required compliance with the notice requirements of section 32 of the FDI Act when appointing directors or senior executive officers, and with the indemnification and severance restrictions of section 18(k) of the FDI Act and Part 359 of the Federal Deposit Insurance Corporation’s regulations. The companies submitted quarterly written progress reports, along with parent-company-only balance sheets and income statements, within 45 days after each calendar quarter. The agreement was enforceable by the Board under section 8 of the FDI Act and remained effective until stayed, modified, terminated, or suspended in writing by the Reserve Bank.

Related Supervisory Developments

The termination announcement does not state the Board’s reasons for ending either action, and it lists no civil money penalty in connection with the terminations.

For United Texas Bank, the termination follows a change in its primary supervisor. On May 15, 2026, the Board announced that it did not object to the bank’s conversion from a state member bank supervised by the Federal Reserve to a national bank supervised by the OCC. According to that announcement, the Dodd-Frank Act requires the Board to not object when a state member bank subject to certain Board enforcement actions proposes to convert to a national bank, and the OCC submitted a supervisory plan addressing the matters underlying the enforcement action between the bank, the Board, and the Texas Department of Banking, to which the Board also did not object.

The OCC’s July 2026 enforcement actions release documents the next steps on both sides of this announcement. The OCC issued a cease and desist order against United Texas Bank for deficiencies in its BSA/AML compliance program; the order states that the bank consented to it as part of its conversion to a national bank supervised by the OCC. The OCC states that it terminates enforcement actions when a bank has demonstrated compliance with all articles of an action, when articles deemed not in compliance have become outdated or irrelevant to the bank’s current circumstances, or when it incorporates articles deemed not in compliance into a new action. In the same release, the OCC disclosed an order terminating the October 5, 2022 consent order against Quontic Bank.