Another area bank under an FDIC consent order

The Savannah Morning News is reporting this afternoon that The Coastal Bank is under an FDIC consent order, which is often a first response when regulators decide that a bank has too many non-performing assets on its books. Pretty much all the banks in Georgia that have found themselves under FDIC scrutiny got there because of too much exposure during the boom years to commercial and/or residential real estate.

A consent order does not mean The Coastal Bank is in imminent danger of closure. First Chatham Bank has been operating under a consent order since July 2010, almost a year ago. The Heritage Bank in Hinesville has been operating under a consent order since December.

There are about 1,000 banks across the country currently operating under some sort of regulator scrutiny. I have written repeatedly about how much worse this problem is in Georgia than in the country as a whole. Clearly, we need some serious scrutiny of the state rules that allowed the proliferation of banks during the boom and of other regulatory issues, but Georgia politicians have shown no inclination to ask even the most basic questions.