Fed ends enforcement orders at United Texas Bank and Quontic

The Federal Reserve closed out two supervisory matters this week, announcing on September 4 that it has terminated enforcement actions with United Texas Bank of Dallas and with two holding companies tied to Quontic Bank in Astoria, New York. The terminations took effect September 2 and mark the end of a bank enforcement action cycle that began in 2023 and 2024.

Key takeaways

• United Texas Bank’s cease and desist order, dated August 29, 2024, was terminated September 2, 2026.
• Quontic Bank Acquisition Corp. and Quontic Bank Holdings Corp. had a written agreement dated July 5, 2023, also terminated September 2, 2026.
• The Board’s notice gives no reason for either termination.

The news

The Federal Reserve Board announced the terminations in a short release. For United Texas Bank, the action ended is a cease and desist order from August 29, 2024. For Quontic Bank Acquisition Corp. and Quontic Bank Holdings Corp., both of Astoria, New York, the action ended is a written agreement dated July 5, 2023.

Measured from signing to termination, the United Texas order lasted just over two years, and the Quontic written agreement about three years and two months. The Board links to the original documents in its enforcement database and points readers to its search tool for other actions.

Our analysis

Enforcement orders are public when they begin and when they end, which makes terminations a useful read on supervisory judgment. A cease and desist order or written agreement is typically lifted when supervisors conclude that the institution has corrected the deficiencies the document described and that the controls are sustainable. The Fed’s announcement does not say what the underlying concerns were or how they were resolved, so outsiders should avoid inferring more than the dates support.

What the terminations do change is practical. Restrictions that commonly sit in such orders, such as limits on dividends, capital distributions, new debt, executive appointments and expansion, no longer apply. Management can plan around a supervisory relationship that is no longer dictated by a formal document. For a bank that wants to pursue acquisitions or a capital raise, a clean enforcement record also removes a question that regulators and counterparties would otherwise ask.

For the two Quontic holding companies the termination is also a reminder that written agreements are directed at parents as well as banks. The holding company is often the legal entity through which capital and dividend decisions run.

The two matters also differ in type. Both are formal enforcement actions. A cease and desist order is an order, often issued on consent, that can be enforced in court, while a written agreement is a negotiated document in which the institution commits to specific corrective steps. Both are public, both are listed in the Board’s database, and both have to be formally terminated before the restrictions end, which is why the dated notice matters.

Room for disagreement

Some observers argue that regulators should publish more about why orders end, since the public sees the restrictions in detail at the start and only a date at the end. Others note that detailed termination findings draw on confidential supervisory information, which regulators are limited in disclosing. Both views are consistent with the minimal notice the Board issued here.

For readers who track bank enforcement action trends, a termination is the end of the cycle that a new order starts: the institution agrees to terms, files plans and progress reports, and supervisors decide at some point that the requirements have been met.

What to watch

The Board posts terminations alongside new actions, so its enforcement database remains the place to track whether the pace of terminations changes relative to new orders.