Fed Announces Enforcement Action Against Irwin Financial Corp

The U.S. Federal Reserve Wednesday announced an enforcement action against Irwin Financial Corporation (IFC) in effort "to correct certain deficiencies" at the banking holding company.

Under the cease and desist order, Irwin must take steps to ensure that its subsidiary bank, Irwin Union Bank, is functioning in a safe and sound manner.

For instance, the order calls on Irwin to meet certain capital guidelines. The firm must maintain a consolidated total risk-based capital ratio of at least 11% by the end of the month and achieve a total risk-based capital ratio of at least 12% by the end of the month as well.

Additionally, the bank holding firm has 10 days to submit a plan to the Fed to reduce Irwin Union Bank's reliance on wholesale deposits.

Also, Irwin and the bank cannot sell or dispose of any asset without prior approval from the Fed, according to the order.

The Fed said Irwin and its banking unit failed to fully comply with an October 2008 written agreement between the holding company, the bank and the Federal Reserve Bank of Chicago. That agreement was designed to correct certain deficiencies "relating to safety and soundness," the central bank said in the order.

Irwin is an Indiana based firm that provides a broad range of banking services to small businesses and consumers in the Midwest and Southwest.

-By Maya Jackson Randall, Dow Jones Newswires; 202-862-9255, [e-mail]