Wednesday, June 18, 2008


"National City Corp.'s banking unit [made] a confidential agreement with the [OCC] ... over the past month or so. ... 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. ... National City was believed to be out of the woods with regulators since it raised $7 billion in capital from outside investors led by buyout firm Corsair Capital. ... A spokeswoman for National City declined to comment, citing company policy of not commenting on rumor or speculation. The OCC is a division of the Treasury Department that regulates national banks. ... [M]emorandums of understanding [MOUs] are considered serious and are fairly rare, though it is even less common for a bank to face a public enforcement action", WSJ, 6 June 2008.

National City's parent is publicly-held National City Corp., NCC-NYSE. Chris Cox (CC), are you listening? I reviewed recent NCC 8-K filings at the SEC's website, and found four: 21 April, 8 and 12 May and 10 June 2008. The instructions to Item 1.01 of Form 8-K govern disclosure of a "Material Definitive Agreement". Instruction B says the Form 8-K should be filed "within four business days after the occurrence of the event".

The 10 June Form 8-K attachment reads, "someone has breached the confidential relationship between National City and our regulators. Given the potential concerns and misunderstandings that this breach could cause for many of our stakeholders, we can confirm that National City entered into [MOUs] with the [OCC] and the Federal Reserve Bank of Cleveland on May 5 and April 29, 2008 respectively". Well, CC, will you look into this? Is this legal? Should you encourage the DOJ to bring criminal charges against the OCC and Fed employees responsible for this, if not legal? Will you do anything? The 10 June filing followed the 6 June WSJ article and was after the four-day filing period ended. To ensure you can't claim ignorance of the situation, I will mail you a letter bringing it to your attention.