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Peoples, Peoples agreed to address the CRA compliance issues
raised by the FDIC in the first CRA report.
In a CRA Performance Report as of the close of business
August 31, 1992 (second CRA report), FDIC identified additional
CRA compliance problems, including: (1) Lack of formal training
by Peoples of its employees on CRA compliance, (2) failure by
Peoples to monitor its own performance in complying with the CRA,
(3) failure by Peoples to review its lending patterns for
evidence of discriminatory lending practices, (4) loan-to-deposit
ratio, (5) low volume of farm and business credit extended, and
(6) lobby hours significantly below that of the competition. In
response to the second CRA report, the directors of Peoples
signed another Memorandum of Understanding on October 7, 1992
(second MOU).
Within a month after signing the second MOU, in an attempt
to improve its CRA compliance, Peoples created a new position--
compliance officer--and hired Thomas Krochta, a local attorney,
to do the job. Nevertheless, on December 31, 1992, as Mr.
Krochta was settling into his new position, Simona L. Frank,
Chicago regional director of FDIC's Division of Supervision,
wrote to the board expressing concern over Peoples' continued
noncompliance and requesting immediate corrective action. Ms.
Frank said that she planned to recommend to the national office
of the Division of Supervision that Peoples continue to be
designated a "problem bank" under the CRA. As a result of the
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