On September 25, the California DFPI announced that it seized an Irvine-based state-chartered bank and appointed the FDIC as receiver, citing the bank’s alleged deteriorating financial condition, executive mismanagement and regulatory violations, along with findings that the bank was operating with inadequate capital in an unsafe and unsound manner. The seizure followed numerous state and federal enforcement actions alleging repeated unauthorized changes to the board and executive management, executive self-dealing, and failure to comply with a March 2026 capital maintenance order. The Fed separately took enforcement action against the bank in 2022 related to governance, compliance, and insider trading risks and terminated that action in April 2025.

The FDIC separately announced it had entered into a purchase and assumption agreement with a Utah bank under which the institution agreed to assume all deposits and a substantial portion of the failed bank’s assets. In a separate statement, California Business and Consumer Services Secretary Rohit Chopra stated that the seizure underscored California’s commitment to holding “bad actors” accountable and maintaining a safe and sound banking system. Chopra also stated that California would play a leading role in addressing risks related to uninsured deposits, including heightened scrutiny for banks with high levels of such deposits.