The U.S. Federal Deposit Insurance Corporation (FDIC) recently increased oversight of three Minnesota banks.

The FDIC issued consent orders to St. Francis-based Village Bank, Wyoming-based Patriot Bank Minnesota, and Tracy-based Minnwest Bank South.

The FDIC announced last week that the orders had been issued to the Minnesota banks-all of which received the orders in September. Nationally, the FDIC issued 30 consent orders in September.

The FDIC ordered Village Bank to “take action to have and maintain qualified management.” The bank must have a qualified chief loan officer to comply with regulations and “restore the loan portfolio to a satisfactory condition.”

It also needs to hire an outside consultant to assess the performance of the bank's staff, and “eliminate and/or correct all violations of law,” although there is no description of specific violations.

Among other things, the bank must revise its overdraft policy, reduce at-risk assets, develop a three-year business plan, and maintain a total risk-based capital ratio of at least 11 percent. As of June 30-the most recent data available from the FDIC-Village Bank had a total risk-based capital ratio of 11.9 percent, which meets standard requirements for being categorized as “capitalized.”

Calls to executives at each bank requesting financial figures for the quarter that ended September 30 were not immediately returned.

Patriot Bank Minnesota faces fewer obligations than Village Bank. It too must assess its management, halt loans to risky borrowers, charge off bad assets, and achieve a total risk-based capital ratio of at least 11 percent. As of June 30, the bank had a total risk-based capital ratio of 10.6 percent.

Minnwest Bank South has been ordered to comply with stipulations similar to those of Patriot Bank Minnesota, but it must achieve a total risk-based capital ratio of at least 11.5 percent. Its ratio was 11.34 at the end of June.