STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

UNION CREDIT BANK, )

)

Petitioner, )

)

vs. ) Case No. 00-1187

)

DEPARTMENT OF BANKING AND ) FINANCE, DIVISION OF BANKING, )

)

Respondent. )

)

REPORT OF PUBLIC HEARING

The Department of Banking and Finance, Division of Banking, requested a public hearing pursuant to Subsection 120.80(3)(a), Florida Statutes. Pursuant to notice, the mandatory public hearing was held in this case on May 22, 2000, by video teleconference at sites in Miami and Tallahassee, Florida, before Errol H. Powell, a designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Alcides I. Avila, Esquire

Patricia M. Hernandez, Esquire Holland & Knight, LLP

701 Brickell Avenue, Suite 3000

Miami, Florida 33131

For Respondent: Robert Alan Fox, Esquire

Department of Banking and Finance

101 East Gaines Street

The Fletcher Building, Suite 526 Tallahassee, Florida 32399-0350

STATEMENT OF THE ISSUE

The purpose of the mandatory public hearing is to afford the public an opportunity to comment on the application from a foreign national for authority to organize Union Credit Bank, a proposed new bank to be located in Miami, Dade County, Florida.

PRELIMINARY STATEMENT

On October 18, 1999, the Department of Banking and Finance, Division of Banking (Department) received an application from a foreign national for authority to organize Union Credit Bank (Union Credit). On March 15, 2000, pursuant to Subsection 120.80(3)(a)4, Florida Statutes, the Department ordered, among other things, that a mandatory hearing on the application be held before the Division of Administrative Hearings (DOAH) in accordance with Sections 120.569, 120.57, and 120.80(3), Florida Statutes. On March 17, 2000, this matter was referred to DOAH.

Pursuant to Subsection 120.80(3)(b), Florida Statutes, this Administrative Law Judge's responsibility is to submit to the Department and the parties "a written report consisting of findings of fact and rulings on evidentiary matters." After receiving the report, the Department must determine whether Union Credit and its proposed officers and directors meet the criteria in Section 658.21, Florida Statutes, and whether a Conditional Final Order should be issued.

The parties filed a Joint Prehearing Stipulation prior to the public hearing. At the public hearing, Union Credit

presented the testimony of three witnesses and entered seven exhibits (Petitioner's Exhibits numbered 1-7) into evidence. Union Credit was permitted to late-file its exhibits. The Department did not call any witnesses, but entered five exhibits (Respondent's Exhibits numbered 1-5) into evidence. Official recognition was taken of Rules 3C-105.101-.114, Florida Administrative Code.

A transcript of the public hearing was ordered. At the request of the parties, the time for filing post-hearing submissions was set for ten days following the filing of the transcript.

The Transcript, consisting of one volume, was filed on June 8, 2000. The parties timely filed a Joint Proposed Report of Public Hearing on June 19, 2000. The parties' Joint Proposed Report of Public Hearing is hereby adopted by the undersigned.

FINDINGS OF FACT

1. On October 18, 1999, the Department received an application (Application) from a foreign national to organize a new bank, Union Credit. The proposed location of Union Credit was Miami, Dade County, Florida.

2. The Department published a notice of receipt of the Application in the October 29, 1999, publication of the Florida Administrative Weekly. The Department has satisfied the notice requirements of Subsection 120.80(3)(a)1.a., Florida Statutes, and Rule 3C-105.103, Florida Administrative Code.

3. By letter dated November 8, 1999, the Department made a timely request for additional information, including additional information from Union Credit's proposed officers and directors (Applicants).

4. The Department did not receive all of the additional information that it had requested from the Applicants until March 1, 2000.

5. On April 3, 2000, the Applicants, as required by federal law, filed a separate application with the Federal Deposit Insurance Corporation ("FDIC").

6. Identified on the Application are three individuals associated with Union Credit, Oddie Rishmague (O. Rishmague) , Miguel Rishmague (M. Rishmague), and Jorge Luis del Rosal, who are foreign nationals. Mr. O. Rishmague is a proposed director and the proposed sole owner. Mr. M. Rishmague is a proposed director, the proposed chairman of the board of directors, and a proposed officer. Mr. del Rosal is a proposed director.

7. All other proposed officers and directors identified on the Application are citizens of the United States. The other proposed officers and directors are: John H. Blake, Alexander J. Evans, Robert Tamayo, Milton H. Lehr, and Grace V. McGuire.

8. Mr. O. Rishmague, a proposed director and the proposed sole owner of Union Credit has more than 12 years of international banking experience. From 1988 to 1995, he served as Vice-Chairman of Banco Osorno. During his tenure, Banco

   Osorno grew from a small bank to the second largest bank in Chile. For the past five years, Mr. O. Rishmague has been a member of the board of directors of Corpbanca.

9. In addition to his banking experience, Mr. O. Rishmague served as a director of Provida, a private company that manages

   $12 billion dollars of pension fund assets.

   
   

10. Mr. Tamayo is the proposed president and chief executive officer for Union Credit. He has over 38 years of banking experience in the areas of international and domestic banking. From 1984 to July of 1993, Mr. Tamayo served as a Senior Vice President for Espirito Santos Bank of Florida, a state chartered domestic bank. From July of 1993 to 1999, he served as a Senior Vice President and General Manager of Banco Boliviano Americano’s Miami agency office.

11. Mr. Lehr, a proposed director, has substantial banking experience. From 1976 to 1999 he served as a member of the board of directors of Republic National Bank of Miami.

12. Mr. Blake, a proposed director, has over 13 years of banking experience. From 1986 to 1999 Mr. Blake served as a member of the board of directors of Republic National Bank of Miami.

13. Mr. M. Rishmague, the proposed chairman of the board of directors, served two years as a member of the board of directors of Corpbanca.

14. Ms. McGuire, a proposed director, is a self-employed bank consultant who has worked with numerous domestic and international banks on a variety of complex banking issues.

15. Mr. del Rosal is a retired corporate executive.

    
    

16. Mr. Evans is a certified public accountant.

    
    

17. No evidence was presented and there is nothing in the record to indicate that the presently identified proposed officers do not have sufficient financial institution experience, ability, standing, and reputation to indicate reasonable promise of successful operation.

18. No evidence was presented and there is nothing in the record to indicate that the proposed directors do not have sufficient business experience, ability, standing, and reputation to indicate reasonable promise of successful operation.

19. None of the proposed officers or directors have been convicted of, or pled guilty or nolo contendere to, any violation of Section 655.50, Florida Statutes, relating to the Florida Control of Money Laundering in Financial Institutions Act; Chapter 896, Florida Statutes, relating to offenses related to financial institutions; or any similar state or federal law.

20. Mr. Blake and Mr. Lehr, proposed directors who are not proposed officers, have had at least one year of direct experience as a director of a financial institution within three years of the date of the Application.

21. Mr. Tamayo, the proposed president and chief executive officer, has had at least one year of direct experience as an executive officer of a financial institution within the last three years.

22. The Applicants seek to organize Union Credit to provide a variety of competitive deposit products and other related banking services, including residential and commercial lending, within the Miami area. Union Credit’s target customers include individual consumers, professionals, and both small and large businesses.

23. The initial gross capital for Union Credit will be

    
    

    $10,000,000.00, and will be classified as follows:

    
    

    1. $5,000,000.00 of paid-in capital;

       
       

    2. $4,750,000.00 of paid-in surplus; and

       
       

    3. $250,000.00 designated as undivided profits.

    
    

24. Union Credit is authorized to issue, at opening, 1,000,000 shares of common stock at $10.00 per share. The initial capitalization of Union Credit is adequate in relation to its proposed business activities.

25. However, should Union Credit’s capital fall below

    
    

    $10,000,000.00 within its first three years of operation, Mr. O. Rishmague will immediately contribute, from his own personal assets, the funds necessary to maintain Union Credit’s capital at the level of $10,000,000.00, thus ensuring that Union Credit’s gross capital remains, at a minimum, at $10,000,000.00.

    Thereafter, Mr. O. Rishmague has committed to infuse additional capital, as may be appropriate, as Union Credit grows in asset size.

26. The local conditions in Miami are favorable to Union Credit’s business plan. Union Credit’s financial plan also appears reasonable and attainable.

27. The Department and Applicants recognize that the corporate name of Union Credit is not, and cannot, be reserved with the Department of State. The Department of State no longer reserves corporate names.

28. Union Credit will have suitable quarters. It will be located at 1150 South Miami Avenue, Miami, Florida.

29. No member of the public appeared at the public hearing or spoke in opposition to the Application.

30. No one testified in opposition to the Application.

    
    

31. The Applicants cause notice of the public hearing to be published in the Miami Herald on May 4, 2000. The notice complied with the requirements of Rule 3C-105.106(1), Florida Administrative Code. The Applicants satisfied the notice requirements of Subsection 120.80(3)(a)4, Florida Statutes.

DONE AND ENTERED this 3rd day of July, 2000, in Tallahassee, Leon County, Florida.

ERROL H. POWELL

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 3rd day of July, 2000.

COPIES FURNISHED:

Alcides I. Avila, Esquire Patricia M. Hernandez, Esquire Holland & Knight, LLP

701 Brickell Avenue, Suite 3000

Miami, Florida 33131

Robert Alan Fox, Esquire Department of Banking and Finance

101 East Gaines Street Fletcher Building, Suite 526

Tallahassee, Florida 32399-0350

Honorable Robert F. Milligan Office of the Comptroller Department of Banking and Finance The Capitol, Plaza Level 09 Tallahassee, Florida 32399-0350

Harry L. Hooper, General Counsel Department of Banking and Finance Fletcher Building, Suite 526

101 East Gaines Street Tallahassee, Florida 32399-0350

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 10 days from the date of this report. Any exceptions to this report should be filed with the agency that will issue the final order in this case.

Docket for Case No: 00-001187

Orders for Case No: 00-001187