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The Federal Deposit Insurance Corp. has fined Transportation Alliance Bank for violating a cease-and-desist order issued one day after parent company Flying J filed for bankruptcy in 2008.
TAB agreed to pay the $97,500 fine without admitting or denying the charge, the FDIC announced Friday.
In June, the agency told TAB it had "reason to believe" the bank violated the December 2008 order by exceeding the allowable level of brokered deposits it held during a two-week period last September.
Jeff Bell, president of TAB, did not return telephone calls seeking comment.
In an e-mail, Bell said the bank "settled this months ago, but the FDIC only recently signed the ... agreement and made it public."
Brokered deposits are funds pumped into banks by customers chasing high interest rates with little regard for where their money sits, as long as it is insured by the FDIC. Regulators don't like banks to hold large levels of brokered funds because depositors are likely to yank them out if they find another financial institution is paying higher rates.
TAB provides Flying J fuel and diesel purchase cards to truck drivers and recreational vehicle users. It also provides financing for truck equipment purchases.
Flying J filed Chapter 11 bankruptcy petitions on Dec. 22, 2008, citing weak oil prices and turmoil in credit markets. A day later, the FDIC issued a cease-and-desist order to TAB. The bank was instructed to refrain from any "unsound" practices that might arise because of the deterioration of Ogden-based Flying J.
In July, Flying J exited bankruptcy after a U.S. Bankruptcy Court in Delaware approved the company's plan to repay $1.4 billion that it and two subsidiaries owed to creditors.
Flying J raised the money by selling its travel centers, an oil refinery and an oil pipeline.