Order No. 2003-009

In The Matter Of:

Mary Christine Gonzales
Bridge City, Texas

Before The Banking Commissioner of Texas
Austin, Travis County, Texas

Order Prohibiting Participation in the Affairs of a State Bank

On this day, the matter of Mary Christine Gonzales, of Bridge City, Texas (“Respondent”) was submitted to me, Randall S. James, Banking Commissioner of the State of Texas (“Commissioner”), for consideration and action

I. Findings

  1. Respondent worked for Bridge City State Bank (the “Bank”) for over 29 years.
  2. Respondent was the Bank's primary consumer lender for 20 years and was responsible for the bank's credit card program, which was introduced in 1989.
  3. At the time of Respondent's resignation on November 30, 2001, she was a Vice President at the Bank.
  4. On May 17, 2000, without proper authorization, Respondent approved and issued a credit card in her name, and then increased the credit limit on the credit card without proper authorization.
  5. Respondent exceeded the unsecured lending limit the Bank set for its vice presidents by extending unsecured credit to the persons listed in paragraph 1 on the Confidential Addendum to Order Prohibiting Participation in the Affairs of a State Bank (“Confidential Addendum”).
  6. On several occasions, Respondent extended credit to the persons listed in paragraph 2 of the Confidential Addendum, without evidence of their ability to service the debt. Respondent then granted these same customers unjustified extensions in excess of the Bank's policy on the number of allowable extensions.
  7. Respondent approved excessive loan extensions to the family members listed in paragraph 3 of the Confidential Addendum.
  8. Respondent accepted severe loan-to-value excesses, granted unjustified due date extensions, advanced funds without apparent borrower capacity to repay, and inappropriately capitalized NSF fees for the persons listed in paragraph 4 of the Confidential Addendum.
  9. Respondent approved overdraft balances in excess of her authorized unsecured lending limit for the persons listed in paragraph 5 of the Confidential Addendum.
  10. To cover up excessive overdrafts, Respondent misappropriated, advanced, and redirected bank funds and added overdrafts to existing non-advancing notes without following proper loan renewal procedures, obtaining customer signatures, and/or documenting the advance for the persons listed in paragraph 6 of the Confidential Addendum.
  11. Respondent extended due dates on her own accounts without proper authorization or approval.
  12. Respondent concealed evidence of her inappropriate activities by:
    1. Not including a number of credit lines in reports to the holding company's chief financial officer for the quarterly Call Report Schedules RC-N from September 30, 1998 through September 30, 2001.
    2. Preventing other bank personnel from reviewing the monthly credit card trial balance from The Independent Bankers Bank.
    3. Using interior transfer accounts to cover the excessive overdrafts she authorized.
    4. Not including the extensions of credit she made to herself on a new loan report to the Bank's board of directors

II. Conclusions

  1. Respondent violated Texas Finance Code § 35.002(a)(4) by conducting business at the Bank in an unsafe and unsound manner by not complying with the Bank’s board of director approved policies and procedures, including, but not limited to, approving loans in excess of prescribed limits, approving loans in excess of establish loan to value ratios, and by not following loan policy underwriting guidelines.
  2. Respondent violated Texas Finance Code § 33.108(b)(1) by knowingly making false entries in the past due credit card reports and/or statements she sent the bank holding company chief financial officer for inclusion in Schedule RC-N of the Call Reports for September 30, 1998 through September 30, 2001.
  3. The Bank has suffered financial loss in thousands of dollars of charged-off loans as a result of Respondent's actions.
  4. The Respondent's actions involved personal dishonesty on Respondent's part and demonstrated a willful disregard for the safety and soundness of the Bank.
    espondent's actions constitute sufficient grounds for the Commissioner to issue an order, under § 35.003 of the Code, prohibiting Respondent from further participation in the affairs of a state bank, as defined by Texas Finance Code §31.002(50) (“state bank”).

III. Order

It is, therefore, ORDERED, ADJUDGED and DECREED that Mary Christine Gonzales is prohibited from:

  1. office or employment in or otherwise participating in the affairs of a state bank;
  2. participating in any manner in the conduct of the affairs of a state bank;
  3. soliciting, procuring, transferring, attempting to transfer, voting, or attempting to vote any proxy, consent, or authorization with respect to any voting rights in a state bank; or
  4. voting for a director, or serving or acting as a state bank-affiliated party.

IV. Effective Date

This prohibition order against Respondent Mary Christine Gonzales is effective April 30, 2003, pursuant to Texas Finance Code § 35.003(b)(3). Pursuant to Texas Finance Code § 35.003(c) Respondent may appeal this order by filing notice not later than the 20th day after the date on which this notice is delivered to Respondent.

V. Service

This Order Prohibiting Participation in the Affairs of a State Bank is served on Mary Christine Gonzales by certified mail, return receipt requested, and by first-class mail, to her address: P.O. Box 145, Bridge City, Texas 77611 on April 30, 2003.

Signed on this 30th day of April, 2003.

/s/ Randall S. James                                
Randall S. James
Banking Commissioner of the State of Texas