Fed files enforcement action against Weststar Financial Services Corp., which operates the Bank of Asheville

Jason Sandford

Jason Sandford is a reporter, writer, blogger and photographer interested in all things Asheville.

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The latest from nasdaq.com:

The U.S. Federal Reserve has filed an enforcement action against Weststar Financial Services Corp. of Asheville, N.C., the regulator said Tuesday.

The action bars Weststar from declaring or making dividend payments without the Fed’s prior written approval. It also prohibits Weststar, which operates The Bank of Asheville, from incurring new debt without Fed approval.

 The Bank of Asheville has some rough sledding this year, and the Asheville Citizen-Times‘ Mark Barrett has done some excellent reporting about it. Here’s just a snippet of what Barrett reported about the bank back in September:

Officials with the 55- employee bank said last month that it was writing off $14.5 million in bad loans, about three-fourths of which were for real estate, and reported second-quarter losses of $6.50 a share.

Both its president and chairman of the board have resigned over the past three months, and the stock price of the bank’s parent company has dropped to pennies a share.

And a federal lawsuit alleges the bank mishandled a $4.25 million account, improperly allowing it to be drained.

We’ll keep on eye on this story as it continues to develop.

ABC News has a story here.