Bank Failures Cost $88 Billion While U.S. Enforces in the Dark

Using a secret enforcement tool, federal regulators in 2005 tried to limit the growth of Vineyard Bank, which was making commercial real estate loans in Southern California at almost double the rate of its peers.

The limit was a secret even to new regulators who took over the bank’s supervision in 2006 and never found out about it, according to a report prepared by the U.S. Treasury Department’s Office of Inspector General in July 2010. Vineyard, based in Corona, California, kept growing.