Young Il Kim v. Office of Thrift Supervision

A former bank officer petitions for review of an order issued by an administrative agency that forever bans him from working in the American banking industry. For the reasons which follow we grant the petition and vacate the order.

FACTS AND PRIOR PROCEEDINGS

Delta Savings Bank (“Delta”) was a minority-owned, state-licensed savings and loan institution catering to the immigrant Asian community (i.e., principally Korean and Vietnamese families) in Southern California. Prior to September 1989, Delta had been an unprofitable bank: It had regularly reported losses of approximately $100,000 per month, and had failed to meet its minimum regulatory capital requirements since at least March 31, 1988.

On September 15, 1989, a group of local businessmen invested some $2.6 million of new capital in Delta and, two weeks later, took over the bank when their application for change of control was approved by the federal government. One of these investors, Young II Kim (“Kim”), who initially put up $500,000 of his own money to acquire some of Delta’s stock, became the bank’s President and Chief Executive Officer. Yun Suk Seo (“Seo”), another investor, was elected Delta’s Chairman of the Board.…