FDIC Pushes Doral in Puerto Rico to Submit New Capital Plan

Doral Financial in San Juan, Puerto Rico, has resubmitted its capital restoration plan to the Federal Deposit Insurance Corp. after the agency determined that the initial plan was insufficient.

Doral disclosed in a regulatory filing Friday that the FDIC, in a Dec. 8 letter, had requested "more specificity" in the $8 billion-asset company's written contingency plan even though the agency acknowledged that the plan appeared to comply with an August 2012 consent order.

As a result, Doral refiled its capital plan on Dec. 10. The updated plan is designed to let Doral seek to maximize the value of its assets on behalf of their shareholders, including the pursuit of all claims against the Puerto Rican government of Puerto Rico, and to minimize the risk of any loss to the Deposit Insurance Fund. "The updated plan covers potential actions that will require the support of the FDIC," the filing said.

In addition to the consent order, Doral is operating under two prompt corrective actions from the FDIC.

Doral was listed as "significantly undercapitalized" after the Puerto Rican Treasury Department rejected the company's claim to a $230 million tax refund. The FDIC decided that Doral couldn't count the money as part of its Tier 1 capital, putting it in violation of the consent order and requiring it to improve its capital levels.

The company has been selling assets, including a health care lending division, to boost capital levels. It also recently won a key legal victory with a Puerto Rican court ruling that the government must pay the tax refund. However, the territory's Treasury Department has vowed to appeal the decision.