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UNITED STATES OF AMERICABEFORETHE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEMWASHINGTON, D.C.In the Matter of ASIAN FINANCIAL CORPORATIONPhiladelphia, PennsylvaniaandASIAN BANKPhiladelphia, PennsylvaniaDocket

Nos.

05-33-B-HC05-33-B-SMCease and Desist Order Issued on ConsentPursuant to the Federal Deposit InsuranceAct, as amendedWHEREAS, in recognition of their common goal to restore and maintain the financialsoundness of Asian Financial Corporation, Philadelphia, Pennsylvania ("Asian Financial"), aregistered bank holding company, and its subsidiary bank, Asian Bank, Philadelphia,Pennsylvania (the "Bank"), a state chartered bank that is a member of the Federal ReserveSystem, the Board of Governors of the Federal Reserve System (the "Board of Governors"),Asian Financial, and the Bank have mutually agreed to enter into this consent Cease and DesistOrder (the "Order");WHEREAS, on February 28, 2006 the boards of directors of Asian Financialand the Bank, at duly constituted meetings, adopted resolutions authorizing and directing

MARC S. WINKLER

to enter into this Order on behalf of Asian Financial and theBank, and consenting to compliance with each and every applicable provision of this Order byAsian Financial, the Bank, and their institution-affiliated parties, as defined in sections 3(u) and8(b)(3) of the Federal Deposit Insurance Act as amended (12 U.S.C. 1813(u) and 1818(b)(3))(the "FDI Act") and waiving any and all rights that Asian Financial and the Bank may have

pursuant to section 8 of the FDI Act (12 U.S.C. 1818) to: (i) a hearing for the purpose of takingevidence on any matters set forth in this Order; (ii) judicial review of this Order; (iii) contest theissuance of this Order by the Board of Governors pursuant to section 8 of the FDI Act; and(iv) challenge or contest, in any manner, the basis, issuance, validity, terms, effectiveness orenforceability of this Order or any provisions

hereof.

NOW, THEREFORE, IT IS HEREBY ORDERED that, pursuant to sections 8(b)(1) and(3) of the FDI Act, Asian Financial, the Bank, and their institution-affiliated parties shall ceaseand desist and take affirmative action as follows:

Management Review

1. (a) Within 30 days of

this

Order, the Bank's board of directors shall retain anindependent consultant (the "Management Consultant") acceptable to the Reserve Bank toconduct a review of the functions and performance of the Bank's officers (the "ManagementReview"), and prepare a written report of findings and recommendations (the "ManagementConsultant's Report") to the Bank's board of directors. The primary purpose of the ManagementReview shall be to aid in the development of

management structure suitable to the Bank'sneeds that is adequately staffed by qualified and trained personnel. The Management Reviewshall, at a minimum, address, consider, and include:(i) The identification of the type and number of officers needed tomanage and supervise adequately the affairs of the Bank;(ii) an evaluation of each officer to determine whether the individualpossesses the ability, experience, and other qualifications required to perform competentlypresent and anticipated duties, including the ability to adhere to applicable laws and regulations

Page 2

and the Bank's established policies and procedures, restore and maintain the Bank to a safe andsound condition, and comply with the requirements of this Order; and(iii) a plan to recruit, hire, or appoint additional or replacementpersonnel with the requisite ability, experience, and other qualifications required to performcompetently their assigned duties.(b) Within 10 days of

the

engagement of the Management Consultant, butprior to the commencement of the Management Review, the Bank shall submit to the ReserveBank for approval an engagement letter that sets forth the scope of the Management Review andthe date of submission of the Management Consultant's Report, which shall not exceed 90 daysfrom the date of the Reserve Bank's approval of the engagement letter.(c) The Bank shall forward a copy of the Management Consultant's Report tothe Reserve Bank at the same time that it is provided to the Bank.(d) Within 30 days of the Bank's receipt of the Management Consultant'sReport, the Bank shall submit to the Reserve Bank a written management plan that fullyaddresses the findings and recommendations in the Management Consultant's Report anddescribes the specific actions that the Bank's board of directors proposes to take in order tostrengthen the Bank's management and to provide for management succession.

(a) In appointing any new officers or directors, Asian Financial and the Bank shall comply with the notice provisions of section 32 of the FDI Act (12 U.S.C. 1831i) andSubpart H of Regulation Y of the Board of Governors of the Federal Reserve System.(b) Asian Financial and the Bank shall comply with the restrictions onindemnification and severance payments of section 18(k) of

the

FDI Act (12 U.S.C. 1828) andPart 359 of the Federal Deposit Insurance Corporation's regulations (12 C.F.R. Part 359).

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US Federal Reserve: enf20060308a1

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