lonial BancGroup Inc., headquartered in Montgomery, Ala., has consented to a cease-and-desist order issued by the Federal Reserve's board of governors and the Alabama State Banking Department. According to a company statement, the order became effective July 22. Similar to the regulatory order issued to Colonial by the Federal Deposit Insurance Corp. and the Alabama regulator, the Federal Reserve order addresses the issues of capital, liquidity and allowance for loan losses. The order also requires that Colonial obtain the prior written approval of the Federal Reserve and the Alabama State Banking Department before declaring or paying any dividends or making any distributions of interest or principal on subordinated debentures or trust preferred securities. In March, Colonial agreed to a $300 million equity investment from a group of investors led by Taylor, Bean & Whitaker Mortgage Corp. According to the company's statement on the Federal Reserve order, that agreement has failed to close. SOURCES: Colonial Ba