Dive brief:

  • Federal Savings Bank, a Chicago-based lender with $ 815 million in assets, must strengthen its risk management controls and improve its anti-money laundering and consumer compliance standards, in accordance with a agreement with the Office of the Comptroller of Currency (OCC), released Thursday. .
  • Former bank CEO Stephen Calk was convicted of bribery in July for applying for a post in the Trump administration as a reward for approving two high-risk loans totaling $ 16 million to the former President of the Trump campaign, Paul. Manafort. Manafort needed the loans to avoid foreclosure of several properties, the Justice Department said.
  • The deal did not mention Manafort or Calk by name, and did not detail any potential financial penalties for the bank. But the OCC asked the bank’s board to create a compliance committee made up mostly of directors not employed by the bank. The committee is to send a report to the OCC each month, updating regulators on the bank’s ongoing compliance efforts.

Dive overview:

Although the deal was made public on Thursday, the deal was made on October 29 – and signed by Calk’s brother John Calk, who took over as chairman and chief executive of the Federal Savings Bank.

John Calk told American Banker in an emailed statement on Thursday that the bank was “working in close collaboration with the [OCC] to upgrade our policies and procedures ”, and that“ the improvements have made and will make the bank even stronger ”.

To get the funds to Manafort and get around the rules restricting the limit on loans to a single borrower, Stephen Calk allowed the bank’s holding company to acquire part of the loans. Manafort appointed Calk to an economic advisory board associated with the Trump campaign, and then recommended Calk for a post in the administration.

Calk was convicted of one count of bribing financial institutions – punishable by up to 30 years in prison – and one count of conspiring to commit acts of bribery of financial institutions, which culminates in at five years. He is expected to be sentenced in January.