- Federal Savings Bank, an $815 million-asset Chicago-based lender must boost its risk management controls and improve its anti-money laundering and consumer compliance standards, in line with an agreement with the Office of the Comptroller of Currency (OCC), published Thursday.
- The bank's former CEO, Stephen Calk, was convicted of bribery in July for soliciting a position in the Trump administration as a reward for approving two high-risk loans totaling $16 million to former Trump campaign chair Paul Manafort. Manafort needed the loans to avoid foreclosure on multiple properties, the Justice Department said.
- The agreement did not mention Manafort or Calk by name, nor did it detail any potential financial penalty for the bank. But the OCC demanded the bank's board create a compliance committee composed predominately of directors not employed by the bank. The committee must send a report to the OCC each month, updating regulators on the bank's ongoing compliance efforts.
Although the agreement was made public Thursday, the deal was struck Oct. 29 — and signed by Calk's brother, John Calk, who took over as Federal Savings Bank's chairman and CEO.
John Calk told American Banker in an emailed statement Thursday the bank is “working closely with the [OCC] to upgrade our policies and procedures," and that "enhancements have and will make the bank even stronger."
To get the funds to Manafort and skirt rules restricting the limit on loans to a single borrower, Stephen Calk authorized the bank’s holding company to acquire some of the loans. Manafort appointed Calk to an economic advisory committee associated with the Trump campaign, and later recommended Calk for a position within the administration.
Calk was found guilty on one count of financial institution bribery — which carries a maximum sentence of 30 years in prison — and one count of conspiracy to commit financial institution bribery, which tops out at five years. He is scheduled to be sentenced in January.