Thursday, November 18, 2021

Chicago bank with Manafort ties hit with reg order

Federal Savings Bank in Chicago has been ordered to address its risk management, consumer compliance and anti-money laundering protocols. 

The Oct. 29 formal agreement with the Office of the Comptroller of the Currency came three months after Stephen Calk, the $815 million-asset bank’s former CEO, was convicted of bribery tied to loans made to Paul Manafort.

The bank, now led by John Calk, Calk’s brother, must form a compliance committee comprised mostly of outside directors. The committee will have to file monthly reports detailing progress addressing the OCC’s concerns. 

Federal Savings was required to form a risk management system that includes independent reviews and internal audits. It must also develop a program to make sure it complies with consumer protection rules.

The bank was also required to overhaul its compliance with the Bank Secrecy Act and anti-money-laundering laws. 

The OCC agreement did not mention Manafort or Stephen Calk. 

Stephen Calk was banned from the banking industry in 2019. The former banker, who faces a maximum sentence of 30 years, is scheduled to be sentenced in February.

Federal Savings, during and shortly after the 2016 presidential campaign, made two loans to Manafort that totaled $16 million. It was alleged that Calk approved the loans as part of an unsuccessful effort to land a senior role in the Trump administration.

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