American Savings fined over loan rule violations
American Savings Bank said yesterday it will pay a fine and has modified its loan policies in the wake of two cease-and-desist orders from federal regulators for failure to comply with flood insurance laws and disclosure regulations.
The orders were issued by the U.S. Office of Thrift Supervision on Wednesday, the bank's parent company, Hawaiian Electric Industries Inc., said in a filing with the U.S. Securities and Exchange Commission yesterday.
One order requires the bank to pay $37,730 and improve its compliance policies after it failed to comply with flood insurance coverage and notification rules involving 98 loans.
The other concerns compliance with the federal Bank Secrecy Act anti-money laundering provisions. Bank Secrecy Act regulations were tightened after the Sept. 11, 2001, attacks; they now require financial institutions to monitor and report transactions of $10,000 or more.
Senior Executive Vice President and COO Tim Schools said that the federal office recommended that the bank increase staffing and training in compliance and risk management, establish of a compliance committee, and enhance policies and procedures to reflect current practices and regulatory requirements.
"American Savings Bank has already added more resources, staffing and training as part of its ongoing efforts to strengthen its compliance and risk management area," Schools said. "We know that the banking industry as a whole is being increasingly scrutinized for compliance, particularly under the Bank Secrecy Act and significantly tightened post-9/11 measures."