EXHIBIT 10.1
SUPERVISORY AGREEMENT
This Supervisory Agreement (Agreement) is made and is effective this
16th day of December, 2004 (Effective Date), by and between First Federal
Savings and Loan Association of Edwardsville, Edwardsville, Illinois OTS Docket
No. 05174 (First Federal or Association), a federally chartered stock savings
association, and the Office of Thrift Supervision (OTS), a bureau of the United
States Department of the Treasury, acting through its Southeast Regional
Director or his designee (Regional Director).
WHEREAS, the OTS is the primary federal regulatory of First Federal;
WHEREAS, based upon First Federal's August 9, 2004 Report of
Examination (Examination), the OTS is of the opinion that First Federal has
engaged in acts and practices that are considered to be unsafe and unsound;
WHEREAS, the OTS is of the opinion that grounds exist for the
initiation of an administrative proceeding against First Federal;
WHEREAS, the OTS is of the view that it is appropriate to take measures
intended to ensure that First Federal will (i) comply with all applicable laws
and regulations; and (ii) engage in safe and sound practices; and
WHEREAS, First Federal, acting through its Board of Directors (Board),
without admitting or denying that such grounds exist except those as to
jurisdiction, which are admitted, wishes to cooperate with the OTS and to
evidence the intent to: (i) comply with all applicable laws and regulations; and
(ii) engage in safe and sound practices.
NOW THEREFORE, in consideration of the above premises and the mutual
undertakings set forth herein, the parties hereto agree as follows:
Effective Anti-Money Laundering/Bank Secrecy Act (BSA) Compliance Program
1. The Board shall adopt an Anti-Money Laundering and BSA Compliance Program
(BSA Compliance Program) as follows:
a. Within sixty (60) days after the Effective Date of this Agreement, the
Board will review the December 19, 2002 Chief Executive Officer Letter
from OTS Managing Director Xxxxx Xxxxxxxx regarding the revised
Compliance Self Assessment Guide (CEO # 171) to determine the changes
that should be made to the Association's written compliance management
program to comply with the requirements of CEO # 171. Such changes
will be made within 90 days after the Effective Date of this
Agreement.
b. Within forty-five (45) days after the Effective Date of this
Agreement, the Board will review and revise Association's policies and
procedures governing compliance with the BSA Compliance Program to
ensure the Association complies with the requirements of the Bank
Secrecy Act, 31 U.S.C. ss. 5311 et seq., 31 C.F.R. Part 103, 12 C.F.R.
ss. 563.177, and 12 C.F.R. ss. 563.180(d). The BSA Compliance Program
will, at a minimum, require the accurate and timely completion of
Currency Transaction Reports; designate a member of management who
shall serve as the primary BSA officer and be responsible for
coordinating and monitoring the Association's day to day compliance
with its BSA Compliance Program; provide for annual independent
testing by a qualified third party with knowledge of BSA Laws and
Regulations; provide for First Federal personnel to receive
comprehensive training on BSA reporting requirements; include specific
policies and procedures to ensure that transactions structured to
evade or circumvent the BSA's requirements are detected and that a
Suspicious Activity Report is filed, as required by Section
563.180(d); and provide for a system of internal controls to ensure
the Association's ongoing compliance with the BSA Compliance Program,
the BSA, 12 C.F.R. Part 103, and 12 C.F.R. xx.xx. 563.177 and
563.180(d). First Federal will maintain adequate records to document
compliance with this provision and adherence to its BSA Compliance
Program.
c. Effective immediately, the Association shall ensure that all Currency
Transaction Reports (CTRs) are accurately completed and timely filed
with the appropriate agency by registered or certified mail with
return receipts requested.
Customer Identification Program/Office of Foreign Assets Control (OFAC) Policy
2. Within forty-five (45) days after the Effective Date of this Agreement, the
Board shall adopt and adhere to Customer Identification Program (CIP) and
OFAC policy and ensure that it:
a. contains specific requirements and procedures governing the
origination and establishment of new accounts;
b. establishes guidelines to be followed for verifying a customer's
identity;
c. requires verification of the identity of loan applicants;
d. requires Association employees to fully and accurately complete a CIP
worksheet; and
e. requires the customer's name to be checked against the OFAC list.
BSA/SAR Training
3. Within sixty (60) days after the Effective Date of this Agreement, the Board
shall develop, implement, and thereafter ensure the Association's adherence to a
comprehensive training program for all appropriate operational and supervisory
personnel to ensure their awareness of their responsibility for compliance with
the requirements of (i) the BSA Laws and Regulations, and (ii) the SAR
Regulations (BSA Training Program).
4. BSA Training Program should include strategies for mandatory attendance, the
frequency of training, procedures and timing for updating training programs and
materials including a thorough review of previously identified violations and
deficiencies, and the method for delivering training.
5. The Association shall maintain documentation of all BSA training attended by
its employees.
Flood Disaster Protection Act (FDPA)
6. Within sixty (60) days after the Effective Date of this Agreement, the Board
shall review and amend the Association's FDPA policies and procedures (FDPA
Policy) to ensure the Association fully complies with the FDPA and the OTS
regulations at 12 C.F.R. Part 572 (collectively, the FDPA Laws and Regulations).
The FDPA Policy shall establish a system to ensure that appropriate flood
insurance is obtained and maintained on all property securing a loan from the
Association, and that all flood determinations and notices are accurately and
timely completed and made.
7. Within sixty (60) days after the Effective Date of this Agreement, the Board
shall review all loans made on or after March 1, 2001, to ensure that all loans
subject to the FDPA Laws and Regulations fully comply with the requirements of
such laws and regulations. The Association shall promptly correct any
deficiencies or non-compliance with the FDPA Laws and Regulations. Management
shall prepare and provide to the Board a report detailing the results of the
Association's review (FDPA Report). The FDPA Report shall list all loans subject
to the FDPA Laws and Regulations, identify those loans with deficiencies or
otherwise found to be in non-compliance with the FDPA Laws and Regulations, and
specify the corrective action taken to remedy such deficiencies and
non-compliance. A copy of the FDPA Report and the Board minutes detailing the
Board's review shall be provided to the Regional Director within ten (10)
business days after the date of the Board meeting at which the FDPA Report is
reviewed.
Equal Credit Opportunity Act
8. Effective immediately, the Association shall comply with the requirements of
the Equal Credit Opportunity Act, 15 U.S.C. ss. 1691 et seq. (ECOA), by:
a. correctly identifying denied versus withdrawn applications and
providing all effectively denied applicants, as identified in 12
C.F.R. ss. 202.9, with adverse action notices; and
b. enhancing the Association's procedures to ensure the monitoring
information is completed based on visual observation or surname, when
needed, as required by 12 C.F.R. ss. 202.13(a)(1).
Nondiscrimination Requirements
9. Effective immediately, the Association shall have available to the public
clearly written, non-discriminatory loan underwriting standards. These standards
and the business practices implementing them shall be reviewed at least annually
to comply with the requirements of 12 C.F.R. ss.528.2a(b).
Bank Protection Act
10. Within thirty (30) days, and at least annually thereafter, the security
officer shall report to the Association's Board on the implementation,
administration, and effectiveness of the Association's security program as
required by 12 C.F.R. ss.568.4.
Board Compliance Committee
11. Within thirty (30) days of the Effective Date of this Agreement, the Board
shall appoint a committee (the Regulatory Compliance Committee) comprised of
three or more directors, the majority of whom shall be independent of
management, to monitor and coordinate the Association's compliance with the
provisions of this Agreement.
12. By February 28, 2005, and thereafter within thirty (30) days after the end
of each calendar quarter, the Regulatory Compliance Committee shall submit a
written progress report to the Board detailing the actions taken to comply with
each provision of this Agreement and the results of those actions (Regulatory
Compliance Report).
13. By March 31, 2005, and thereafter within sixty (60) days after the end of
each calendar quarter, the Board shall submit to the Regional Director: (i) a
copy of the Regulatory Compliance Report required by Paragraph 13 above, with
any additional comments made by the Board, and (ii) a written certification that
each director has reviewed the Regulatory Compliance Report.
Definitions
14. All technical words or terms used in this Agreement for which meanings are
not specified or otherwise provided by the provisions of this Agreement shall,
insofar as applicable, have meanings as defined in Chapter V of Title 12 of the
Code of Federal Regulations, the Home Owners' Loan Act (HOLA), the FDIA, OTS
Memoranda or other published OTS guidance. Any such technical words or terms
used in this Agreement and undefined in said Code of Federal Regulations, the
HOLA, the FDIA, or OTS Memoranda/guidance shall have meanings that are in
accordance with the best custom and usage in the savings and loan industry.
Successor, Statutes, Regulations, Guidance, Amendments
15. Reference in this Agreement to provisions of statutes, regulations, OTS
Memoranda, and other published regulatory guidance shall be deemed to include
references to all amendments to such provisions as have been made as of the
Effective Date and references to successor provisions as they become applicable.
No Violations Authorized; OTS Not Restricted
16. Nothing in this Agreement or the Stipulation shall be construed as: (a)
allowing the Association to violate any law, rule, regulation, or policy
statement to which it is subject, or (b) restricting or estopping the OTS from
taking any action(s) that it believes are appropriate in fulfilling the
responsibilities placed upon it by law including, without limitation, any type
of supervisory, enforcement or other action that the OTS determines to be
appropriate, arising out of matters described in the most recent Report of
Examination, or based on other matters.
Time Limits; Effect of Headings; Separability Clause; Stipulation Incorporated
17. Time limitations for compliance with the terms of this Agreement run from
the Effective Date, unless otherwise noted.
18. The section and paragraph headings herein are for convenience only and shall
not affect the construction hereof.
19. In case any provision in this Agreement is ruled to be invalid, illegal or
unenforceable by the decision of any court of competent jurisdiction, the
validity, legality and enforceability of the remaining provisions here shall not
in any way be affected or impaired thereby, unless the Regional Director in
his/her sole discretion determines otherwise.
Effective Date; Duration
20. This Agreement is and shall become effective on the date it is issued, i.e.,
the Effective Date as shown on the first page hereof. This Agreement shall
remain in effect until terminated, modified or suspended, in writing by the OTS,
acting through its Director, Regional Director or other authorized
representative.
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IN WITNESS WHEREOF, the OTS, acting by and through the Regional Director
and the Bank, in accordance with a duly adopted resolution of its Board, hereby
executes this Agreement as of the Effective Date.
OFFICE OF THRIFT SUPERVISION
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Xxxx X. Xxxx
Regional Director
Southeast Region
FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF EDWARDSVILLE
by a majority of its directors
By:
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxxx
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Xx. Xxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
