An enforcement order signed in July 2015 with OSB Community Bank (Brooklyn, Mich.), a state-chartered bank with membership in the Federal Reserve System, was terminated on Aug. 30, the Federal Reserve Board announced Tuesday.
OSB Community Bank, the Federal Reserve Bank of Chicago and the Michigan Department of Insurance and Financial Services were parties to the consent order. The 14-page order called for a strengthening in board oversight of bank management and operations as well as improvements in, among other things, management adherence to approved policies and procedures, applicable laws and regulations; monitoring of exceptions to approved policies and procedures; improved information and reporting in areas such as credit risk management, lending and credit administration, adversely classified assets, allowance for loan and lease losses (“ALLL”), capital, and earnings.
The order barred the extension, renewal or restructuring of credit for any borrower, including loans or other extensions flagged in the bank’s December 2014 exam report, without prior approval of a majority of the full board or a designated committee; required improvements in the management of assets, including other real estate owned (OREO); required charge-offs of assets classified as “loss” in exam reports; required review and revision of the bank’s ALLL methodology consistent with relevant supervisory guidance; and more.
The order also directed improvements to the bank’s management information systems “to ensure that senior management and the full board of directors obtain timely and accurate information regarding the condition of the Bank’s loan portfolio,” the order states.