Citing impairment of confidence in banks, agency bars former CEO (and Trump adviser) from serving at financial institutions

A former bank chief executive and economic adviser to presidential candidate Donald Trump has been prohibited from working at a financial institution because his employment may impair public confidence in the bank’s integrity, the federal regulator of national banks said Friday.

In its release of enforcement and termination actions taken in May, the Office of the Comptroller of the Currency (OCC) said it ordered the prohibition against Stephen M. Calk, former chief executive officer and board chairman of the Federal Savings Bank, FSB, Chicago. Calk also served as an economic adviser to Trump during his 2016 presidential campaign. Calk was indicted in May by a federal grand jury on allegations of bank bribery which also allegedly resulted in a multi-million-dollar loss to the bank, the agency said.

According to the OCC, Calk was indicted May 21 in the U.S. District Court for the southern district of New York on a felony charge which alleged receipt of commissions or gifts for procuring loans (which the OCC described as “bank bribery”). The regulator said Calk has been charged with a crime involving dishonesty and breach of trust punishable by imprisonment for a term exceeding one year under federal law.

The OCC said the indictment against Calk alleges corrupt use of his position at the bank to issue $16 million in high-risk loans to a borrower in exchange for a personal benefit. The indictment, the OCC said, alleges that Calk expected that, in return for the loans, he would gain assistance in obtaining a position in the Trump administration. (The borrower, according to press reports, was allegedly former Trump campaign manager Paul Manafort, who is now serving a federal prison sentence after a conviction on other charges.)

In its prohibition, the OCC said that the indictmentagainst Calkfor bank bribery “in connection with loan transactions, the negative publicity created by the pending criminal action, the serious nature of the charges contained in the Indictment, the fact that such charges involve dishonesty and breach of trust, and the management and oversight positions Respondent formerly held as an officer and director of the Bank, threaten to impair public confidence in the integrity of the Bank.”

The OCC said, in particular, for those members of the public who transact business with the bank, “these circumstances threaten to impair their confidence that the transactions will be conducted lawfully and fairly by the Bank.” For bank depositors, the regulator said“these circumstances threaten to impair their confidence that their deposits will be used by the Bank for lawful and fair transactions.”

The regulator pointedly noted (in bold-faced type and selected use of all capital letters) that the prohibition not only includes Calk’s former bank but “additionally PROHIBITS the Respondent from participation in any manner in the conduct of the affairs of any depository institution, EFFECTIVE IMMEDIATELY.”

Notice of prohibition: Stephen M. Calk, The Federal Savings Bank, Chicago