Fed order cites operations, BSA compliance deficiencies at KS bank

A slew of operations and other deficiencies, including deficiencies in compliance with anti-money laundering requirements, are enumerated in a Sept. 1 cease-and-desist consent order with Gardner Bancshares Inc. and its subsidiary Small Business Bank (both of Lenexa, Kan.), and announced Tuesday by the Federal Reserve Board.

The Fed order says the most recent examination (last Oct. 31) of the bank identified “staffing, internal controls, credit risk management, lending and credit administration, capital, information technology and information security, books and records, regulatory reporting, liquidity and funds management, earnings, interest rate risk management, third party risk management, and other operations deficiencies.”

That exam, by the Federal Reserve Bank of Kansas City and the Kansas Office of the State Bank Commissioner, also identified deficiencies in the bank’s risk management and compliance with federal laws, rules, and regulations relating to anti-money laundering compliance, including the Bank Secrecy Act and Treasury’s implementing BSA rules, the order states.

According to the order, the boards of Gardner Bancshares and Small Business Bank have 60 days to submit a written plan to the Reserve Bank to strengthen board oversight of the management and operations of the bank.

Federal Reserve Board issues enforcement action with Gardner Bancshares, Inc. and Small Business Bank