Savings bank

The Federal Savings Bank, whose former CEO was convicted of a ploy to get Trump’s appointment, has curbed its “unhealthy” practices

Federal Savings Bank of Chicago, the mortgage lender who convicted former CEO Stephen Calk of trying to capitalize on an unsuccessful shot at a Trump administration post, agreed to tighter oversight after regulators found “Unsafe or misguided practices”.

The Office of the Comptroller of the Currency, which oversees federally chartered banks, asks the bank’s board of directors to form a three-member compliance committee to adopt and implement “corrective measures” related to the management of the bank. risks, consumer compliance and banking secrecy.

The agreement, dated October 29, was posted online Thursday by the OCC. Federal Savings Bank’s new actions include creating an internal audit plan, appointing a consumer compliance officer, and improving procedures to prevent money laundering and other suspicious activity . The bank must submit a progress report to regulators within 120 days.

In July, Calk, 57, was convicted in New York federal court of bribing financial institutions for granting high-risk loans to former Trump campaign chairman Paul Manafort in the hope of get a management position within the administration. Calk faces up to 30 years in prison, with the sentence scheduled for January 10.

The scheme began in July 2016 when Calk, founder and then CEO of Federal Savings Bank, proposed to grant Manafort $ 16 million in “urgently needed” loans to avoid the foreclosure of several properties, according to the deed. charge. The loans were issued despite “significant red flags” over Manafort’s ability to repay debt, prosecutors said.

While the loans were pending approval, Calk submitted a ranked list of government positions he wanted, starting with Secretary of the Treasury and working down to 19 ambassadors, according to the indictment.

Manafort appointed Calk to a post of economic adviser with the Trump campaign and recommended him for a post in the administration following Trump’s election in November 2016. In early January 2017, Calk was interviewed for the post of deputy. secretary of the military, “due to (Manafort) efforts,” but did not land the job, prosecutors said.

Manafort was convicted in 2018 on several counts of bank and tax fraud but was pardoned by Trump in December 2020.

The Chicago-based Federal Savings Bank, which bills itself as one of the largest veteran-owned banks in America, focuses on mortgages, with offices in Lake Forest and Chicago. Stephen Calk’s brother John Calk took on the role of CEO and Chairman in 2019.

“As the Federal Savings Bank continues to experience significant business growth, we have worked closely with the Office of the Comptroller of the Currency to upgrade our policies and procedures,” John Calk said in an emailed statement. . “These improvements have made and will make the bank even stronger as we help our clients realize the American dream of homeownership. “

Federal prosecutors said Stephen Calk owned 67% of the bank’s holding company from July 2016 to January 2017, the period under investigation. A spokeswoman for the bank did not respond to a request on Friday to disclose its current stake.

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