Regulators have ordered Sunwest Bank in Tustin, Calif., to improve its compliance with the Bank Secrecy Act.
Last week, the Federal Deposit Insurance Corp. disclosed the Jan. 21 consent order that it, along with the California Department of Financial Institutions, issued to the $617 million-asset bank. The order will hamstring the at-times aggressive acquirer from buying anything for now.
The order gives Sunwest 90 days to comply with all BSA rules and regulations and gives it 60 days to correct any violations that were found in the bank's 2009 and 2010 examinations. It also calls for the bank to review its staffing needs to make sure adequate resources are devoted to BSA compliance.
In an interview Monday, Glenn Gray, the bank's chief executive and one of American Banker's 2010 Community Banker of the Year recipients, said that the problems stem from the bank's suspicious activity reporting.
"Within our core bank, we were not completing our SARs as accurately as we should have been. We picked up three failed banks and as we were getting our arms around them we should have addressed BSA and made sure things were consistent across all four banks," Gray said. "We didn't do that and so the regulators were correct in finding errors that were out there."
Gray said the bank has or is in the process of upgrading its anti-money laundering software, improving employee training and tightening policies and procedures.
Unlike most consent orders of the last several years, Sunwest's doesn't include any capital requirements. The bank was exceedingly well capitalized at Dec. 31, with a total risk-based capital ratio of 17.53%.
The order, however, does prevent the bank from any further acquisitions — for either failed or traditional deals — so long as it is in place.
