Sterling Bancorp enters consent order with OCC

Sterling Bancorp, the thrift holding company for Sterling Bank and Trust, F.S.B., Southfield, Michigan, announced that the bank has entered into a consent order with the Office of the Comptroller of the Currency, or OCC, dated September 27, resolving the OCC's formal investigation relating to the bank's former residential loan product, marketed as the Advantage Loan Program, and related matters. Under the consent order, the bank has agreed to pay a civil money penalty of $6M. The civil money penalty will be applied against the previously accrued liability for contingent losses reflected on the company's consolidated balance sheet, which amounted to $15M as of June 30. The consent order represents a full and final settlement of the OCC's investigation with respect to the bank. Concurrent with the consent order, the OCC notified the bank that the formal agreement between the bank and the OCC entered on June 18, 2019, has been terminated. The OCC agreement primarily related to certain aspects of the bank's Bank Secrecy Act/Anti-Money Laundering compliance program and the bank's credit administration. "Today's announcement from the OCC represents a painful resolution of the long running regulatory fallout from the ill-fated Advantage Loan Program. The level of cooperation that we have provided and the comprehensive internal investigation have been critical to our building a reputation with our regulators that had been absent previously. In my tenure as CEO, the board of directors, management and staff have placed this extensive cooperation along with the remediation of all of the critical findings in the OCC Agreement and elsewhere as our primary focus. Our commitment and the ultimate success are evidenced by the termination of the OCC Agreement. As regulatory enforcement orders go, our remediation was all accomplished in very quick order especially given the severity of the findings and rebuilding required. I feel it is recognition of the extraordinary efforts by the entire Sterling team. The $6 million civil money penalty, while significant, is a clear reflection of our extraordinary cooperation and remediation efforts and represents another significant milestone in putting these legacy issues behind us. Notwithstanding these achievements and as noted above, we remain engaged with the DOJ on the criminal aspects arising from the Advantage Loan Program. At this point in time, we have no visibility into the potential terms or timing of any settlement with the DOJ. We will continue to provide full cooperation and hope resolution with Sterling will be forthcoming. Both the Bank and the Company remain eager to put this entire episode behind them as expeditiously as possible. It is, however, possible that the issues surrounding multiple individuals regarding their involvement with the fraud will continue well into the future," said Thomas O'Brien, Chairman, President and CEO.