FED slams Mid-America Bank over compliance
DIXON, MISSOURI – Mid-America Bank was excoriated in a written agreement with the Federal Reserve in early June for control and compliance failures across a wide range of areas. The bank has been asked to substantially improve its credit risk management programme, including loan underwriting, documentation and administration. It must also substantially bolster its internal control and management information system, internal audit function and its conflict-of-interest policy.
The document, available on the Federal Reserve's website, is comprehensive in its analysis of the weaknesses of Mid-America Bank's control failures. For example, the bank is being asked to develop a programme for the separation of duties among the lending, credit administration and loan operations functions. It also has to put in place an accurate watch list and an effective independent loan review programme. The enforcement action comes on the heels of an examination that found deficiencies in the firm's credit business.
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