NWSB released from special federal oversite provisions

The FDIC is no longer looking over Northwest Savings Bank’s shoulder.

Informal oversight of the bank’s compliance management system has ended.

The oversight dates back to a 2011 consent order under which the Federal Deposit Insurance Corporation (FDIC) required improvements to the bank’s compliance policies and practices. FDIC formally monitored Northwest’s adherence to the consent agreement until July 2012 when FDIC terminated the agreement.

As part of that consent order, the bank, without admitting any wrongdoing, agreed to pay a $325,000 fine and up to $375,000 in restitution.

Northwest was required to develop and implement a compliance management system approved by FDIC, retain a qualified compliance officer, maintain a compliance audit function to include policies, procedures, process, and staff, adopt and maintain a system to ensure proper management of third-party risk, and several other practices and procedures to avert future problems.

The compliance management staff was increased by about 20 as part of that fix.

The agreement was canceled, but the monitoring – “an informal regulatory understanding,” according to a Northwest press release issued at the time – went on.

According to a Friday, Nov. 22 press release from Northwest President and CEO William Wagner, “… Northwest Savings Bank announced today that the bank’s primary federal regulator has terminated its existing informal agreement with the bank related to strengthening various components of the bank’s regulatory compliance management system.”

Northwest officials said they are prohibited by FDIC from commenting further on the situation.