Feds clamp down on Savings Bank of Maine
Federal regulators late last week accused Gardiner-based Savings Bank of Maine of engaging in "unsafe or unsound practices," including approving high-risk loans and operating with insufficient capital, and ordered the bank to fix several deficiencies.
The federal Office of Thrift Supervision on Thursday issued a cease-and-desist order to Savings Bank of Maine based on a close examination of the bank in March. The OTS found several violations, including operating with insufficient capital, the failure to establish "prudent internal controls" and implement "security measures relating to electronic operations." The OTS also said the bank violated regulations that require the adoption and compliance of "prudent written real estate lending standards."
Savings Bank of Maine President Arthur Markos told the Kennebec Journal that the bank's branches will continue to operate as usual. He said the bank has worked with the OTS for some time and has "already taken a number of steps" to address the violations contained in the order. Markos said one change will be to refocus on home mortgages. "We're confident we're going to come through this just fine," he told the paper.
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