OCC Takes Action against Tech Firm Jack Henry, Frees Six Banks

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The Office of the Comptroller of the Currency has taken disciplinary action against the banking software provider Jack Henry & Associates for failing to get a processing center damaged by Hurricane Sandy up and running in a timely manner.

In addition, the regulator released six banks from enforcement actions and modified the orders against three others, it announced Friday in the monthly roundup of its enforcement actions.

The Monett, Mo.-based Jack Henry, which provides core-processing services for community banks, entered a formal agreement with the OCC on Dec. 4.

The order relates to a Jack Henry processing center in Lyndhurst, N.J., that was damaged in Hurricane Sandy, which struck the East Coast in October 2012. Though Jack Henry spent an "extended" period getting the center back into operation after the storm, the timing "did not meet our expectations, those of our customers or those of the regulators," Jack Henry Chief Executive Jack Prim said in an interview Friday.

Prim said the formal agreement requires the company to review its disaster-preparation plans, and to improve the internal systems and operations at the Lyndhurst facility. The OCC has not yet published the order online, and a call to the regulator seeking further details was not immediately returned.

The Lyndhurst facility has been repaired and is fully operational, with improved technological infrastructure, Prim said.

"We took the problem very seriously, we've implemented many changes and we're quite confident that we will not experience an event like this in the future," said Prim.

In addition to the order against Jack Henry, the OCC modified cease-and-desist orders with three lenders: Broadway Federal Bank in Los Angeles; Landmark Community Bank in Isanti, Minn.; and Liberty FSB in Enid, Okla.

The regulator also freed six banks from regulatory orders: United Bank in Springdale, Ark.; Tomatobank in Diamond Bar, Calif.; Santa Clara Valley Bank in Santa Paula, Calif.; Lafayette Savings Bank in Indiana; Lincoln FSB in Nebraska; and the First National Bank of Mercersburg in Pennsylvania.

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