CU Bancorp in Los Angeles has agreed to a consent order to address deficiencies in its Bank Secrecy Act and anti-money laundering compliance program.
The $2.7 billion-asset bank disclosed in a regulatory filing Tuesday that its bank had recently entered into the consent order with the Federal Deposit Insurance Corp. and the California Department of Business Oversight. Under the terms of the order, the bank must produce a written plan detailing actions required to correct compliance weaknesses, including a review of staffing needs, enhancing internal controls and creating a testing program.
The order also requires the bank to adopt measures to step up board supervision, notify regulators before appointing a new BSA officer and obtain regulatory consent for any expansion plans, including new branches, products and services.
The company said it expects annual expenses to rise by $1.1 million due to increased staffing. Management also expects $2 million in one-time costs during the third and fourth quarters tied to using consultants to review internal improvements, among other things.
CU Bancorp's management and board "have expressed their full intention to comply with all parts of the consent order at the earliest possible date," the filing said. The company said it had already implemented "numerous" corrective actions to strengthen compliance before receiving the order, including staffing increases that began near the end of the second quarter.