The Federal Reserve released Bank of New York Mellon (BK) from a regulatory action requiring it to tighten up its internal controls.
The cease-and-desist order, issued last year, required the bank to improve its processes for detecting and communicating problems to its regulators. It was terminated on Oct. 16, the regulator announced.
The order related to a loan BNY Mellon received from the Federal Reserve Bank of Boston in September 2008. A portion of the collateral that BNY Mellon posted was ineligible under the terms of the loan agreement, a violation that allowed the bank to receive a larger loan than it should have received, the order states. The bank then failed to report the problems with the collateral to the Boston Fed, according to the order.
BNY Mellon also paid a $6 million civil penalty over the alleged violations, without admitting or denying the allegations. It repaid the loan in question in 2010, the Fed said.