Federal regulators have fined Colombo Bank of Rockville, Md., $10,000 for alleged violations to the Bank Secrecy Act and ordered it to strengthen its anti-money-laundering policies and procedures.
The Office of Thrift Supervision issued the cease-and-desist order and the civil money penalty at the end of August and made its enforcement action public this week. The order also requires the $109 million-asset Colombo to correct its deficiencies in complying with mortgage lending laws, including "repetitive violations" of the Home Mortgage Disclosure Act.
The order will probably end any hope Colombo may have had to acquire Washington's Independence Federal Savings Bank. Colombo has been trying to buy the $195 million-asset Independence for more than a year and has received OTS approval to pursue a deal. But it got that approval under the condition that Colombo's finances remain healthy.
Independence has shown no interest in selling to Colombo, whose primary owner, Morton Bender, owns a 21% stake in Independence.
It announced in March that it would be sold to Carver Bancorp Inc. of New York for $33 million. That deal is now in danger of collapsing; Carver said in September that it was no longer willing to pay $21 a share in light of Independence's deteriorated financial condition.
