Quaint Oak Bancorp in Southampton, Pa., is working through a regulatory order.
The company disclosed in a regulatory filing that its bank agreed to consent agreements with the Federal Deposit Insurance Corp. and Pennsylvania’s Department of Banking and Securities, Bureau of Bank Supervision tied to its compliance with the Bank Secrecy Act.
The orders followed an on-site examination that began on Feb. 20, 2024. Quaint Oak said it believes the orders’ provisions provide guidance for the safe and sound expansion of the the bank’s correspondent banking business.
The board is required to enhance compliance with BSA and anti-money laundering laws and regulations, including developing and implementing written policies and procedures. The bank must adopt a third-party risk management program and conduct independent testing of its AML program, among other things.
Quaint Oak noted in the filing that it has already created a financial crime management department and hired an AML officer. The bank also conducted a comprehensive review of its AML policies, which it then revised and enhanced. It has also enhanced training and improved its policies for handing third-party risk management.
Since the exam was completed, the bank “has added significant resources to its compliance and control functions and the bank is continuing to allocate resources to enhance its compliance management system and controls,” the filing said.