Document:

Consent Order to Cease and Desist for Affirmative Relief

 Exhibit 10.1(a) 
 UNITED STATES OF AMERICA 
 Before The 
 OFFICE OF THRIFT SUPERVISION 
  

					
	In the Matter of	  	)	  	Order No.:WE-08-002
		  	)	  	
	AMERICAN SAVINGS BANK, F.S.B.,	  	)	  	Effective Date: January 23, 2008
	Honolulu, Hawaii.	  	)	  	
		  	)	  	
	OTS Docket No.: 08384	  	)	  	
		  	)	  	

 CONSENT ORDER TO 
 CEASE AND DESIST FOR AFFIRMATIVE RELIEF 
 WHEREAS, American
Savings Bank, F.S.B., Honolulu, Hawaii, OTS Docket No. 08384 (Institution), has executed a Stipulation and Consent to the Issuance of an Order to Cease and Desist for Affirmative Relief (Stipulation); and 
 WHEREAS, the Institution, by executing the Stipulation, has consented to the issuance of this Consent Order to Cease and Desist for Affirmative
Relief (Order) by the Office of Thrift Supervision (OTS), pursuant to 12 U.S.C. § 1818(b) and 
 WHEREAS, the Director of the OTS
has delegated to the Regional Directors of the OTS the authority to issue consent orders on behalf of the OTS pursuant to provisions of 12 U.S.C. § 1818. 
 NOW, THEREFORE, IT IS ORDERED THAT: 
 I. ORDER TO CEASE AND DESIST 
 The Institution and its directors, officers, employees, and agents shall cease and desist from any action (alone or with another or others) for or toward
causing, bringing about, participating in, counseling, or aiding and abetting any violation of: 

 A. The Currency and Foreign Transactions Reporting Act (the Bank Secrecy Act or BSA), 31 U.S.C.
§§ 5311 et seq., and the related BSA regulations issued by the United States Department of the Treasury, 31 C.F.R. Part 103, and the OTS, 12 C.F.R. § 563.177; 
 B. The OTS regulations governing suspicious activity reports (SARs) set forth in 12 C.F.R. § 563.180 (the SAR Regulation); 
 C. The Truth in Lending Act, 15 U.S.C. § 1601 et seq., 12 C.F.R. Part 226 (Regulation Z) (TILA); 
 D. The Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq., 24 C.F. R. Part 3500 (Regulation X) (RESPA); 
 E. The Home Mortgage Disclosure Act, 12 U.S.C. § 2801 et seq., 12 C.F.R. Part 203 (Regulation C) (HMDA); and 
 F. The Flood Disaster Protection Act, 42 U.S.C. § 4001 et seq., 12 C.F.R. Part 572 (FDPA). 
 II. BANK SECRECY ACT/ANTI-MONEY LAUNDERING (BSA/AML) 
 The Institution shall take the following steps to strengthen its BSA/AML Program: 
 A. Within thirty
(30) days of the effective date of this Order, the Institution shall provide OTS with a plan for enhancement of the Institution’s BSA/AML Program for review and comment by the OTS (BSA/AML Program Plan). The Institution shall revise the
BSA/AML Program Plan within fifteen (15) days of receiving comments by the OTS. The BSA/AML Program Plan, as modified by the comments of the OTS, shall be subject to this Order and any deviation from this Plan shall be a violation of the Order.

 B. Within ninety (90) days of the effective date of this Order, the Institution shall take the following steps to improve its BSA/AML
Program: 
  

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 1. Developing written customer due diligence and enhanced due diligence procedures based on business
line, customer and product risk-scoring and incorporating those procedures into the Institution’s customer identification program; 
 2.
Enhancing the Institution’s BSA/AML risk assessment and establishing a process for reviewing and updating the assessment to reflect changes made to the program as a result of the ongoing remediation process; 
 3. Developing written policies and procedures for tracking and monitoring internal incident reports, investigations and Suspicious Activity Report
filings, including applicable document retention requirements; 
 4. Developing specific and unambiguous accountabilities for the
Institution’s BSA officer and for all staff and officers with BSA/AML responsibility; and 
 5. Developing specific training programs
for all staff and officers with BSA/AML responsibility and the internal audit department and other units that may audit or otherwise review the Institution’s BSA/AML program. 
 III. COMPLIANCE MANAGEMENT 
 The Institution shall take the following steps to strengthen its Compliance Management Program: 
 A. Within thirty (30) days of
the effective date of this Order, the Institution shall provide OTS with plans for enhancement of the Institution’s Compliance Management and Internal Audit Programs for review and comment by the OTS (Compliance Management and Internal Audit
Program Plans). The Institution shall revise the Compliance Management and Internal Audit Program Plans within thirty (30) days of receiving comments by the OTS. The Compliance Management and Internal Audit Program Plans, as modified by the

  

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comments of the OTS, shall be subject to this Order and any deviation from either of these Plans shall be a violation of the Order. 
 B. Within ninety (90) days of the effective date of this Order, unless otherwise noted in the approved Compliance Management Program Plan, the
Institution shall take the following steps to strengthen its Compliance Management Program: 
 1. Providing the Institution’s compliance
officer with sufficient dedicated staff and other resources to permit the compliance officer to perform all responsibilities in a timely and effective manner; 
 2. Providing a system for the collection of internal audit, quality control, and self-assessment review findings for the compliance department’s analysis and prompt coordination of corrective actions; 

3. Establishing a committee composed of representatives from all operating areas of the bank and the compliance department to facilitate communication
and coordination on compliance related matters among the units; 
 4. Enhancing policies and procedures to reflect current practices and
regulatory requirements and instituting a system to review and update them on a regular basis going forward; 
 5. Ensuring compliance with
residential mortgage lending requirements such as those set forth in TILA, RESPA, and HMDA, by: 
 (a) Providing appropriate enhancements to
the Institution’s policies, procedures and practices to ensure compliance with residential mortgage lending requirements; 
 (b)
Providing training to relevant staff in residential mortgage lending requirements and establishing an ongoing training program that reinforces staffs’ continuing awareness of those requirements; 
  

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 (c) Reviewing, on an ongoing basis, the accuracy of information provided by the Institution’s data
processing systems to the internal monitoring and oversight groups; and 
 (d) Reviewing loans on an ongoing basis for compliance with
regulatory requirements. 
 6. Establishing policies, procedures, and practices to ensure compliance with the requirements of the FDPA,
including ensuring that required notices are provided to borrowers if the flood insurance coverage is determined to be inadequate and ensuring that the Institution takes the necessary steps to force place insurance if the borrower fails to secure
adequate coverage. 
 IV. COMPLIANCE COMMITTEE 
 A. Within thirty (30) days of the effective date of this Order, the Board shall establish and
appoint an oversight committee of the Board (the Compliance Committee) comprised of at least three directors, the majority of whom shall be Outside Directors,1 to coordinate and monitor the Institution’s progress and compliance with this Order. 
 B.
Beginning at the first regular meeting of the Board after the end of the first full quarter after the effective date of this Order and quarterly thereafter, the Compliance Committee shall provide a written progress report to the Board that:

 1. Describes the actions taken by the Institution to comply with this Order and the results of such actions; 
 2. Identifies remaining actions to be completed within the quarter; 
 3. Identifies with specificity any noncompliance with the Order and remedial actions taken or proposed with respect to any noncompliance; 

	 1
	 As used in this Order, “Outside Director” means a director who is not:
(1) a controlling shareholder (as defined in 12 C.F.R. § 215.2(m); (2) a salaried officer or employee of the Savings Association or its subsidiary(ies) or service corporation(s); or (3) a salaried officer or employee of its
holding company or subsidiary of the holding company. 

  

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 4. Within thirty (30) days thereafter, the Board shall submit to the OTS: 
 (a) A copy of the Compliance Committee’s progress reports for that quarter, with any additional comments made and actions taken by
the Board; and 
 (b) A copy of the Board minutes reflecting discussion of the progress report. 
 5. Nothing contained herein shall diminish the responsibility of the entire Board to ensure the Institution’s compliance with the provisions of this
Order. 
 V. SUBMISSION TO OTS 
 All submissions to the OTS that are required by or contemplated by this Order shall be submitted within the specified timeframes. Submissions, including progress reports and any requests for extension of time, shall
be sent to: 
 Darrel Dochow, Regional Director 
 Office of Thrift Supervision 
 2001 Junipero Serra Blvd. 
 Daly City, CA 94014-3897 
 Mark Johnson,
Assistant Director 
 Office of Thrift Supervision 
 101 Stewart Street, Suite 1010 
 Seattle, WA 98101-2419 
 VI. DEFINITIONS 
 All technical
words or terms used in this Order for which meanings are not specified or otherwise provided by the provisions of this Order shall, insofar as applicable, have meanings as defined in Chapter V of Title 12 of the Code of Federal Regulations, the Home
Owners Loan Act (HOLA), the BSA, the Federal Deposit Insurance Act (FDIA), OTS Memoranda, or other published OTS guidance. Any such technical words or terms used in this Order and undefined in said Code of Federal Regulations, the HOLA, the FDIA.
OTS Memoranda. or other published regulatory guidance shall have meanings that are in accordance with the best custom and usage in the savings and loan industry. 
  

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 VII. SUCCESSOR STATUTES, REGULATIONS, GUIDANCE, AMENDMENTS 
 Reference in this Order to provisions of statutes, regulations, OTS Memoranda, and other published regulatory guidance shall be deemed to include
references to all amendments to such provisions as have been made as of the Effective Date and references to successor provisions as they become applicable. 
 VIII. NO VIOLATIONS AUTHORIZED; OTS NOT RESTRICTED 
 Nothing in this Order or the Stipulation
shall be construed as: 
 A. Allowing the Institution to violate any law, rule, regulation, or policy statement to which it is subject; or

 B. Restricting or estopping the OTS from taking any action(s) that it believes are appropriate in fulfilling the responsibilities placed
upon it by law including, without limitation, any type of supervisory, enforcement or other action that the OTS determines to be appropriate, arising out of matters described in Reports of Examination or based on other information in the possession
of the OTS. 
 IX. TIME CALCULATIONS; SEPARABILITY CLAUSE; STIPULATION INCORPORATED 
 A. Calculation of time limitations for compliance with the terms of this Order run from the Effective Date and shall be calendar based, unless otherwise
noted; 
 B. The Regional Director may extend any of the deadlines set forth in the provisions of this Order upon written request by the
Institution that includes reasons in support for any such extension. Any OTS extension shall be made in writing and sent to the Savings Association; 
 C. In the event any provision in this Order is ruled to be invalid, illegal or unenforceable by the decision of any court of competent jurisdiction, the validity, legality and enforceability of the remaining
provisions hereof shall not in any way be affected or 

  

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impaired thereby, unless the Regional Director in his/her discretion determines otherwise; and 
 D. The Stipulation is made a part hereof and is incorporated herein by this reference. 
 X. EFFECTIVE DATE; DURATION. 
 This Order is effective on the Effective Date as shown on the first page. This Order (including the related Stipulation) shall remain in effect until terminated, modified, or suspended, in writing by the OTS, acting by and through its
authorized representatives. 
  

			
	OFFICE OF THRIFT SUPERVISION
		
	By:	 	 /s/ Darrel W. Dochow

		 	Darrel W. Dochow
		 	Regional Director
		 	West Region

  

 8Stipulation and Consent to Issuance of an Order of Assessment

 Exhibit 10.2 
 UNITED STATES OF AMERICA 
 Before The 
 OFFICE OF THRIFT SUPERVISION 
  

					
	In the Matter of	  	)	  	Order No.: WE-08-003
		  	)	  	
	AMERICAN SAVINGS BANK, F.S.B.,	  	)	  	Effective Date: January 23, 2008
	Honolulu, Hawaii.	  	)	  	
		  	)	  	
	OTS Docket No.: 08384	  	)	  	
		  	)	  	

 STIPULATION AND CONSENT TO ISSUANCE OF 
 AN ORDER OF ASSESSMENT OF A CIVIL MONEY PENALTY 
 WHEREAS, the Office of Thrift Supervision (OTS), based upon information derived from the exercise of its regulatory responsibilities, is of the opinion that grounds exist to initiate a civil money penalty
assessment proceeding against American Savings Bank, F.S.B., Honolulu, Hawaii, OTS Docket No. 08384 (Institution), pursuant to 42 U.S.C. § 4012a(f); and 
 WHEREAS, the Institution desires to cooperate with the OTS and to avoid the time and expense of such administrative proceeding; and 
 WHEREAS, the Institution enters into this Stipulation and Consent to the Issuance of an Order of Assessment of a Civil Money Penalty (Stipulation) without admitting or denying that grounds exist to initiate a
civil money penalty proceeding but admitting the statements and conclusions in Paragraph 1 below, concerning jurisdiction, hereby stipulates and agrees to the following: 

 1. Jurisdiction. 
 (a) The Institution is a “savings association” within the meaning of 12 U.S.C. § 1813(b) and 12 U.S.C. § 1462(4) and a “regulated
lending institution” as that term is defined at 12 U.S.C. § 4003(a)(10); 
 (b) Pursuant to 12 U.S.C. § 1813(q) and 42 U.S.C.
§ 4003(a)(5), the Director of the OTS is the “appropriate Federal Banking agency” and the “Federal entity for lending regulation” to initiate and maintain a civil money penalty proceeding against the Institution pursuant to
42 U.S.C. § 4012a(f); and 
 (c) The Director of the OTS has delegated to the Regional Director of the West Region of the OTS or his
designee (Regional Director) the authority to issue civil money penalty assessment orders where a savings association has consented to the issuance of the order. 
 2. OTS Findings of Fact. The Institution failed to comply with the requirements set forth in 42 U.S.C. §§ 4001-4128, and OTS implementing regulations set forth at 12 C.F.R. Part 572.
Specifically, OTS finds the Institution engaged in a pattern or practice of violations under 42 U.S.C. § 4012a(f)(1) by failing to ensure adequate flood insurance coverage at loan origination in violation of 12 C.F.R. § 572.3 or failing to
provide appropriate notification or to force place insurance in instances where the loan was covered by no or inadequate flood insurance in violation of 12 C.F.R. §572.7. The violations involve a total of ninety-eight (98) loans.

 3. Consent. The Institution consents to the issuance by the OTS of the accompanying Consent Order of Assessment of Civil
Money Penalty (Order). The Institution further agrees to comply with the terms of the Order upon issuance and stipulates that the Order complies with all requirements of law. 
  

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 4. Finality. This Order is issued by the OTS under the authority of 42 U.S.C. §§
4012a(f)(1) and 4012a(f)(5). Upon its issuance by the Regional Director, it shall be a final order, effective and fully enforceable by the OTS pursuant to 12 U.S.C. § 1818(i) and 42 U.S.C. § 4012a(f). 
 5. Waivers. The Institution waives the following: 
 (a) The right to be served with a written notice of OTS’s assessment of a civil money penalty against it as provided by 12 U.S.C. § 1818(i) and 42 U.S.C. § 4012a(f)(4); 
 (b) The right to an administrative hearing of the OTS’s charges against it as provided by 12 U.S.C. § 1818(i), 12 C.F.R. Part 509, and 42
U.S.C. § 4012a(f)(4); 
 (c) The right to seek judicial review of the Order or otherwise to challenge the validity of the Order; and

 (d) Any and all claims against the OTS, including its employees and agents, and any other governmental entity for the award of fees,
costs, or expenses related to this OTS enforcement matter or the Order, whether arising under common law, or under the term of any statutes including, but not limited to, the Equal Access to Justice Act, 5 U.S.C. § 504, or 28 U.S.C. §
2412. 
 6. OTS Authority Not Affected. Nothing in this Stipulation or accompanying Order shall inhibit, estop, bar or
otherwise prevent the OTS from taking any other action affecting the Institution if at any time OTS deems it appropriate to do so to fulfill the responsibilities placed upon OTS by law. 
 7. Other Governmental Actions Not Affected. Institution acknowledges and agrees that its consent to the issuance of the Order does not
release, discharge, compromise, settle, dismiss, resolve, or in any way affect any actions, charges against, or liability of the Institution 

  

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that arise pursuant to this action or otherwise, and that may be or have been brought by any other government entity other than the OTS. 
 8. Miscellaneous. 
 (a) The
laws of the United States of America shall govern the construction and validity of this Stipulation and of the Order; 
 (b) If any provision
of this Stipulation and the Order is ruled to be invalid, illegal, or unenforceable by the decision of any Court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby, unless the Regional Director in his sole discretion determines otherwise; 
 (c) All references to the OTS in
this Stipulation and the Order shall also mean any of the OTS’s predecessors, successors, and assigns; 
 (d) The section and paragraph
headings in this Stipulation and the Order are for convenience only, and such headings shall not affect the interpretation of this Stipulation or the Order; and 
 (e) The terms of this Stipulation and the Order represent the final agreement of the parties with respect to the subject matters hereof and constitute the sole agreement of the parties with respect to such subject
matters. 
 9. Signature of Directors. Each Director signing this Stipulation attests that he or she voted in favor of a
resolution authorizing the consent of the Institution to the issuance of the Order and the execution of the Stipulation. 
  

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 WHEREFORE, the Institution, by a majority of its directors, executes this Stipulation and Consent
to Issuance of an Order of Assessment of a Civil Money Penalty. 
  

											
	American Savings Bank, F.S.B.	 		 	Office of Thrift Supervision	 	
	Honolulu, Hawaii	 		 	West Region	 	
					
	Accepted by a majority of its directors:	 		 	By:	 	 /s/ Darrel W. Dochow
	 	
		 		 		 		 	Darrel W. Dochow	 	
	By:	 		 		 		 	Regional Director, West	 	
				
	 /s/ Kenton T. Eldridge
	 		 	Dated: January 23, 2008	 	
	Director	 		 		 		 	
					
	 /s/ Diane J. Plotts
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Don E. Carroll
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Bert A. Kobayashi
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Jeffrey N. Watanabe
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Constance H. Lau
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Richard W. Gushman, II
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Louise K. Y. Ing
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Shirley J. Daniel
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Victor H. Li
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Jorge G. Camara, M.D.
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Barry K. Taniguchi
	 		 		 		 	
	Director	 		 		 		 	

  

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