The Office of the Comptroller of the Currency has terminated its consent order against Lake Shore Savings Bank and ended its designation as a lender in “troubled condition,” the Dunkirk, New York-based bank said Tuesday.
“Our primary goal has been remediation of the operational issues identified by our primary regulator,” Lake Shore CEO Kim Liddell said in a release. “The early lifting of the Consent Order by the OCC reflects the significant and speedy progress our team made.”
The lifting of the order ends a three-year odyssey that began in November 2021, when the bank said it suffered a “data security incident” in which certain data in its internal systems, possibly including customers’ personal information, had been accessed without authorization.
Lake Shore disclosed the breach in March 2022, and the OCC, according to a written agreement four months later, found “unsafe or unsound” practices at the bank, including weakness in information technology security and risk governance. The regulator ordered the bank to create a compliance committee to monitor progress and report back regularly.
But the agency overrode that agreement in February 2023, issuing a consent order and asserting the bank was in “substantial noncompliance” and, further, was not adhering to the Bank Secrecy Act.
Lake Shore neither admitted nor denied the OCC’s findings.
However, the bank suspended its quarterly dividend, and its then-CEO, Daniel Reininga, resigned in March 2023 — two months before he had planned to retire. The bank then tapped Liddell as its chief executive.
“I am proud of the team and their continued focus on serving our customers and communities,” Liddell said Tuesday.
Lake Shore counts roughly $700 million in assets and 10 branches in western New York.
