On February 5, 2024, the OCC initiated prohibition and civil money penalty proceedings against Stephen Adams, a former Senior Vice President Managing Director of Residential Lending of Sterling Bank and Trust, FSB. Adams is ordered to pay a civil money penalty in the amount of $50,000.
The OCC found that between 2011 and December 2019, the Bank offered the Advantage Loan Program (“ALP”), a low-document residential loan program. The ALP presented high risks for fraud, money laundering, and lending misconduct and, in fact, the Bank originated numerous ALP loans that had false or fraudulent loan applications. Despite deficiencies within the ALP, the Bank failed to take appropriate corrective action and continued to grow the ALP. As SVP and Managing Director of Residential Lending, Adams failed to appropriately supervise, investigate, and discipline employees, or adequately escalate the concerns to the Board, senior officers, or legal counsel. In addition, Adams received bonuses based in part on loan production, including the origination of ALP loans.
Adams is prohibited from participating in any manner in the conduct of Sterling Bank’s affairs or serving/ acting as an “institution-affiliated party”.
The consent order can be found here.