Consent order revealed for former cfsbank chairman
A consent order has been agreed to between regulators and Neil Bassi, former president, chairman and CEO of Charleroi-based cfsbank.
The consent order was signed Nov. 29 with the U.S. Department of the Treasurer Office of the Comptroller of the Currency (OCC).
Bassi is accused of engaging in unsafe and unsound practices and breaching his fiduciary duty by failing to supervise an employee.
Under the terms of the consent order, Bassi must provide a copy of the order to any prospective employer before taking a job in the banking business.
He also is forced to pay a $15,000 fine and follow other orders if employed by a bank or other financial institution.
The orders include adhering to appropriate overdraft controls and complying fully with all laws and regulations applicable to the institution, not engaging in any unsafe or unsound practices, fulfilling his fiduciary duties of loyalty and care, adhering to the institution’s written policies and procedures and appropriately supervising any subordinate employees to act in accordance with any area of overdraft approval.
Bassi became president and CEO of the bank in 1999 and became chairman of the board in 2007. He resigned from all three posts in January 2020.
A forensic audit covering a period from Jan. 1, 2016, through March 31, 2019, revealed 2,416 overdraft occurrences in excess of $1,000, totaling about $17 million, that occurred during the analysis period. The overdraft activity of one customer accounted for $13.1 million of that $17 million.
The bank was required to conduct the audit after a formal agreement with the OCC that was signed in 2019. An examination of the OCC uncovered unsafe or unsound practices, including those relating to commercial credit oversight and administration, internal controls, corporate governance, and violations of law, rule, or regulation, including those relating to conflicts of interest, regulatory reporting and overdrafts.
A notice of charges from the OCC dated Dec. 17, 2020, stated there were about $62,000 of waived overdraft fees in each 2016 and 2017.
“During the Analysis Period, Employee-1 approved nearly all of the $13.1 million in overdrafts in Customer-1’s accounts,” read the notice of charges. “Despite having knowledge of the overdraft activity within Customer-1’s accounts, Respondent never directed Employee-1 to cease approving the overdraft activity in Customer-1’s accounts or to cease waiving the associated fees.”
Bassi also is accused of not disclosing the overdraft activity and waivers when members of the board were asked to approve loans for that customer.
“Respondent’s breach of his fiduciary duty to the Bank was part of a pattern of misconduct that was likely to cause more than a minimal loss to the Bank,” the December 2020 report said.
Until its March 1, 2015, rebranding, cfsbank was known as Charleroi Savings Bank, which was founded in 1936 as a savings and loan.
The bank has 10 branches in Bentleyville, Charleroi, Monongahela, Peters Township, Southpointe and Washington in Washington County; Connellsville in Fayette County; Rostraver and Hempfield townships in Westmoreland County, and Seven Fields in Butler County.