Lake Shore Bancorp and its holding company, Lake Shore Federal Savings Bank, have made significant progress in addressing regulatory issues following a data breach in 2022. The Federal Reserve Board (Fed) has ended its enforcement action against the company, which was initiated in June 2023. The action required the company to provide additional capital and address issues raised by the Office of the Comptroller of the Currency (OCC).
The OCC had initially placed a “troubled bank” label on Lake Shore Federal Savings Bank in 2023, following a consent order that identified several areas of concern, including cybersecurity, anti-money-laundering, and Bank Secrecy Act compliance. The bank’s CEO, Daniel Reininga, resigned shortly after the consent order was issued, and the company hired a new CEO, Kim Liddell, who has been working to address these issues.
The company has implemented numerous changes, including improving its cybersecurity measures, compliance programs, and management practices. The OCC removed the “troubled bank” label in December 2023, and the Fed’s decision to end its enforcement action is a testament to the company’s progress.
In a statement, Liddell expressed pride in the company’s efforts to address regulatory issues and improve its practices. She noted that the bank’s goal has been to remediate operational issues identified by its primary regulator, and the early lifting of the consent order by the OCC reflects the significant progress made. The company’s continued focus on serving its customers and communities has been a key factor in its recovery. With the end of the Fed’s enforcement action, Lake Shore Bancorp and its holding company can now focus on moving forward and continuing to serve its customers and communities. The company’s successful recovery is a testament to its dedication to improving its operations and compliance practices.