Federal Savings Bank of Chicago, the mortgage lender that convicted former CEO Stephen Calk attempted to leverage for an unsuccessful shot at a Trump administration post, has agreed to stricter oversight after regulators found “unsafe or unsound practices.”

The Office of the Comptroller of the Currency, which oversees federally chartered banks, is requiring the bank’s board to form a three-member compliance committee to adopt and implement “corrective actions” related to risk management, consumer compliance and bank secrecy.

The agreement, dated Oct. 29, was published online Thursday by the OCC. The new measures at Federal Savings Bank include creating an internal audit plan, designating a consumer compliance officer and improving procedures to prevent money laundering and other suspicious activity. The bank must submit a progress report to regulators within 120 days.

In July, Calk, 57, was convicted in New York federal court of financial institution bribery for issuing high-risk loans to former Trump campaign chairman Paul Manafort in the hopes of landing a senior position with the administration. Calk faces up to 30 years in prison, with sentencing scheduled for Jan. 10.

The scheme began in July 2016 when Calk, founder and then-CEO of Federal Savings Bank, offered to extend $16 million in loans Manafort “urgently needed” to avoid foreclosure on multiple properties, the indictment alleged. The loans were issued despite “significant red flags” regarding Manafort’s ability to repay the debt, prosecutors alleged.

While the loans were pending approval, Calk submitted a ranked list of the government positions he wanted, starting with the secretary of the treasury and working his way down to 19 ambassadorships, according to the indictment.

Manafort appointed Calk to an economic advisory position with the Trump campaign, and recommended him for an administration position after Trump was elected in November 2016. In early January 2017, Calk interviewed for the position of undersecretary of the Army, “due to (Manafort’s) efforts,” but did not land the job, prosecutors said.

Manafort was convicted in 2018 on several counts of bank and tax fraud but was pardoned by Trump in December 2020.

Chicago-based Federal Savings Bank, which bills itself as one of the largest veteran-owned banks in America, focuses on mortgage lending, with locations in Lake Forest and Chicago. Stephen Calk’s brother, John Calk, assumed the role of CEO and chairman in 2019.

“As the Federal Savings Bank continues to experience significant business growth, we have been working closely with the Office of the Comptroller of the Currency to upgrade our policies and procedures,” John Calk said in an emailed statement. “These enhancements have and will make the bank even stronger as we help our customers achieve the American Dream of home ownership.”

Federal prosecutors said Stephen Calk owned 67% of the bank’s holding company from July 2016 to January 2017, the period under investigation. A bank spokeswoman did not respond to a request Friday to disclose his current ownership stake.