Lake Shore Savings freed from breach-related consent order

The Office of the Comptroller of the Currency has lifted Lake Shore Savings Bank’s “troubled condition” status.

The OCC also put an end to a consent order requiring the $700 million-asset bank to correct deficiencies related to information technology, security and anti-money-laundering efforts.

The moves resolve issues arising from the bank’s handling of a cybersecurity attack more than two years ago.

“The early lifting of the Consent Order by the OCC reflects the significant and speedy progress our team made,” President and CEO Kim Liddell said in a press release Tuesday.

Lake Shore’s problems began in March 2022, when the Dunkirk, New York, bank disclosed in a filing with the Securities and Exchange Commission that hackers had breached its cybersecurity walls and gained access to customers’ personal information.

The OCC and the bank reached a written agreement in July of that year, in which the regulator said it found unsafe or unsound practices at the bank, including information technology security weaknesses. Regulators ordered the bank to create a special compliance committee and submit quarterly reports to the board and the OCC.

In February 2023, the OCC said it found Lake Shore wasn’t complying with the agreement and issued a consent order. The bank did not admit to or deny the OCC’s conclusions.

After the order, Lake Shore suspended its quarterly dividend and President and CEO Daniel Reininga stepped down ahead of his planned retirement. Liddell took the reins in April 2023.