The Federal Reserve Board on Friday announced it had issued a cease and desist order against Altus, Okla.-based FSB Bancorp Inc. According to the order, FSB Bancorp failed to timely file required regulatory reports and notices, including a report on changes in organizational structure, engaged in banking activities not compliant with regulatory requirements for financial holding companies, and violated section 23A of the Federal Reserve Act (12 U.S.C. § 371c) and Regulation W of the Board of Governors of the Federal Reserve System (12 C.F.R. Part 223). FSB Bancorp has consented to the issuance of the order, according to the Fed, and is required within 60 days of the order to submit a written plan to strengthen oversight of the board of directors on the management and operations of FSB and its nonbank subsidiaries. The plan must include action to improve FSB's condition and maintain effective control over the senior management and operations. The plan must address the responsibility of the board of directors to ensure FSB's adherence to applicable laws and regulations. The written plan must also include a description of the information that will be included in periodic reports to be reviewed by the board of directors. The order requires that FSB hire an independent accounting firm to conduct a company-wide audit all the way back to calendar year 2005, the results of which will be made available to the Fed at the same time they are released to FSB. The company will then be required to submit a written plan "to correct all deficiencies noted in the audit report" within 45 days of receiving the audit report. FSB will be required to submit written procedures to strengthen accounting controls and maintain accurate books and records within 60 days of the order. Within 30 days of the order, FSB will be required to submit an acceptable repayment plan that addresses any funds received by FSB or its nonbank subsidiaries in connection with the bank's violations of the Federal Reserve Act and Regulation W of the Board of Governors, which deals with the establishment of the Asset-Backed Commercial Paper Money Market Mutual Fund Lending Facility (AMLF) "to reduce liquidity and other strains being experienced by money market mutual funds...." According to Regulation W, bank holding companies "are able to borrow from the Federal Reserve Bank of Boston...on condition that the organizations use the proceeds of the Federal Reserve credit to purchase, at amortized cost, certain highly rated" asset-backed commercial paper from money market mutual funds. FSB is also required to submit within 90 days of the order a written code of ethics and conflicts of interest policy to "prohibit self-dealing by institution-affiliated parties and their related interests, and the advancing of personal, business, or other interests at the expense of FSB...." Write to Diana Golobay at diana.golobay@housingwire.com.