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"Avoiding monetary penalties after OCC enforcement orders" by Daniel P. Stipano (American Bar Association Business Law Today)

American Bar Association Business Law Today

Daniel P. Stipano

In recent years, the OCC has aggressively used its cease and desist authority to address a variety of supervisory problems, including unfair or deceptive acts or practices, Bank Secrecy Act/anti-money laundering, and safety and soundness. As a result, there are a sizeable number of consent cease and desist orders that are in place against OCC-supervised institutions. Although the OCC has issued consent orders against banks of all sizes, the largest institutions have been disproportionately affected, and many of them remain under longstanding consent orders.

Unfortunately, the issuance of a consent order does not necessarily resolve a bank’s supervisory issues with the OCC. In a series of high-profile cases last year, the OCC assessed civil money penalties against banks that were already subject to consent orders of various durations. Civil money penalties (CMPs) levied against five major banks in 2018 approached $800 million. All of these actions are for compliance breakdowns, and most of them involve deficiencies with respect to BSA/AML compliance, which continues to be a perennial issue. The size of these penalties alone demonstrates that the OCC will act forcefully to ensure that timely corrective action is taken, and that compliance with existing consent orders will be vigorously enforced.

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