In November, the Office of the Comptroller of the Currency
(OCC) released details about multiple enforcement actions citing “unsafe and
unsound” practices against national banks and federal savings associations, as
well as individuals currently and formerly affiliated with these types of
entities.
The types of practices cited in the latest round of
enforcement actions announced by the OCC are described in Title I of the Dodd-Frank
Act, concerning financial stability and the impact of risky practices by
depository institutions.
The OCC’s latest actions against supervised institutions include
the following:
·
Formal Agreement against Heritage Bank,
National Association, Spicer, Minn., for unsafe or unsound practices, including
those relating to capital and strategic planning, timely and adequate credit
review, ongoing monitoring of the credit portfolio, as well as liquidity risk
management. The case docket is available here.
·
Consent Order against United Fidelity Bank,
FSB, Evansville, Ind., for engaging in unsafe or unsound practices, including
those relating to corporate governance and enterprise risk management, credit
underwriting and administration, liquidity risk management, as well as interest
rate risk management. The case docket is available here.
·
Consent Order against Vast
Bank, National Association, Tulsa, Okla., for engaging in unsafe or
unsound practices, including those relating to capital ratios, capital and
strategic planning, project management, books and records, liquidity risk
management, interest rate risk management, information technology controls,
risk management for new products, as well as custody account controls. The case
docket is available here.
Actions taken against individuals are:
·
Order of Prohibition against Andrew
Leseberg, former loan processor, The Citizens National Bank, N.A., Greenleaf, Kan.,
for stealing, embezzling, or otherwise misappropriating funds at a loss or risk
of loss to the bank. The full enforcement docket is available here.
·
Notice of Charges for Order of
Prohibition against Helen Caldwell, former financial advisor, Citibank,
N.A., Sioux Falls, S.D. In the notice of charges, the OCC alleges, among other
things, that Caldwell: solicited an elderly customer to invest, and the
customer did invest, more than $200,000 in a company Caldwell co-owned;
received at least $99,000 in direct payments from the company; and falsely represented
that she was following, and would follow, policies prohibiting this conduct. The
case docket is available here.
In a press release, the OCC explained its use of enforcement
actions against institution-affiliated parties (IAP) is intended to deter,
encourage correction of, or prevent violations, unsafe or unsound practices, or
breaches of fiduciary duty. Enforcement actions against IAPs reinforce the
accountability of individuals for their conduct regarding the affairs of a
bank.
The term “institution-affiliated party,” or IAP, is defined
in 12 USC 1813(u) and includes bank directors, officers, employees, and
controlling shareholders. Orders of prohibition prohibit an individual from any
participation in the affairs of a bank or other institution as defined in 12
USC 1818(e)(7).
All OCC public enforcement actions since August 1989 are
available for download via the agency’s searchable enforcement actions database.