THE Office of the Comptroller of the Currency (OCC) has this month released enforcement actions taken against national banks and federal savings associations (banks), and individuals currently and formerly affiliated with banks the OCC supervises.
Former General Counsel, Sterling Bank and Trust, FSB Southfield, Michigan, for her role in not ensuring the bank conducted or suggesting to the Board that the bank conduct an investigation into concerns related to a residential mortgage loan product, not ensuring the bank’s BSA program had an adequate system of internal controls, and not timely reporting suspicious activity related to certain residential mortgage loans.
The OCC uses enforcement actions against banks to require the board of directors and management to take timely actions to correct the deficient practices or violations identified. Actions taken against banks are:
- Cease and Desist Order against Blue Ridge Bank, N.A., Martinsville, Virginia, for unsafe or unsound practices, including those related to the Bank Secrecy Act (BSA)/anti-money laundering (AML), capital ratios, capital and strategic planning, liquidity risk management, and information technology controls. The deficiencies in the BSA/AML compliance program resulted in violations of law, rule, or regulation, and the bank also failed to correct previously reported BSA problems. (Docket No. AA-ENF-2023-68). The OCC also terminated the bank’s formal agreement dated August 29, 2022, which was superseded by the cease and desist order. (Docket No. AA-ENF-2024-13).
- Cease and Desist Order, Order for Civil Money Penalty, andGramm-Leach-Bliley Agreement against City National Bank, Los Angeles, California, for unsafe or unsound practices, including systemic deficiencies related to the bank’s operational, compliance, investment management, and strategic risk management and internal controls; noncompliance with certain guidelines establishing heightened standards applicable to the bank; and certain violations of law, rule, or regulation related to the Bank Secrecy Act and 12 CFR Part 9 – Fiduciary Activities of National Banks. The assessed civil money penalty is $65 million. The bank also executed an agreement with the OCC to comply with certain requirements related to controlling or holding an interest in financial subsidiaries. Refer to OCC News Release 2024-8. (Docket Nos. AA-ENF-2024-7 and AA-ENF-2024-8 and No. 2023-016)
- Formal Agreement with The First National Bank of St. Ignace, St. Ignace, Michigan, for unsafe or unsound practices, including those related to capital planning, capital stress testing, and strategic planning, and a violation of law, rule, or regulation related to payment of dividends. (Docket No. AA-CE-2024-1)
The OCC uses enforcement actions against an institution-affiliated party (IAP) 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). Actions taken against IAPs are:
- Order of Prohibition and Order for Civil Money Penalty against Stephen Adams, Former Senior Vice President and Managing Director of Residential Lending, Sterling Bank and Trust, FSB, Southfield, Michigan, for his role in failing to appropriately supervise, investigate, and discipline employees originating residential mortgage loans. The assessed civil money penalty is $50,000. (Docket No. AA-ENF-2023-71)
- Personal Cease and Desist Order against Colleen Kimmel, Former General Counsel, Sterling Bank and Trust, FSB Southfield, Michigan, for her role in not ensuring the bank conducted or suggesting to the Board that the bank conduct an investigation into concerns related to a residential mortgage loan product, not ensuring the bank’s BSA program had an adequate system of internal controls, and not timely reporting suspicious activity related to certain residential mortgage loans. (Docket No. AA-ENF-2023-69)
- Personal Cease and Desist Order against Jonathan Kolk, Former Residential Underwriting Manager, Sterling Bank and Trust, FSB Southfield, Michigan, for capitulating to pressure to quickly underwrite certain residential mortgage loans and his role in underwriting, and supervising the underwriting of, loans that had false or fraudulent loan applications. (Docket No. AA-ENF-2023-70)
- Order of Prohibition against Cole R. Mann, Former Branch Banker in a Tucson, Arizona branch of PNC Bank, National Association, Wilmington, Delaware, for stealing, embezzling, or otherwise misappropriating funds from the bank and a bank customer. (Docket No. AA-ENF-2023-65)
- Order of Prohibition against Chimere Shanta Mitchell, Former Fraud and Claims Operations Specialist at an Alabama office of Wells Fargo Bank, N.A., Sioux Falls, South Dakota, for misappropriating confidential information of bank customers, including more than 20 elderly customers, and selling the information to a third party, resulting in fraudulent transactions. (Docket No. AA-ENF-2024-9)
- Order of Prohibition against Aaron Parsons, Relationship Banker at a Kent, Connecticut branch of Webster Bank N.A., Stamford, Connecticut, for making unauthorized withdrawals from the accounts of bank customers, including four elderly customers, and depositing the funds into his own bank account. (Docket No. AA-ENF-2024-6)
- Decision on Entry of Default and Order of Prohibition against Nyema’sha Taylor, Former Teller at an Atlanta, Georgia branch of Wells Fargo Bank, N.A., Sioux Falls, South Dakota, for knowingly processing unauthorized cash withdrawals from a customer’s account. (Docket AA-ENF-2021-23)
- Order of Prohibition against Francis Andujar Velazquez, Former Senior Customer Service Representative, Santander Bank, Wilmington, Delaware, for misappropriating funds from customers’ accounts by making purchases using confidential bank customer information and selling confidential information of bank customers to a third party and facilitating fraudulent transactions. (Docket No. AA-ENF-2023-42)
- Order of Prohibition against Mirsha Yamili Wilson, Former Associate Banker, JPMorgan Chase Bank, N.A., Columbus, Ohio, for taking cash used to supply a bank branch’s ATMs and concealing the shortage. (Docket No. AA-ENF-2023-67)
The OCC terminates enforcement actions including when a bank has demonstrated compliance with all articles of an enforcement action or when the OCC determines that articles deemed “not in compliance” have become outdated or irrelevant to the bank’s current circumstances. Termination actions include:
- Order Terminating the Cease and Desist Order against Wells Fargo Bank, N.A., Sioux Falls, South Dakota, dated September 16, 2016 (Docket No. AA-EC-2016-66), for deficiencies and unsafe or unsound practices in the bank’s risk management and oversight of the bank’s sales practices, and unsafe or unsound sales practices by the bank. (Docket No. AA-ENF-2024-11)
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All OCC public enforcement actions taken since August 1989 are available for download by viewing the searchable enforcement actions database at https://apps.occ.gov/EASearch.
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