OCC Cites 4 Regional Banks for ‘Unsafe or Unsound’ Practices

The OCC has released enforcement actions against national banks accused of “unsafe or unsound” practices.

The Office of the Comptroller of the Currency (OCC) said it “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,” per a Friday (Oct. 18) press release.

The four banks are:

Axiom Bank of Maitland, Fla., cited for practices related to its Bank Secrecy Act/anti-money laundering (BSA/AML) compliance program.

First National Bank of Dennison, Dennison, Ohio, cited for practices related to board and management oversight, credit underwriting and credit administration.

First National Bank of Lake Jackson, Lake Jackson, Texas and First National Bank of Waverly, Waverly, Ohio, both cited for practice related to strategic and capital planning, liquidity risk management and interest rate risk management.

The OCC also noted its recent cease and desist order and penalty against a more high-profile bank: the American arm of Canada’s TD Bank, issued a $450 million penalty for failures of its BSA/AML program.

TD entered a plea agreement with regulators last week and said it takes full responsibility for its failures and is working to remediate them.

“Money laundering is a serious global threat, and our U.S. operation did not maintain an adequate AML program to thwart criminal activity,” Alan MacGibbon, chair of the board of TD Bank Group, said in a Thursday press release.

In other compliance-related news, PYMNTS wrote about the appeal of core banking for financial institutions (FIs) and FinTechs in scaling their anti-money laundering efforts and moving them into real-time functionality.

“Generally speaking, core banking providers help FIs upgrade their back-end processes and move toward always-on connectivity as traditional firms modernize in incremental fashion,” that report said, noting research that shows 75% of banks wrestling with new digital solutions due to their legacy infrastructure.

As for FinTechs, core banking solutions help manage onboarding, card issuance and payments processing.  In the first half of last year, FinTechs and digital banks accounted for 47% of new accounts, a notable increase from 36% in 2020.

“As for the expansion beyond traditional accounts, we found that 41% of consumers who hold their primary bank account at a digital-only bank also hold their primary credit card with the same institution,” PYMNTS wrote.