• On December 19, the Fed released a list of enforcement actions that included
    • A Written Agreement with Marblehead Bancorp of Marblehead, Ohio to address deficiencies that were identified in an examination in September of 2023. The agreement requires Marblehead to submit for approval:
      • A written plan to strengthen board oversight of the bank’s management an operations,
      • A written report of findings and recommendations prepared by an acceptable third party following an assessment of the bank’s staffing needs and the qualifications and performance of each senior officer,
      • An enhanced written investment policy,
      • A written plan to improve the management of the bank’s investment portfolio,
      • A written plan to enhance the bank’s interest rate risk management practices
      • An enhanced liquidity risk management program, and
      • A written plan to maintain sufficient capital.

Additionally, the bank cannot pay dividends or make any capital distributions without prior written approval from the Fed and must provide written progress reports within 45 days after the end of each quarter detailing all actions taken to comply with the agreement.

  • On December 19, the OCC assessed a civil money penalty of $15 million against U.S. Bank N.A. of Cincinnati, Ohio for unfair practices in the bank’s prepaid card program to distribute unemployment insurance benefits. The OCC found that the bank had deficient processes for permitting consumers to regain access to their unemployment benefits in a reasonable timeframe following account freezes. The CFPB also ordered to the bank to pay a separate $15 million penalty and $5.7 million to redress harmed consumers.

 

  • On December 27, the FDIC released proposed revisions to the reporting forms and instructions for the Call Reports and FFIEC 002 relating to loans to nondepository institutions and other loans, guaranteed structured financial products, and proposed long-term debt requirements. Details of the proposed changes have been published in Volume 88, No. 247 of the Federal Register and are scheduled to become effective on June 30, 2024. As these proposed revisions are likely to significantly affect the call reporting process, Doran Jones suggests that banks carefully review the proposed changes and submit comments by February 26, 2024.

 

  • On December 29, the FDIC announced enforcement actions for November, including:
    • A Consent Order against Peoples Bank of Munster, Indiana for unsafe or unsound practices and violations of law related to its Anti-Money Laundering/Combating of Financial Terrorism program.
    • Termination of a Consent Order against Wex Bank of Sandy, Utah issued in May, 2022.
    • A Consent Order against First Fed Bank of Port Angeles, Washington for unsafe or unsound banking practices, deceptive and unfair acts and violations of law related to non-optional debt cancellation features on loans. The order requires First Fed Bank to correct the violations of law, bolster board and senior management oversight, identify all new bank products and third party offerings, enhance oversight of third party agreements and services, and implement a sound risk-based compliance management program.
    • A Consent Order against Liberty Bank, Inc. of Salt Lake City, Utah for unsafe or unsound banking practices relating to capital deterioration, operating losses, inaccuracy of books and records, and deficiencies in management and Board oversight. The action ordered the bank to recapitalize and sell, merge or liquidate.
    • A Civil Money Penalty against Horicon Bank of Horicon, Wisconsin for violations of law related to the Flood Disaster Prevention Act.
    • A Consent Order against Brighton Bank of Brighton, Tennessee for violations of law related to the Bank Secrecy Act.

Contact us to learn how a strategic partnership with Doran Jones can provide you with cost-effective solutions by leveraging our expertise with these and other critical risk and compliance functions.