Sunday, July 13, 2014


How many times have you looked at a Consent Order, stipulated between the Office of the Comptroller of the Currency (OCC) and a national bank, and noted that the Order was handed down years ago, and never terminated ? This generally means that the sanctioned financial institution has not yet satisfied OCC staff, or auditors, regarding the strength and effectiveness of its anti-money laundering program, but that no further enforcement action has been taken; this is a major problem.

When a bank's officers and directors ascribe to the belief that civil fines & penalties are but the cost of doing business, and never take Consent Orders seriously, no substantive reform of an intentionally ineffective compliance program occurs.When a slap on the wrist is not sufficient, more punitive steps are in order, but they rarely, if ever, occur.

For example, a visit to the OCC website revealed that Intercredit Bank, NA, which is located in Miami, Florida, received a Consent Order back in 2010*, for what are stipulated to be BSA and SAR filing failures. The bank technically failed to admit guilt, though a $200,000 civil penalty was assessed, which would indicate serious violations, though they were not specified, which puts the banking public as a distinct disadvantage, as it does not know the extent of the violations. Why the secrecy,  will it embarrass the bank ? Other banks, as well as potential clients, should have access to the details.

Since the order appears to have not been terminated, obviously the deficiencies have not been corrected, to the satisfaction of the OCC. In four years, any number of additional AML violations could have occurred. If the order still remains in full force and effect, by definition, the deficiencies were not corrected timely, and there should be significant consequences. The banking public deserves to be assured that consent orders be obeyed in real-time, not in the indefinite future. Note: The bank's compliance department advises that the BSA-related case was terminated, and an inadequate capitalization order was then entered, which is still outstanding. The OCC website does not couple the termination with the order, which leads the reader to conclude that it still remains outstanding.

Should there not be automatically vesting additional fines for extended periods, when a bank is still non-compliant ? Otherwise, where's the incentive to improve. Spare the rod and spoil the [bank], to borrow a relevant phrase. Mr. OCC, where are you on follow-up ?

Safe & sound in this case ?
*Intercredit Bank NA, Case No: AA-EC-2010-39

1 comment:

  1. Is this the same InterCredit Bank that is written up in Ripoff Report about stealing money from a depositor?


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