OCC's April Enforcement Actions Hit 11 Banks

The Office of the Comptroller of the Currency took regulatory action against 11 financial institutions and terminated orders against five others in April, the agency said Friday.

The OCC’s two biggest targets during the month were U.S. subsidiaries of foreign companies: Royal Bank of Scotland and Bank of Montreal. RBS Citizens in Providence, R.I., entered into a consent order with the OCC on April 29 over problems with its overdraft-protection program, its rewards program, and the stop-payment process for fund transfers. The OCC found that RBS Citizens engaged in a “pattern of misconduct” and “deceptive practices” that resulted in its deposit customers being charged inappropriate fees.

RBS agreed to appoint a compliance committee and form a plan to change the practices. The bank was also ordered to pay a $5 million civil money penalty and make $2.5 million restitution to the 265,000 customers affected.

BMO Harris Bank in Chicago entered a formal agreement with the OCC on April 29, relating its compliance with anti-money laundering rules. The bank agreed to improve its oversight of Bank Secrecy Act and money-laundering rules and form a compliance committee. (The Federal Reserve issued a parallel order against the bank over similar lapses.)

Millennium Bank in Sterling, Va., entered into a consent order on April 15 to form a compliance committee and raise its capital ratios. The $148 million-asset company held Tier 1 capital of 2.23% and total risk-based capital of 3.84% as of March 31, according to the Federal Deposit Insurance Corp. The consent order replaced a formal agreement from 2008.

The OCC also entered into formal agreements with Mid-Southern Savings Bank in Salem, Ind.; Severn Savings Bank in Annapolis, Md.; First National Bank of Hartford in Hartford, Wis.; Ladysmith FS & LA in Ladysmith, Wis.; and Midwest FS & LA of Saint Joseph, Mo.

The OCC fined First Federal Bank of Midwest in Defiance, Ohio; Robert Lauer of First National Bank Northeast in Lyons, Neb.; and Robert Gunville of the First National Bank of Niagara in Niagara, Wis. Gunville, the  chairman of the bank’s board, was fined $50,000 for enriching himself by arranging improperly documented loans from the bank; he was also hit with a consent order.

The OCC terminated enforcement actions against Aurora Bank in Littleton, Colo.; First National Bank in Tremont, Ill.; Michelle Gulli of Union Federal Bank of Indianapolis; Liberty Savings Bank in Wilmington, Ohio; and First Federal Community Bank in Paris, Texas.