OCC Takes Action Against Bank Vendors BSERV and Fundtech

The Office of the Comptroller of the Currency took action against bank technology providers BSERV and Fundtech in December, ordering the companies to ensure that their services effectively monitor risk.

The services offered by BSERV in Las Vegas and Fundtech in Jersey City, N.J., do not effectively monitor vendor risk or offer effective disaster-recovery planning, according to the regulator's consent order. The consent order also faults the services' ability to identify and address software vulnerabilities and comprehensively audit high-risk areas.

The OCC ordered BSERV and Fundtech to increase board oversight, assess information security risk and develop a vendor management program in line with regulations, along with other requirements.

The regulator also took action against seven other banks and lifted enforcement actions against five in December and early January, according to the OCC's monthly roundup.

JPMorgan Chase (JPM) received a $350 million civil money penalty as part of a larger settlement over its role in the Bernard Madoff Ponzi scheme. The OCC's consent order charges JPMorgan with deficiencies in anti-money laundering compliance and failure to report suspicious activity.

The OCC also ordered American Express (AXP) to pay $3 million as part of a $76 million penalty over unfair marketing and billing practices. The consent order against American Express charges the company with billing customers for identification-protection products they never received and with peddling a debt-cancellation product in a deceptive manner.

A consent order against Rabobank in Roseville, Calif., the U.S. arm of Dutch lender Rabobank, ordered the lender to improve anti-money-laundering compliance.

Colombo Bank in Rockville, Md., was hit with a modified consent order ordering it to address troubled loans, develop a capital plan as well as a strategic plan, reduce credit risk and appraise other real estate owned.

A modified consent order against Los Alamos National Bank in Los Alamos, N.M., requires the lender to improve compliance with anti-money-laundering regulations as well as the Home Mortgage Disclosure Act. Los Alamos was also ordered to maintain a minimum 8% Tier 1 capital ratio and 11% total risk-based capital ratio, address problems with management leadership, manage interest rate risk and refrain from entering into sale, merger or recapitalization agreements that require the bank to pay anything other than expenses.

BMO Harris Bank in Chicago entered into a formal agreement with the OCC over anti-money-laundering compliance. First National Bank of Layton in Layton, Utah, signed a formal agreement requiring it to improve compliance with risk management, lending and mortgage banking compensation.

The OCC also terminated enforcement actions against The Headland National Bank in Headland, Ala., Independence Federal Savings Bank in Washington, D.C., Community State Bank in Ankeny, Iowa, TCF National Bank in Sioux Falls, S.D., and First National Bank of Winnsboro in Winnsboro, Texas.