Enforcement actions relating to anti-money laundering rules and the Bank Secrecy Act were a prominent theme in the Office of the Comptroller of the Currency's monthly round-up of orders issued from late August through September.
1st Century Bank (FTCY) in Los Angeles was ordered to strengthen its defenses against money laundering and financial crime activities in a September cease-and-desist order. The $480 million-asset 1st Century must hire a third party consultant to review its suspicious activity monitoring, complete a plan to ensure compliance with the Bank Secrecy Act, appoint a compliance committee and maintain a full-time Bank Secrecy Act officer, among other requirements.
TD Bank (TD) in Wilmington, Del., was hit with a $37.5 million civil money penalty for failing to report suspicious activity on accounts belonging to a law firm owned by Scott Rothstein. Rothstein was convicted of spearheading a $1.2 billion Ponzi scheme in 2010. TD Bank will pay a total of $52 million in fines from the OCC and other regulators for violating the Bank Secrecy Act in connection with the scheme, American Banker reported last month.
The now-defunct Saddle River Valley Bank in Montclair, N.J., was ordered to pay a $4.1 million civil money penalty for failing to properly monitor its relationships with currency exchange houses known as casas de cambio. Regulators accused Saddle River of failing to promptly file more than 190 reports of suspicious activity between 2009 and April 2011.
Although the $120 million-asset Saddle River was acquired by Center Bancorp in Union, N.J., in 2012, Center Bancorp did not assume liabilities for the OCC's inquiry. The bank's holding company, Saddle River Valley Bancorp, is responsible for paying regulatory fines related to the casas de cambio, which come to a total of $8.2 million between the OCC, the Financial Crimes Enforcement Network and the U.S. Attorney's Office in New Jersey.
The OCC also issued other orders unrelated to Bank Secrecy Act issues. The First National Bank of Sullivan, based in Sullivan, Ill., entered into a formal agreement to clean up its lending practices. The $65 million-asset company agreed to improve its credit underwriting practices, develop problem loan workout plans for criticized assets and maintain an adequate allowance for loan and lease losses. It must also ensure that its credit risk ratings are consistent with regulatory criteria and produce a capital plan covering at least the next two years.
The $510 million-asset United Community Bank in Lawrenceburg, Ind., was ordered to pay a civil money penalty of $1,925 for violating the Flood Disaster Protection Act.
Chad Ward, vice president of Lee County Bank & Trust at Fort Madison, Iowa, was ordered to pay $2,000 for failing to allow regulators unrestricted access to the bank's records.
The OCC also terminated enforcement actions against 11 lenders: First National Banking Company in Ash Flat, Ark.; Heritage First Bank in Rome, Ga.; Mutual Federal Bank in Chicago; A.J. Smith Federal Savings Bank in Midlothian, Ill.; United Fidelity Bank in Evansville, Ind.; Mutual Federal Savings Bank in Sidney, Ohio; Valley National Bank in Tulsa, Okla.; Nextier Bank in Evans City, Pa.; Paragon National Bank in Memphis; Golden Bank in Houston; and the First National Bank of Niagara in Wisconsin.