You would be forgiven in thinking the Office of the Comptroller of the Currency has been solely preoccupied with JPMorgan Chase (JPM) in recent days, but the agency has disciplined three other national banks since late August, according to its monthly roundup of enforcement actions.
The National Republic Bank of Chicago, which has $1.1 billion of assets, was hit with a cease-and-desist order. It must reduce its reliance on brokered deposits to no more than 60% of its total liabilities, develop a plan to minimize credit risk and ensure that at least 11% of its total assets are readily liquid.
The First National Bank of Russell Springs in Kentucky entered into a formal agreement with the OCC. The agency said the $192 million-asset bank had violated insider trading and overdraft regulations and engaged in unsafe practices relating to loan review, credit risk, internal auditing and credit administration. Russell Springs agreed to create a comprehensive insider lending and overdraft program, review its loan-risk rating system, appoint a credit administrator and other adopt other reforms.
The OCC also issued a prompt corrective action directive to the critically undercapitalized First National Bank in Edinburg, Texas. The $3 billion-asset company had a Tier 1 leverage ratio of 2%, and total risk-based capital of 4.2%, as of June 30. First National was ordered to take action to protect its assets and provide OCC staff with full access to its books, documents and records. It must also refrain from financing the sale of foreclosed properties and from entering into new plans for investments, expansions and acquisitions.
Two individuals faced OCC orders. A former Bank of America (BAC) teller, Danielle Anderson, was banned from working at financial institutions after participating in a scheme that transferred $73,000 from legitimate customers to fraudulent accounts.
Martin Trofimuk, the former treasurer of North Shore Trust and Savings in Waukegan, Ill., was ordered to pay a $5,000 civil money penalty for faulty accounting practices that ultimately cost his employer $342,000. He is barred from holding bank positions that require him to oversee financial statements in the future.
The OCC also announced that it had terminated enforcement actions against nine lenders: The Camden National Bank in Camden, Ala.; Midsouth Bank in Dothan, Ala.; Far East National Bank in Los Angeles; CBC National Bank in Fernandina Beach, Fla.; People's Community National Bank in Bremen, Ga.; First National Bank South in Alma, Ga.; The First National Bank of Manchester in Manchester, Ky.; The National Bank of Harvey in Harvey, N.D.; and Franklin Community Bank in Rocky Mount, Va.
The OCC's actions against JPMorgan Chase, in concert with other regulators, grabbed the most headlines.
The $2 trillion-asset bank received cease-and-desist orders regarding its sworn document and collections litigation practices, identity-protection billing and compliance with the Servicemembers Civil Relief Act. The OCC also ordered JPMorgan Chase to pay two hefty civil money penalties: a $60 million fine for charging customers for identity-protection services they were not actually receiving, and a $300 million fine for the lack of trading oversight that regulators say led to the London Whale fiasco in 2012.