OCC Tightens the Reins with November 2024 Enforcement Actions

The Office of the Comptroller of the Currency (OCC) has turned up the heat on banks and individuals flouting regulatory expectations, unveiling a slate of enforcement actions for November 2024. These measures not only aim to rectify serious lapses in compliance but also signal the OCC’s unrelenting commitment to upholding the integrity of the national banking system.

From missteps in managing interest rate risks to outright breaches of trust, the OCC’s latest actions serve as both a warning and a call to action for financial institutions and their leaders.

The OCC’s enforcement actions against banks this month read like a cautionary tale of what happens when oversight falters. Among the most notable cases:

• Clear Fork Bank: Clear Fork Bank has been grappling with Bank Secrecy Act (BSA) compliance issues for years, and the OCC finally lost patience. Despite a formal agreement in 2021, the bank failed to fix critical anti-money laundering weaknesses. The resulting Cease and Desist Order aims to force the institution to clean house on its compliance processes, underscoring the OCC’s intolerance for repeat offenders.
• Hiawatha National Bank: A small town doesn’t mean small stakes. Hiawatha National Bank found itself under scrutiny for lapses ranging from liquidity oversight to flawed credit reviews. The OCC’s Formal Agreement pushes the bank to strengthen its risk management framework—a reminder that even regional players aren’t immune to regulatory rigor.
• Industry Bancshares Trio: A trio of banks—The First National Bank of Shiner, Bank of Brenham, and The First National Bank of Bellville—operating under the umbrella of Industry Bancshares, Inc., faced a collective reckoning. The OCC slapped them with Cease and Desist Orders for risky investment strategies in long-term securities that left them overexposed to interest rate fluctuations. Governance and credit administration practices also landed two of the three banks in hot water.
• The National Bank of Coxsackie : This historic institution faced a modern dilemma: governance gaps and internal control failures. A Formal Agreement addresses issues from liquidity risk management to insider loan violations. The OCC’s action serves as a stark reminder of the stakes for banks failing to adapt to evolving regulatory expectations.

Accountability for Individuals

When bad behavior emerges within the banking system, it’s not just institutions that face consequences. This month, the OCC also held individuals accountable, reinforcing that personal responsibility is non-negotiable in the financial industry:

• Dean A. Lafrentz: Lafrentz didn’t just bend the rules—he broke them. By falsifying collateral information, he misled the bank about a borrower’s financial standing, jeopardizing its loan decision-making process. The OCC issued a Personal Cease and Desist Order, ensuring Lafrentz’s actions won’t go unchecked.
• Clarice Saw: In a disturbing breach of trust, Saw exploited an elderly client by fraudulently obtaining power of attorney and misappropriating funds. The OCC’s Order of Prohibition effectively bars her from the industry, a strong statement against financial exploitation.

The OCC’s enforcement actions this month are more than a list of penalties—they’re a wake-up call. For banks, the message is clear: governance, risk management, and compliance aren’t optional. Institutions that fall short risk not just financial penalties but reputational damage that’s far harder to repair.

For individuals, these actions drive home the stakes of personal accountability. Whether it’s manipulating loan documents or taking advantage of vulnerable clients, the OCC won’t hesitate to act.

The OCC’s November 2024 enforcement actions reveal a regulatory body unafraid to dig deep and take decisive action against mismanagement and misconduct. For the industry, the takeaway is simple: it’s not just about meeting minimum requirements; it’s about fostering a culture of integrity and accountability. As these cases illustrate, the cost of failure can be steep—and the OCC is watching.

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