OCC Announces Enforcement Actions for November 2024

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today released enforcement actions taken against national banks and federal savings associations (banks), and individuals currently and formerly affiliated with banks the OCC supervises.

The OCC uses enforcement actions against banks to require the board of directors and management to take timely actions to correct the deficient practices or violations identified. Actions taken against banks are:

• Cease and Desist Order against Clear Fork Bank, N.A., Albany, Texas, for violations of law and unsafe or unsound practices related to the Bank Secrecy Act (BSA)/anti-money laundering. The bank failed to correct previously reported BSA problems. (Docket No. AA-ENF-2024-82). This order supersedes, in part, the OCC’s formal agreement with the bank dated February 16, 2021 (Docket No. AA-SO-2021-3), which the OCC has terminated. (Docket No. AA-SO-2024-81)
• Formal Agreement with Hiawatha National Bank, Hager City, Wisconsin, for unsafe or unsound practices, including those relating to liquidity oversight, annual credit review processes, loan risk ratings, independent loan review, and allowance for credit losses. (Docket No. AA-CE-2024-32)
• Cease and Desist Orders against The First National Bank of Shiner, Shiner, Texas; Bank of Brenham, N.A., Brenham, Texas; and The First National Bank of Bellville, Bellville, Texas, three subsidiary banks of Industry Bancshares, Inc., Industry, Texas, resolving the Notices of Charges filed on January 2, 2024, in which the OCC alleged, among other things, that each bank engaged in unsafe or unsound practices relating to an investment strategy concentrated in long-term securities that exposed each bank to excessive interest rate risk. The orders also address unsafe or unsound practices relating to corporate governance and, for Bank of Brenham, N.A., and The First National Bank of Bellville, credit administration practices. (Docket No. AA-SO-2023-55, AA-SO-2023-56, and AA-SO-2023-57)
• Formal Agreement with The National Bank of Coxsackie, Coxsackie, New York, for unsafe or unsound practices, including those related to corporate and risk governance, strategic and capital planning, liquidity risk management, interest rate risk management, the audit function, and internal controls, and for violations, including those relating to loans to insiders. (Docket No. AA-NE-2024-76)

The OCC uses enforcement actions against an institution-affiliated party (IAP) to deter, encourage correction of, or prevent violations, unsafe or unsound practices, or breaches of fiduciary duty. Enforcement actions against IAPs reinforce the accountability of individuals for their conduct regarding the affairs of a bank. The term “institution-affiliated party,” or IAP, is defined in 12 USC 1813(u) and includes bank directors, officers, employees, and controlling shareholders. Orders of Prohibition prohibit an individual from any participation in the affairs of a bank or other institution as defined in 12 USC 1818(e)(7). Actions taken against IAPs are:

• Personal Cease and Desist Order against Dean A. Lafrentz, former Senior Vice President at Midstates Bank, N.A., Council Bluffs, Iowa, for falsifying collateral information in a borrower’s loan file, leading the bank to believe it had a surplus, rather than a deficit, of eligible collateral when considering the borrower's loan extension request. (Docket No. AA-ENF-2024-91)
• Order of Prohibition against Clarice Saw, former Financial Advisor at a New York, New York, branch of Citibank N.A., Sioux Falls, South Dakota, for obtaining a power of attorney over an elderly bank customer under false pretenses, using the power of attorney to open new accounts, and misappropriating the customer’s funds. (Docket No. AA-ENF-2024-85)

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All OCC public enforcement actions taken since August 1989 are available for download by viewing the searchable enforcement actions database at https://apps.occ.gov/EASearch.

Related Link

• Enforcement Action Types