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On November 29, the OCC released a revised Policies and Procedures Manual relating to the assessment of civil money penalties (“CMP Matrix”), which will be effective as of January 1, 2023. The CMP Matrix is a reference guide for the OCC’s decision making process in evaluating penalties in response to violations of laws, regulations, and conditions imposed in writing. It replaces the prior version released in November 2018, and revises or expands certain guidelines, including:
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Continue Reading OCC Revises Policies and Procedures for Civil Money Penalties

On September 7, Acting Comptroller of the Currency, Michael Hsu, discussed the long-term threats to trust in banking in remarks at the TCH + BPI Annual Conference. Hsu provided updates on key priorities at the OCC, including the impact of “fintechs and big techs” over their digitalization of banking through the advancement of crypto (we discussed Hsu’s previous remarks on crypto here and here). Hsu highlighted the OCC’s position of a “careful and cautious” approach to crypto. In doing so, he referred to Interpretive Letter 1179, which clarifies that national banks and federal savings associations should not engage in certain crypto activities unless they are able to “demonstrate, to the satisfaction of its supervisory office, that [they have] controls in place to conduct the activity in a safe and sound manner” (we discussed Letter 1179 in a previous blog post here). Hsu noted that the federally regulated banking system has been largely unaffected by the collapse of several crypto platforms because, at least in part, of the OCC’s careful and cautious approach.
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Continue Reading OCC Highlights Focus on Crypto and Bank-FinTech Partnerships, Anticipates Stricter Scrutiny Going Forward

On May 24, the acting Comptroller of the Currency, Michael Hsu remarked at the DC Blockchain Summit 2022 about his observations on the “deep” vulnerabilities of cryptocurrency in light of the recent market volatility and other events in the crypto economy.  Hsu emphasized three vulnerabilities in particular:…
Continue Reading OCC Acting Comptroller: Recent Crypto Events Provide a “Wake-Up Call,” “Opportunity to Reset and Recalibrate”

On May 17, the FDIC and the CFPB took parallel actions to combat the misuse of  the name or logo of the FDIC and deceptive representations about deposit insurance.  The FDIC approved a final rule implementing its statutory authority to prohibit any person or organization from making misrepresentations about FDIC deposit insurance or misusing the FDIC’s name or logo.  The CFPB followed suit by releasing Consumer Financial Protection Circular 2022-02 providing that company’s likely violate the CFPA’s prohibition on deception acts or practices if they misuse the name or logo of the FDIC or engage in false advertising or make misrepresentations to consumers about deposit insurance, regardless of whether such conduct (including the misrepresentation of insured status) is engaged in knowingly.
Continue Reading FDIC and CFPB Take Action to Protect Against Misrepresentations about FDIC Insured Status and Misuse of Name and Logo

On April 8, the acting comptroller of the currency, Michael J. Hsu, discussed many aspects of stablecoins (we previously discussed the President’s Working Group report on stablecoins and Hsu’s comments here). In his speech at the Georgetown University Law Center, Hsu remarked that stablecoins are a “hot topic” among policymakers and posed three considerations that speak to the architecture of stablecoins.
Continue Reading Acting Comptroller Discusses Architecture of Stablecoins

On March 17, the OCC and FinCEN issued civil monetary penalties against a federal savings bank for “willfully” failing to meet minimum compliance program requirements and shoddy suspicious transaction reporting. The consent orders read like a veritable “how not to” for reviewing anti-money laundering alerts.
Continue Reading OCC and FinCEN Issue $200 Million in Penalties for BSA-AML Violations

On February 8, the House Financial Services Committee held a hearing titled, “Digital Assets and the Future of Finance: The President’s Working Group on Financial Markets” to consider legislative recommendations from the President’s Working Group (PWG) report on stablecoins (we previously discussed the report in an earlier Consumer Finance & FinTech Blog post here).    …
Continue Reading House Financial Services Committee Focuses on PWG Stablecoin Report

On December 16, 2021, the Office of the Comptroller of the Currency (“OCC”) and the Financial Crimes Enforcement Network (“FinCEN”) issued civil monetary penalties against a Texas community bank for violations of the Bank Secrecy Act (“BSA”).  The consent orders read like a veritable “how not to” for reviewing anti-money laundering alerts.
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Continue Reading OCC and FinCEN Issue $9 Million in Penalties for BSA-AML Violations

On November 18, the Chief Counsel of the Office of the Comptroller of the Currency (OCC) issued a fourth interpretive letter (Letter 1179) regarding whether it is permissible for national banks and federal savings associations to engage in certain cryptocurrency, distributed ledger, and stablecoin activities.  The letter clarifies ambiguities in the previous three letter including  the authority of a bank to engage in certain cryptocurrency activities and the authority of the OCC to charter a national trust bank.
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Continue Reading OCC Chief Counsel Clarifies Bank Authority to Engage in Crypto

On November 23, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency (“banking agencies”) released a joint statement recognizing that the emerging crypto-asset sector presents potential opportunities and risks for banking organizations, their customers, and the overall financial system.
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Continue Reading Banking Agencies Provide Crypto-Asset Roadmap as a Result of Interagency “Policy Sprints”

On August 27, the Federal Reserve, FDIC, and OCC jointly published guidance on the types of due diligence community banks should engage in when contemplating arrangements with financial technology companies or FinTechs.  While the diligence guidance is voluntary, the banking agencies suggest that community banks should conduct due diligence with respect to FinTechs in six key areas:  (i) business experience and qualifications, (ii) financial condition, (iii) legal and regulatory compliance, (iv) risk management and controls, (v) information security, and (vi) operational resilience.  The guidance then provides subcategories for due diligence within each category, and provides relevant considerations for the bank for each subcategory, and potential sources of information.  The subcategories are as follows:
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Continue Reading Banking Agencies Release Due Diligence Guidance on Community Bank-FinTech Relationships