OCC issues November report of enforcement actions

The Office of the Comptroller of the Currency has released enforcement actions recently taken against financial institutions it supervises and individuals now or formerly associated with such financial institutions.

• A 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 had failed to correct previously reported BSA problems.
• A 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.
• 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. [Editor's Note: See also the Federal Reserve Board's Cease and Desist Order against Industry Bancshares, Inc. in "Federal Reserve enforcement actions against bank and holding company," in yesterday's Top Stories.]
• A 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.
• A 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.
• An 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.