OCC Enforcement Actions for April Zero In on Lending Practices & Accountability

Key Takeaways

• Deceptive VA Loan Practices: The Federal Savings Bank was cited for misleading marketing and borrower communications tied to VA-backed cash-out refinance loans that resulted in higher costs for consumers.
• Consumer Harm Identified: The OCC found that affected borrowers faced significant origination fees along with increased interest rates and monthly payments.
• Mandatory Restitution Program: The bank must engage an independent third-party consultant to identify impacted customers and oversee compensation efforts.
• Board Accountability and Oversight: The consent order places direct responsibility on the bank’s board to ensure corrective actions are implemented and sustained through ongoing reporting.

Deep Dive

The Office of the Comptroller of the Currency has released its April 2026 enforcement actions, with a consent order against The Federal Savings Bank drawing particular attention for its focus on deceptive lending practices tied to loans for veterans.

At the heart of the action is the bank’s handling of cash-out refinance loans guaranteed by the U.S. Department of Veterans Affairs. According to the OCC, the bank violated Section 5 of the Federal Trade Commission Act by engaging in deceptive acts or practices that led consumers to take out loans under misleading premises, ultimately exposing them to higher costs.

The regulator said those practices resulted in borrowers paying significant origination fees while taking on loans with increased interest rates and higher monthly payments.

Marketing That Didn’t Match the Product

The consent order builds on findings that, between 2022 and 2024, the bank’s marketing and employee communications created a distorted picture of the loans being offered.

Advertisements suggested that consumers had “available funds,” a framing that implied access to existing money rather than the need to refinance into a new loan. At the same time, certain employee statements gave the impression of a special relationship with the VA or suggested that borrowers would see improved loan terms within a defined period.

In reality, the loans were fixed-rate products, and there was no guarantee that borrowers would be able to refinance later under more favorable conditions. The OCC concluded that these representations induced consumers (many of them veterans) into loans that were more expensive than they may have expected.

Remediation and Restitution

To address the violations, the consent order requires The Federal Savings Bank to overhaul its practices and implement a structured remediation program.

The bank must cease the deceptive conduct identified by regulators and strengthen its compliance with consumer protection laws. It is also required to engage an independent third-party consultant to identify affected borrowers and oversee a restitution process. The OCC will maintain oversight of that effort, including the ability to expand its scope if needed.

Beyond restitution, the order places clear responsibility on the bank’s board to ensure corrective actions are not only implemented but sustained. Regular reporting requirements will track progress and hold leadership accountable for addressing the underlying deficiencies.

Individual Misconduct and Broader Enforcement Activity

While the consent order forms the centerpiece of the April enforcement slate, the OCC also took action against individuals, reinforcing its focus on accountability at all levels of the banking system.

The agency issued prohibition orders against a former employee of JPMorgan Chase, for embezzling more than $73,000 from customer accounts, and of a BMO Bank staffer, for making unauthorized withdrawals totaling more than $164,000 from an elderly customer. Both individuals are now barred from participating in the affairs of federally regulated financial institutions.

The OCC also terminated several prior enforcement actions, including those involving CNB Bank & Trust, Generations Bank, and JPMorgan Chase, indicating that those institutions had met the conditions of earlier orders or that the requirements were no longer applicable.

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