OCC Issues No Bank Orders, Focuses July Enforcement on Individual Misconduct

Key Takeaways

• Focus on Individual Misconduct: The OCC issued no enforcement actions against banks in July but barred four former bank employees for serious misconduct, reinforcing its emphasis on personal accountability.
• Insider Risk in the Spotlight: Cases involved theft from ATMs, unauthorized customer withdrawals, fraudulent use of internal systems, and criminal convictions, highlighting persistent insider threats.
• Senior Leadership Not Immune: A former general counsel at Webster Bank was prohibited from future banking roles following a conviction for bank fraud and illegal monetary transactions.
• Controls and Culture Matter: The enforcement actions underscore the need for strong internal controls, employee oversight, and a robust culture of ethics and compliance.
• Remediation Recognized: The OCC terminated a 2020 cease and desist order against GN Bank after determining the bank had met all regulatory requirements.

Deep Dive

July was quiet on the institutional front, but the Office of the Comptroller of the Currency (OCC) didn’t let misconduct slide. Instead of targeting banks, the regulator issued a number of prohibition orders aimed squarely at former bank employees who crossed the line, from check fraud and ATM manipulation to outright theft and criminal convictions.

The OCC’s latest enforcement bulletin reads less like a list of policy violations and more like a case study in insider risk. In total, four individuals were barred from participating in the banking industry, each tied to misconduct that cost institutions thousands, and, in one case, over $100,000.

One of the cases that stands out more involves Cricel Santamaria, a former client service representative at Webster Bank. Santamaria exploited internal systems to access check images, which were then sold illegally, ultimately causing six-figure losses for the bank. That kind of abuse of access rights is exactly the sort of insider threat that compliance teams spend years building controls to detect and prevent.

Webster Bank also saw its former general counsel, James P. Blose, hit with a prohibition order, this time stemming from a criminal conviction for bank fraud and illegal monetary transactions. His case stands out as a reminder that no level of seniority is immune to enforcement.

Meanwhile, at a TD Bank branch in Pennsylvania, Lacey Ann Henry was found to have made over $41,000 in unauthorized cash withdrawals from customer accounts. In Oregon, Alonso Missael Gonzalez Ibarra of JPMorgan Chase stole roughly $36,000 from ATMs and doctored the records to hide it.

Although the OCC didn’t announce any new actions against banks themselves, it did close the book on an old one, terminating a 2020 cease and desist order against GN Bank in Chicago. That order had been tied to governance, credit risk, and capital planning issues, but regulators said the bank had now met all requirements.

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