OCC Issues Two Orders of Prohibition Against Former Bank Employees for Embezzlement and Unauthorized

Key Takeaways

• The OCC's September 2026 enforcement release announces two Orders of Prohibition against former employees of U.S.
• Bank, N.A.
• and PNC Bank, N.A.
• for insider misconduct involving customer and bank funds.

Deep Dive

The OCC's September 2026 enforcement release announces two Orders of Prohibition against former employees of U.S. Bank, N.A. and PNC Bank, N.A. for insider misconduct involving customer and bank funds. The actions show that the OCC continues to hold individuals personally accountable and that frontline insider fraud remains a live risk. Compliance teams should use these cases to test controls over employee access to accounts and funds.

Under 12 USC 1818(e)(7), an Order of Prohibition bars an individual from any participation in the affairs of any bank or other covered institution. No new requirements are introduced, and the release sets no deadlines or compliance dates. The significance lies in the OCC's stated purpose: to deter violations, encourage correction, and reinforce individual accountability. Both individuals were former employees, which shows the OCC pursues misconduct after the person has left the institution. Prohibition orders also have lasting consequences for the individuals, who are effectively barred from the industry.

The cases involve two distinct risk patterns. The Montejano matter involves a home-based, remote employee, so it is relevant to oversight of remote and hybrid frontline staff, whose activity may be harder to supervise physically. The Troncoso matter involves unauthorized debits across multiple customer accounts, a pattern that effective transaction monitoring and customer complaint analysis should detect. Taken together, they point to weaknesses that can arise in access controls, segregation of duties, and exception reporting.

Recommended actions for compliance and risk teams:
- Review insider-threat and employee fraud monitoring, including alerts for debits, adjustments, and account maintenance by frontline staff.
- Assess controls over remote and home-based workers, such as system access, call and screen monitoring, and supervisory review.
- Confirm that processes for investigating suspected misconduct support timely Suspicious Activity Report filing and appropriate referral to the OCC.
- Verify that pre-employment screening checks for existing prohibition orders, and that employee misconduct is escalated to HR, Legal, and Security.
- Use the OCC enforcement database for ongoing screening and for training examples.

The direct financial impact is modest. However, the reputational, customer remediation, and regulatory consequences of insider fraud can exceed the losses. Institutions should expect continued OCC attention to individual accountability and internal control effectiveness.

Source: Office of the Comptroller of the Currency