OCC Takes Action Against Unsafe Practices in Latest Enforcement Round

Key Takeaways

• OCC Enforcement Focus: The OCC is taking a firm stance against banks and individuals who fail to meet regulatory standards, with recent actions against institutions like Carver Federal Savings Bank, Sterling Federal Bank, and Texas Heritage National Bank.
• Accountability for Bank Employees: The OCC is not just holding banks accountable; individual employees like William Shane Garrow and Amilcar A. Sanchez have been permanently banned from the banking industry for misconduct, reinforcing the need for personal integrity.
• Wells Fargo’s Compliance Milestone: After years of corrective action, the OCC has terminated enforcement actions against Wells Fargo, marking a positive step in the bank's efforts to comply with the Gramm-Leach-Bliley Act.

Deep Dive

The Office of the Comptroller of the Currency (OCC) has stepped up its efforts this month with a new round of enforcement actions aimed at national banks, federal savings associations, and individuals in positions of authority. These actions are about fixing serious issues that could undermine the safety and soundness of the financial system.

A few banks are getting some tough love this month. These aren’t just minor tweaks to procedures, these are formal agreements, meaning the banks involved must take immediate action to address substantial shortcomings in their operations.

Carver Federal Savings Bank is one of those under fire. The OCC found problems in the bank’s strategic planning and earnings performance, which aren’t exactly small issues when it comes to financial stability. This formal agreement calls for the bank to make real changes to improve its operations and secure its financial future.

Meanwhile, Sterling Federal Bank faces scrutiny over a variety of operational failings, including its capital management and credit administration practices. Again, this isn’t about a slap on the wrist, Sterling must overhaul how it manages money and risk to avoid putting itself, or its customers, in harm’s way.

And then, last but not least, there’s Texas Heritage National Bank. The bank is facing a much broader set of problems, from risk management to violations related to audits and reports of condition. The OCC is calling on Texas Heritage to get its act together, focusing on everything from liquidity risk management to making sure it follows the law.

Holding People Accountable

It’s not just the banks themselves that are under the microscope. The OCC is also cracking down on individuals who violated their fiduciary duties. William Shane Garrow, a former private banker at BOKF in Tulsa, Oklahoma, found himself at the center of a major scandal when he misappropriated over $3 million from customers’ accounts. The OCC wasn’t about to let this slide. Garrow has been banned from participating in any future banking activities, effectively ending his career in the industry.

Similarly, Amilcar A. Sanchez, a former branch operations manager at Santander Bank in New York, was found to have embezzled $370,000 from the bank. His actions have earned him a lifetime ban from banking, reinforcing the OCC’s commitment to holding individuals accountable for their misdeeds.

On a more positive note, the OCC also wrapped up enforcement actions against Wells Fargo this month. The bank had been under the spotlight for not complying with certain aspects of the Gramm-Leach-Bliley Act (GLBA) concerning its financial subsidiaries. But after years of effort, Wells Fargo has finally met the necessary requirements, and the OCC has officially terminated the enforcement actions. It’s a sign that the bank is heading in the right direction after a turbulent period.

The bottom line? Whether it’s fixing internal processes or ensuring individuals act with integrity, the OCC is watching. And as the industry evolves, banks need to take these lessons to heart if they want to remain competitive and compliant in an increasingly complex environment.

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