trending Market Intelligence /marketintelligence/en/news-insights/trending/9ckevblhllacn77qodcojw2 content esgSubNav
In This List

OCC enforcement actions: Former Merchants Bank of California execs get fined


Banking Essentials Newsletter: 23rd August edition


Banking Essentials Newsletter: 9th August Edition


Navigating Industry Level Credit and Market Risks in the Light of Slow Growth and Interest Rate Hikes


Kensho Launches Word Error Rate Calculator

OCC enforcement actions: Former Merchants Bank of California execs get fined

The Office of the Comptroller of the Currency on May 17 announced a number of enforcement actions in the banking sector.

The following list excludes actions previously covered by S&P Global Market Intelligence and those that do not meet criteria for news coverage. Click here to view SNL's full database of enforcement actions against U.S. banks and thrifts.

Civil money penalty orders/prohibition orders

The OCC levied penalties against Carson, Calif.-based Merchants Bank of California NA's former chairman, president and CEO Daniel Roberts and former executive vice president and director Rodrigo Garza. Both of them consented to the issuance of the orders without admitting or denying wrongdoing.

Roberts was hit with a civil money penalty of $175,000. He allegedly allowed a currency dealer to circumvent the bank's account opening procedures, including customer due diligence and enhanced due diligence procedures, according to the OCC.

Garza was ordered to pay a civil money penalty of $70,000. He allegedly entered into lending relationships with a bank director both in his personal capacity and through an entity he owned and controlled. Merchants Bank of California's code of ethics policy explicitly prohibited each of the aforementioned lending relationships.

In addition, Roberts and Garza have been prohibited by the OCC from participating in any manner in the conduct of the affairs of any insured depository institution, among others. The OCC has already fined Merchants Bank of California's Susan Cavano, Jane Chu and Philip Scott.

The OCC on May 1 issued two civil money penalty orders against Wilmington, Del.-based PNC Bank NA. One of the civil money penalty orders required the bank to pay $15 million, as the bank had been allegedly involved in deceptive acts or practices. According to the OCC, the bank offers an overdraft protection transfer program, whereby the bank's customers can avoid the standard overdraft fee by linking another bank account to their deposit account for the purpose of paying overdrafts. Between August 2010 and April 2017, customers who used an online process to enroll in the overdraft protection transfer program and who elected to use a PNC-issued credit card as the protecting account were advised that the overdraft protection would become effective no later than the next business day. However, according to the OCC, the program could take up to three business days to be effective for these customers.

The other civil money penalty order required PNC Bank to pay a civil money penalty of $207,245, due to alleged violations of the Flood Disaster Protection Act.

PNC Bank's ultimate parent is PNC Financial Services Group Inc.

Formal agreement

First National Bank of Sedan on April 17 entered into a formal agreement with the OCC, due to the bank's alleged engagement in unsafe or unsound banking practices relating to its board and management oversight, credit administration, credit risk management and loan growth. The regulator ordered the bank to form a compliance committee, consisting of at least three directors, of which no more than one member shall be an employee or controlling shareholder of the bank or any of its affiliates.