OCC Enters Agreement with Bank Over Alleged Unsafe and Unsound Practices

The OCC recently entered an agreement with a federal savings and loan association to ensure the safety and soundness of the bank’s compliance after the OCC alleged that the bank had engaged in various unsafe or unsound practices, including those related to TILA.

The OCC alleged that the unsafe and unsound practices that the bank engaged in related to management oversight, earnings, IT management, sensitivity to market risk, consumer compliance, and violation of laws such as TILA and the Flood Disaster Protection Act.  As a result, the bank is considered to be in “troubled condition” and no longer meets the definition of an “eligible savings association” under OCC regulations.

Under the terms of the agreement, the bank is required to, amongst other things, develop and submit a written consumer compliance program that includes internal controls to ensure compliance with consumer protection laws and develops policies and procedures covering all consumer protection laws that applies to appropriate bank personnel and is tailored to the bank’s practices.  The bank is also required to develop a satisfactory IT control program and a program to assess and manage the risks posed by third-party relationships.