The OCC recently released revisions to its Civil Money Penalties (CMP) manual, effective January 1, 2023. The CMP manual guides how the regulator considers aggravating and mitigating factors when assessing potential fines.
The key takeaways from these changes are that the OCC will:
1. Place significantly more weight on 2 new mitigating factors, namely:
2. Consider business restrictions such as limiting growth, as a core part of penalties
3. Have more discretion to levy bigger fines with new CMP tiers
Below, we summarize the OCC’s thinking behind these changes, and how Cable can help you be in the best position to respond.
The OCC recognizes two new, more heavily weighted mitigating factors of “Self-identification” and “Remediation/Corrective Action.” These replace the previous factors of “Good faith before notification” and “Full cooperation after notification.”
Full credit for these factors requires the following:
The OCC also added language indicating that penalties for BSA violations and other unquantifiable public harms will be based on the violations’ scope and severity - this reinforces the importance of finding and remediating issues as fast as possible.
The OCC's revisions make clear that it may use growth and business restrictions, such as those imposed on Blue Ridge Bank, to penalize institutions that have widespread or systemic issues or fail to remediate issues in a timely manner.
Simply put, compliance investments can make or break an institution's ability to survive and scale.
“The OCC will consider coupling any CMP against an institution with injunctive relief, such as business restrictions, pursuant to 12 USC 1818(b)(6), when appropriate. Such coupled relief may be appropriate when, for example, the institution has failed to make effective or sustainable progress on corrective actions despite a prior enforcement action or CMP assessment or has widespread or systemic deficiencies that require curtailing growth or expansion into new products or services. The combined impact of the CMP and business restrictions may be considered when determining the CMP amount.”
Finally, the OCC revised its suggested penalties table (see below) to include 9 tiers, as opposed to 7.
The upper tier is now much greater at over $1 trillion total assets, instead of over $100 billion, and the highest suggested penalty threshold has also increased to over $400 million instead of over $150 million.
Cable's real-time Automated Assurance enables institutions to immediately identify financial crime regulatory breaches or control failures.
🔧
Cable’s workflow tools and audit log let institutions work and document remediations more efficiently, and demonstrate proactive investigation and remediation of issues.
Cable helps institutions maximize penalty mitigating factors and avoid widespread issues that risk slowing growth on top of fines.
Contact us here today to learn more or see Cable's platform in action.
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Why Banks Must Embrace Automated Compliance TestingThe OCC recently released revisions to its Civil Money Penalties (CMP) manual, effective January 1, 2023. The CMP manual guides how the regulator considers aggravating and mitigating factors when assessing potential fines.
The key takeaways from these changes are that the OCC will:
1. Place significantly more weight on 2 new mitigating factors, namely:
2. Consider business restrictions such as limiting growth, as a core part of penalties
3. Have more discretion to levy bigger fines with new CMP tiers
Below, we summarize the OCC’s thinking behind these changes, and how Cable can help you be in the best position to respond.
The OCC recognizes two new, more heavily weighted mitigating factors of “Self-identification” and “Remediation/Corrective Action.” These replace the previous factors of “Good faith before notification” and “Full cooperation after notification.”
Full credit for these factors requires the following:
The OCC also added language indicating that penalties for BSA violations and other unquantifiable public harms will be based on the violations’ scope and severity - this reinforces the importance of finding and remediating issues as fast as possible.
The OCC's revisions make clear that it may use growth and business restrictions, such as those imposed on Blue Ridge Bank, to penalize institutions that have widespread or systemic issues or fail to remediate issues in a timely manner.
Simply put, compliance investments can make or break an institution's ability to survive and scale.
“The OCC will consider coupling any CMP against an institution with injunctive relief, such as business restrictions, pursuant to 12 USC 1818(b)(6), when appropriate. Such coupled relief may be appropriate when, for example, the institution has failed to make effective or sustainable progress on corrective actions despite a prior enforcement action or CMP assessment or has widespread or systemic deficiencies that require curtailing growth or expansion into new products or services. The combined impact of the CMP and business restrictions may be considered when determining the CMP amount.”
Finally, the OCC revised its suggested penalties table (see below) to include 9 tiers, as opposed to 7.
The upper tier is now much greater at over $1 trillion total assets, instead of over $100 billion, and the highest suggested penalty threshold has also increased to over $400 million instead of over $150 million.
Cable's real-time Automated Assurance enables institutions to immediately identify financial crime regulatory breaches or control failures.
🔧
Cable’s workflow tools and audit log let institutions work and document remediations more efficiently, and demonstrate proactive investigation and remediation of issues.
Cable helps institutions maximize penalty mitigating factors and avoid widespread issues that risk slowing growth on top of fines.
Contact us here today to learn more or see Cable's platform in action.
