On November 13, the Fed issued a cease and desist order against a state-chartered bank (respondent), due to alleged deficiencies in its operations and risk management practices related to Bank Secrecy Act (BSA) and anti-money laundering (AML) compliance. Effective November 13, the order mandated that the respondent takes several corrective actions to address these deficiencies, including (i) submitting a written plan to improve its BSA/AML compliance program; (ii) providing adequate resources to ensure the compliance program is aligned with the risk profile of the respondent; (iii) enhancing its customer identification program to verify customer identities; (iv) improving its customer due diligence program with risk-based policies and procedures and enhanced due diligence; and (v) developing a program to ensure the timely and accurate reporting of suspicious activity. Furthermore, respondent must engage an independent third party to review and assess its BSA/AML transaction monitoring system and provide a report with findings and recommendations. The respondent must submit progress reports every quarter and the order remains effective until it is modified or terminated by the Fed.

In its second action on the same day, the Fed, jointly with the Texas Department of Banking, issued a cease and desist order against a bank holding company (the second respondent), based on alleged deficiencies identified in its operations, including the second respondent’s ability to serve as a source of strength to the banks it owns and controls. The order required the second respondent’s board of directors to fully utilize its financial and managerial resources to support its subsidiary banks, enhance board oversight, and improve risk management practices. The second respondent must also submit plans to: (i) strengthen board oversight; (ii) enhance risk management; (iii) improve interest rate risk management; and (iv) develop an enhanced liquidity risk management program. Additionally, the second respondent must submit a strategic business plan and budget for 2025, provide cash flow projections, and submit a plan to maintain sufficient capital. The order also restricted the second respondent from declaring dividends, repurchasing shares, or incurring, increasing, prepaying or guaranteeing debt without prior approval. The second respondent must submit progress reports every quarter and the order remains effective until modified or terminated.