On July 16, the OCC released its list of enforcement actions for July, which include a consent order, issued June 16, against a Texas-based bank in connection with its conversion to a national bank charter, addressing purported deficiencies in its BSA/AML compliance program that allegedly resulted in violations of law or regulation. The order requires the bank’s board to submit quarterly written progress reports to the OCC on corrective actions taken under each article of the order and to maintain oversight of a revised BSA/AML compliance program, including a comprehensive risk assessment, enhanced independent testing, and management by a qualified compliance officer with full autonomy over the program. It further requires a revised customer due diligence program to verify customer identity and risk-rate account holders, an enhanced suspicious activity monitoring and reporting program, and improved OFAC compliance, including enhanced screening procedures and periodic training.

The consent order stemmed from a prior cease-and-desist order the bank consented to on August 29, 2024, with the Dallas Fed and the Texas Department of Banking over alleged deficiencies in the bank’s oversight of foreign correspondent banking and virtual currency customers and its compliance with the BSA/AML and OFAC regulations. In May, the OCC conditionally approved the bank’s application to convert from a state charter to a national bank charter, on the condition that the bank enter into a consent order with remedial provisions substantively similar to the 2024 order within three business days of the conversion’s effective date. Because the bank was already under the 2024 order, the Dodd-Frank Act would ordinarily have barred the conversion, but the OCC was permitted to approve it anyway after giving the Fed’s Board of Governors and the Texas Department of Banking written notice of the conversion and a plan to address the underlying supervisory concerns, and neither regulator objected within 30 days. The bank consummated its conversion to a national bank on June 12.