United States: OCC Revises CMP Policy

For the first time in over twenty years,1 the Office of the Comptroller of the Currency (OCC) has formally changed its policy governing civil money penalties (CMP) against national banks, federal savings associations, federal branches of foreign banks, and their service providers and institution affiliated parties (IAP).2

Key changes from the OCC's 1993 policy include: an explicit application of the CMP policy to service providers; a tiered approach to penalties based on the entity's total assets; the addition of CMP factors for the effectiveness of internal controls and the compliance program and for individual accountability; revised matrices for calculating CMP amounts; separate matrices for institutions and IAPs; additional guidance on the CMP factors; and increased risk weightings for certain CMP factors.

This new CMP policy formalizes many aspects of the OCC's practice for determining CMP amounts in recent years (such as total assets). The more clearly articulated standards will also provide institutions with new tools to advocate for smaller CMPs in the 15-Day Letter process, supplementing arguments based on the statutory mitigating factors. 


The federal banking agencies' primary civil money penalty authority is 12 U.S.C. §1818(i).3 This provision provides for three penalty tiers, a procedure for the assessment and collection of the CMP, and a set of mitigating factors the agencies must take into account when determining the appropriate CMP amount. The banking agencies have long evaluated CMP amounts based upon a scored matrix of factors, and the OCC last announced a CMP matrix for tier 1 and tier 2 penalties in 1993. But developments in the banking system and the OCC's approach to enforcement appear to have led the OCC to formally revise the prior policy.   

Changes to the 1993 Policy

  • Extension to Service Providers. The revised policy states that it applies to service providers. However, the scope of the OCC's CMP authority over service providers is unclear, notwithstanding the fact that the revised policy states that the OCC may assess CMPs against service providers pursuant to 12 U.S.C. § 1861 et seq. (the Bank Service Company Act) and 12 U.S.C. § 1464(d)(7). In Grant Thornton v. Office of the Comptroller of the Currency, the DC Circuit held that the OCC must prove that the independent contractor was involved in "conducting the business or affairs of [a] bank" to meet the statutory jurisdictional requirements for an enforcement action for the purposes of imposing a CMP based on an unsafe or unsound practice.4
  • CMPs based on asset size of the institution. Another change is that the CMP matrix now includes penalty tiers based on the asset size of the institution. For example, a bank with total assets of $45 million could face a $10,000 CMP with a matrix score of 45, whereas the same matrix score could lead to a $15 million CMP for a bank with total assets over $100 billion. This appears to be a recognition of what has been unofficial policy, as an institution's asset size has long appeared to have been a factor in determining CMP penalty amounts. This revision also reflects the approach of other prudential regulators, which includes an asset-size factor as an element of its CMP calculation.
  • New CMP factor for compliance management system. While the "presence or absence of a compliance program and its effectiveness" was an enumerated CMP factor in the 1998 FFIEC CMP guidance,5 it is only now being officially incorporated into the OCC's CMP matrix. This incorporation underscores the OCC's focus on risk management, especially compliance risk management.6 An effective compliance program is now doubly important because it actually can reduce the CMP in addition to increasing the likelihood of early detection and resolution of a compliance issue and any resulting customer impact.
  • Separate CMP matrices for entities and individuals. The inclusion of a new and separate CMP matrix for IAPs may suggest increased enforcement focus on IAPs by the OCC. Indeed, the policy states that "A CMP against an IAP emphasizes the accountability of individuals." This would be consistent with the broader movement across the federal government to hold individuals at financial institutions accountable for bad acts.7
  • Broader range of CMP matrix scores now subject to CMP. The OCC increased the relative factor weights of the CMP matrix such that the total possible "score" is now 200, whereas the total possible "score" under the 1993 Guidance was 172. Additionally, the suggested floor for a CMP was lowered from a 51 matrix score under the 1993 Guidance to a 41 matrix score under the revised policy. Thus, conduct that would have warranted a supervisory letter under the 1993 Guidance may warrant a CMP under the revised policy.
  • Bank Secrecy Act. This existing factor for loss or harm to the public has been expanded to reference violations of the Bank Secrecy Act. This is consistent with the continued enforcement emphasis on BSA, and the OCC's recently released additional guidance on its enforcement approach to BSA violations.8
  • Changes in relative weightings of risk factors. The risk weight factors increased for six of the existing components, declined for four of the risk factors, and stayed the same for two risk factors. The cumulative impact of these changes is to decrease the impact of mitigating factors on the CMP analysis9 and to decrease the relative weight of the impact of the violation in determining enforcement strategy.10


The revised CMP policy has been amended in such a way as to suggest that the OCC may be laying the groundwork to support increased enforcement activity, especially with respect to IAPs and service providers. The changes to the CMP matrix favor an increase in the likelihood and the amount of CMPs—under the revised policy the score threshold is lowered for considering CMPs, there is an increase in the opportunity for higher matrix scores, the potential impact of mitigating factors has been reduced, and larger CMPs are suggested for larger banks. Banks and their service providers, as well as IAPs, should ensure that they have established processes in place to quickly respond to enforcement communications from the OCC, including 15-Day Letters.

1 OCC Banking Circular 273, Civil Money Penalties (Jun. 16, 1993).
OCC Bulletin 2016-5, Revised Civil Money Penalty Policy (Feb. 26, 2016).
3 The OCC has additional CMP authority under 12 U.S.C. §93(b) (violations of chapter 2 of title 12), 12 U.S.C. §164 (call report penalties); 12 U.S.C. §504(b) (violations of certain provisions of the Federal Reserve Act), and 12 U.S.C. §4012a(f) (pattern or practice of flood insurance violations).
Grant Thornton v. Office of the Comptroller of the Currency, 514 F.3d 1328 (D.C. Cir. 2008).
5 Assessment of Civil Money Penalties, 63 Fed. Reg. 30,226, 30,227 (Jun. 3, 1998).
6 See e.g.OCC Guidelines Establishing Heightened Standards for Certain Large Insured National Banks, Insured Federal Savings Associations, and Insured Federal Branches, 79 Fed. Reg. 54,518 (Sept.11, 2014).
Memorandum from Sally Quillian Yates, Deputy Attorney General, Individual Accountability for Corporate Wrongdoing (Sept. 9,2015); see also WilmerHale Client Alert, DOJ Outlines New Policy Regarding White Collar Cases Against Individuals (Sept. 10, 2015). See alsoComplaint, The United States Department of the Treasury v. Thomas E. Haider, (S.D.N.Y. Oct. 18, 2014); see also WilmerHale Client Alert, FinCEN Assesses $1 Million Civil Penalty Against Former Chief Compliance Officer and Partners with SDNY to Initiate Injunctive Action (Jan. 5, 2015).
OCC Bulletin 2016-6, Process for Administrative Enforcement Actions Based on Noncompliance with BSA Compliance Program Requirements or Repeat or Uncorrected BSA Compliance Problems (Feb. 29, 2016).
9 Total possible mitigation score under the 1993 guidance was (-28), whereas total possible mitigation score under the revised policy is (-20).
10 The risk-weight factors for components addressing the impact of the violation (i.e. financial loss to the bank, non-financial loss to the bank, and loss to public) decreased or stayed the same, while all the other components saw an increase in their risk-weighting.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions