The Office of the Comptroller of the Currency (OCC) has revised its civil money penalty (CMP) manual and will begin using the revised manual on January 1, 2023.  The manual establishes general policies and procedures for the OCC’s assessment of CMPs. 

The OCC’s general CMP authority is provided by 12 U.S.C. Sec. 1818(i), which classifies CMPs into three tiers based on the severity of the actionable conduct and level of culpability.  The statute also sets maximum CMP amounts that the OCC can assess for each day the actionable conduct continues.  The OCC uses the manual’s institution CMP matrix and institution-affiliated party (IAP) CMP matrix to quantify the degree of severity of violations, unsafe or unsound practices, or other actionable conduct.  The matrices provide for consideration of various statutory factors set forth in 12 U.S.C. Sec. 1818(i)(2)(G) and assessment factors set forth in the 1998 FFIEC Interagency Policy on CMPs. 

The matrices only apply to the assessment of tier 1 and tier 2 CMPs.  They do not apply to the assessment of tier 3 CMPs which, as described in the manual, are assessed “only in the most severe cases that have a substantial impact on the federal banking system.”  The OCC describes the matrices as “only guidance” and indicates that “they do not reduce the CMP process to a mathematical equation and are not a substitute for sound supervisory judgment.”  The OCC also notes that “[i]n some cases, consistent with the final statutory factor in 12 U.S.C. 1818(i)(2)(G), [‘such other matters as justice may require,’] it may be appropriate to depart from the matrices to reach a fair and equitable result that achieves the agency’s supervisory objectives.”

The OCC’s key revisions to the manual consist of the following:

• The mitigating factors in the institution CMP matrix (Appendix A) are revised to consist of self-identification, remediation/corrective action, and restitution.  Previously, the listed factors were good faith before notification, full cooperation after notification, and restitution, if applicable.
• The scoring weights given to the revised mitigating factors are greater than the scoring weights given to the previous mitigating factors.
• The table titled “Suggested Action Based on Total Matrix Score and Total Assets of Bank” that is to be used in conjunction with the institution CMP matrix is revised to create a single size category for banks with assets up to $250 million and to create narrower size categories for banks with more than $5 billion in assets.  For example, for banks with total assets of $5 billion to $100 billion, the revised table has 3 size categories while the previous table had 2 size categories.  In addition, the revised table has 3 size categories for banks with total assets over $100 billion while the previous table put all banks with total assets over $100 billion in the same size category.
• The revised table also provides for 19 point increments in the total matrix score ranges to which a suggested maximum CMP applies, with the lowest suggested maximum CMPs applying to a total matrix score of 41-60 and the highest suggested maximum CMPs applying to a total matrix score of 141 or more.  The previous table provided for 29 point increments in the total matrix score ranges to which a suggested maximum CMP applied, with the lowest suggested maximum CMPs applying to a total matrix score of 41-70 and the highest suggested maximum CMPs applying to a total matrix score of 161 or more. 
• The revised table also increases many of the suggested maximum CMPs.  For example, in the revised table, a total matrix score of 140 will produce a maximum suggested CMP of $400 million for banks with total assets over $1 trillion.  Under the previous table, the same score would have produced a maximum suggested CMP of $150 million.
• In its discussion of the matrix factor of loss or harm to consumers resulting from violations of consumer laws or to the public resulting from Bank Secrecy Act violations, the revised manual adds guidance on weighing “public harm but no quantifiable loss to specific individual consumers.”  Examiners are advised to use their judgment to determine the level of harm to the public as “minimal,” “moderate,” or “substantial,” based on the scope and severity of the violation.  Examiners are also advised that in redlining cases, there is  a presumption “that the harm is substantial because redlining represents a failure to lend to minority customers on a systematic basis.”

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