Category Archives: Office of the Comptroller of the Currency (OCC)

The Federal Financial Institution Regulators’ New Guidance on Filing Suspicious Activity Reports

by Jonathan J. Rusch

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Photo courtesy of the author

Under the Bank Secrecy Act and regulations thereunder, financial institutions have long been required to file Suspicious Activity Reports (SARs) on a wide range of possible criminal activities with federal financial institution regulators.  Over the past two decades, criminal and civil enforcement authorities have imposed BSA-related financial penalties in numerous cases for failure to file or untimely filing SARs.[1]  At the same time, many in the financial sector have complained about the burdensomeness and questioned the value of SAR preparation.[2]

On October 9, the five federal financial institutions regulators (i.e., the Financial Crimes Enforcement Network, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency) jointly issued a document titled “Frequently Asked Questions Regarding Suspicious Activity Reporting Requirements” (SAR FAQs).[3]  The SAR FAQs stated that “[t]he answers to these FAQs clarify regulatory requirements related to SARs to assist financial institutions with their compliance obligations while enabling institutions to focus resources on activities that produce the greatest value to law enforcement agencies and other authorized government users of Bank Secrecy Act (BSA) reporting.”[4]

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OCC Affirms Regulated Entities Can Engage in Crypto and Stablecoin Activities

by Arthur S. Long, Parag Patel, Pia Naib, and Deric Behar 

Left to right: Arthur S. Long, Parag Patel, Pia Naib, and Deric Behar (photos courtesy of Latham & Watkins LLP)

In a break from restrictive Biden-era policies, OCC-supervised banks may now engage in crypto activities without supervisory nonobjection, potentially opening new avenues for innovation.

On March 7, 2025, the Office of the Comptroller of the Currency (OCC) reaffirmed that national banks and federal savings associations (collectively, banks) may participate in a range of cryptocurrency activities, including crypto custody, certain stablecoin activities, and participation in independent node verification networks.

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Cryptoasset Developments: Banking Regulators Reversing Anti-Crypto Stance

by Kevin S. Schwartz, David M. Adlerstein, and Ledina Gocaj

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Left to right: Kevin S. Schwartz, David M. Adlerstein, and Ledina Gocaj (photos courtesy of Wachtell, Lipton, Rosen & Katz)

In a significant shift, the Office of the Comptroller of the Currency (OCC) recently issued an interpretive letter empowering national banks to make their own business decisions related to cryptoasset products and services. The OCC guidance, which rescinds its prior-approval requirement for national banks to engage in cryptoasset activities, comes on the heels of an announcement that the FDIC is reassessing its own supervisory approach after disclosing “pause” letters that it had previously sent to 24 banks interested in crypto-related activities. Together, these developments signal an abrupt end to the bank regulators’ arbitrarily imposed ban on banks engaging in cryptoasset-related activities, an important step forward that we had endorsed.

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TD Bank Pleads Guilty to Bank Secrecy Act and Money Laundering Conspiracy Violations – Part II: The Regulatory Agency Resolutions

by Jonathan J. Rusch

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Photo courtesy of the author

On October 10, the U.S. Department of Justice, the Financial Crimes Enforcement Network (FinCEN), the Office of the Comptroller of the Currency (OCC), and the Federal Reserve Board (FRB) announced an extraordinary set of coordinated criminal and civil resolutions involving TD Bank, N.A. and its parent company TD Bank US Holding Company (collectively TD Bank) for systematic and years-long violations of the Bank Secrecy Act (BSA) and money laundering.  The first post on the TD Bank resolutions addressed only the Department of Justice’s criminal resolution with TD Bank.[1] This post will focus on the bank’s resolutions with the regulatory agencies, and identify certain lessons to be learned from this case.

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“Operation Chokepoint 2.0”: De-Banking Policies and the Adverse Use of Reputational Risk in Bank Supervision

by Stephen T. Gannon, Max Bonici, Elizabeth Lan Davis, and Kristal Rovira

Photos of the authors

Left to Right: Stephen T. Gannon, Max Bonici, Elizabeth Lan Davis, and Kristal Rovira (photos courtesy of Davis Wright Tremaine LLP)

How subjective supervisory standards suppressed innovation and damaged innovators.

“The power to regulate—in addition to the power to tax—is the power to destroy.”

Peter Wallison, Judicial Fortitude (2018)

As we have previously noted, we expect that the second Trump Administration will be significantly more favorable to crypto than the Biden Administration, especially with the recent appointment of David Sacks as the Administration’s “Crypto Czar.” We anticipate that in short order the new Administration will address “de-banking,” a regulatory practice that has vexed the digital asset industry—and banking in general—over the last several years. In this context, “de-banking” means canceling banking services to crypto entities and individuals associated with them or crypto activities. It is a practice that has been sharply criticized and has become even less comprehensible as the digital asset industry has matured and embraced (indeed, has sought) reasonable regulation. In the last several days the attention paid to this issue has increased sharply as a result of comments by Marc Andreessen on the Joe Rogan podcast.

Regrettably, the de-banking problem is not new. De-banking crypto is simply the latest variation of regulators using vague and amorphous standards to supervise bank conduct through the subjective lens of what the federal banking agencies call “reputational risk.”

Below we discuss how we got here and some ways forward.

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TD Bank Pleads Guilty to Bank Secrecy Act and Money Laundering Conspiracy Violations and Agrees to Pay More Than $3.09 Billion in Criminal and Civil Penalties for “Systemic Breakdown” in Compliance Policies, Procedures, and Processes

by Jonathan J. Rusch

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Photo courtesy of the author

In any corporate compliance program, chief compliance officers must be mindful that their programs are not guaranteed to maintain consistent levels of funding from year to year.  Factors such as expanding or contracting business operations, declining business conditions, or external events such as recessions or COVID may require various year-to-year adjustments in a compliance program’s staffing levels and internal controls operations.[1]

Even so, it is essential that senior management in any company or financial institution recognize and accept the fact that at all times, the compliance programs in their enterprise must be adequately resourced and empowered to function effectively.[2] What a company’s senior leadership may not do, under any circumstances, is to make decisions that, over time, systematically starve critical compliance programs of resources essential to the effectiveness of those programs.

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The Conviction of Sam Bankman-Fried – Yes, Fraud, but also Regulatory Arbitrage

by Maria T. Vullo

Maria T. Vullo (Photo courtesy of the author)

The much-anticipated jury verdict,[1] convicting former FTX CEO Sam Bankman-Fried (SBF) of seven felonies, after less than five hours of deliberations, demonstrates the strength of the prosecution’s case and that juries have no patience for financial fraud.  While many reports correctly note that fraud is at the core of the FTX/SBF case, the verdict also sends a clear message that regulatory arbitrage should not be tolerated.

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Federal Reserve Imposes $186 Million in Civil Money Penalties Against Deutsche Bank for Violations of OFAC and AML Orders and Danske Bank-Related Failures

by Jonathan J. Rusch 

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Photo courtesy of the author

Within the past year, federal law enforcement and regulatory agencies have repeatedly signaled that recidivist violations of law by corporate entities are likely to result in substantial penalties.  Those signals include recidivism-specific policy statements, such as the Justice Department’s revision of its Corporate Enforcement Policy[1] to reflect its “more holistic approach to corporate recidivism”[2] and the Office of the Comptroller of the Currency’s (OCC’s) recent revisions of its Policies and Procedures Manual to address banks’ failure to correct persistent weaknesses.[3]

But those signals also include specific enforcement actions that carried substantial financial penalties, such as the Justice Department’s $315 million criminal penalty against ABB[4] and $206.7 million criminal penalty against Ericsson[5], and the Consumer Financial Protection Bureau/OCC $250 million enforcement actions against Bank of America for illegal activity in its consumer business.[6]

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Key Takeaways from Interagency Guidance on Banks’ Risk-Management of Fintech Relationships

by Margaret E. Tahyar and Ledina Gocaj

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Left to right: Margaret E. Tahyar and Ledina Gocaj (Photos courtesy of Davis Polk & Wardwell LLP)

On June 6, 2023, the Federal Reserve, FDIC and OCC (the Agencies) released final interagency guidance on banking organizations’ management of risks associated with third-party relationships.  Davis Polk’s memo on the guidance is linked here.  Our key takeaways:

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Flurry of Announcements by the Federal Reserve on Crypto Activities

by Michael Held, Tiffany J. Smith, Franca Harris Gutierrez, Cory C. Hansen, and Andy V. Reynolds

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(photos courtesy of WilmerHale) From left to right: Michael Held, Tiffany J. Smith, Franca Harris Gutierrez, Cory C. Hansen, and Andy V. Reynolds

A flurry of activity on January 27 signaled continued skepticism from the Federal Reserve of crypto-asset-related activities generally and open, public or decentralized networks in particular.

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