OCC 98-32
Subject: Civil Money Penalties
Description: Interagency Statement
Date:     July 24, 1998

TO:  Chief Executive Officers and Compliance Officers of all
     National Banks, Department and Division Heads, and all
     Examining Personnel

Attached is a copy of the "Interagency Policy Regarding The
Assessment of Civil Money Penalties" that the Office of the
Comptroller of the Currency (OCC) has adopted.  The revised
policy statement specifies factors that the federal financial
institutions regulatory agencies should take into consideration
in deciding whether, and in what amounts, civil money penalty
assessment proceedings should be initiated.  The policy is
effective immediately.

The revised policy statement supersedes the 1980 "Interagency
Policy Regarding the Assessment of Civil Money Penalties" by the
federal financial institutions regulatory agencies.  The revised
policy statement does not affect the OCC's civil money penalty
issuance in the OCC's Policies and Procedures Manual (PPM-5000-7).

The Federal Financial Institutions Examination Council (FFIEC)
Task Force on Supervision, acting under delegated authority, has
recommended that the OCC, the Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation, the
Office of Thrift Supervision, and the National Credit Union
Administration, adopt the revised policy statement.  The revised
policy statement:

     (1)  Specifies the factors that the agencies should take
into consideration in deciding whether, and in what amounts, to
initiate civil money penalty proceedings;

     (2)  Eliminates references to interagency coordination of
civil money penalty proceedings, because such coordination is
addressed in a separate interagency policy (FFIEC, Revised Policy
Statement on "Interagency Coordination of Formal Corrective
Action by the Federal Bank Regulatory Agencies");

     (3)  Eliminates references to the statutes authorizing the
agencies to initiate civil money penalty proceedings or the
authority pursuant to the statutes; 

     (4)  Eliminates references to the agencies' rules of
practice and procedure for civil money penalty proceedings; and

     (5)  Specifies that the amount of a civil money penalty may
be greater than the economic gain in order to deter future
misconduct.  



_____________________________
Leann G. Britton
Senior Deputy Comptroller
for Bank Supervision Operations

Attachment
Interagency Policy Regarding The Assessment of
Civil Money Penalties by The Federal Financial
Institutions Regulatory Agencies

     This supervisory policy provides general guidance concerning
the criteria used by the Federal financial institutions
regulatory agencies (agencies) in the assessment of civil money
penalties under statutes that require consideration of the five
following factors in setting the amount of fines: [NOTE: See
generally 12 U.S.C.  1786(k)(2)(G) and 1818(i)(2)(G). ] 

     (1) Size of financial resources; 
     (2) Good faith; 
     (3) Gravity of the violation; 
     (4) History of previous violations; and
     (5) Other factors that justice may require. 

     The principles set forth in this policy apply to penalties
assessed both by consent and through formal enforcement
proceedings.

     The agencies generally are authorized, under these statutes,
to assess civil money penalties for violations of:  
     (1) Any law or regulation;  
     (2) Any final or temporary order, including a cease and
desist, suspension, removal, or prohibition order; 
     (3) Any condition imposed in writing in connection with the
grant of any application or other request; 
     (4) Any written agreement; and 
     (5) Regulatory reporting requirements.  

     Under certain circumstances, the agencies may also assess
fines for unsafe or unsound practices and breaches of fiduciary
duty.  

     In determining the amount and the appropriateness of
initiating a civil money penalty assessment proceeding under
statutes requiring consideration of the above-mentioned five
statutory factors,  [NOTE:Some federal laws authorizing the
Federal financial institutions regulatory agencies to assess
fines, such as the civil money penalty provisions of section
102(f) of the Flood Disaster Protection Act of 1973, as amended,
42 U.S.C.  4012a(f), and section 21B of the Securities Exchange
Act of 1934, 15 U.S.C.  78u-2, do not require the consideration
of the five statutory factors. ] the agencies have identified the
following factors as relevant:   

     (1)  Evidence that the violation or practice or breach of
fiduciary duty was intentional or was committed with a disregard
of the law or with a disregard of the consequences to the
institution;
     (2)  The duration and frequency of the violations,
practices, or breaches of fiduciary duty;
     (3)  The continuation of the violation, practice, or breach
of fiduciary duty after the respondent was notified or,
alternatively, its immediate cessation and correction;
     (4)  The failure to cooperate with the agency in effecting
early resolution of the problem;
     (5)  Evidence of concealment of the violation, practice, or
breach of fiduciary duty or, alternatively, voluntary disclosure
of the violation, practice or breach of fiduciary duty;
     (6)  Any threat of loss, actual loss, or other harm to the
institution, including harm to the public confidence in the
institution, and the degree of such harm;
     (7)  Evidence that a participant or his or her associates
received financial gain or other benefit as a result of the
violation, practice, or breach of fiduciary duty;
     (8)  Evidence of any restitution paid by a participant of
losses resulting from the violation, practice, or breach of
fiduciary duty;
     (9)  History of prior violation, practice, or breach of
fiduciary duty, particularly where they are similar to the
actions under consideration;
     (10)  Previous criticism of the institution or individual
     for similar actions;
     (11)  Presence or absence of a compliance program and its
     effectiveness;
     (12)  Tendency to engage in violations of law, unsafe or
unsound banking practices, or breaches of fiduciary duty; and
     (13)  The existence of agreements, commitments, orders, or
conditions imposed in writing intended to prevent the violation,
practice, or breach of fiduciary duty.

     The agencies will give additional consideration in cases
where the violation, practice, or breach causes quantifiable,
economic benefit or loss.  In those cases, removal of the benefit
or recompense of the loss usually will be insufficient, by
itself, to promote compliance with statutory and regulatory
requirements.  The penalty amount should reflect a remedial
purpose and should provide a deterrent to future misconduct.

     The agencies intend these factors to provide guidance on the
appropriateness of a civil money penalty, in a manner consistent
with the statutes authorizing such an action.   This policy does
not preclude any agency from considering any other matter
relevant to the civil money penalty assessment.