Office of Thrift Supervision December 3, 2009 

Department of the Treasury 

Regulatory Bulletin 

RB 18-3b 

Handbook: Examination 

Subject: Enforcement Actions Section: 080

Enforcement Policy Statement on Civil Money Penalties 

Summary: This Regulatory Bulletin sets forth the Office of Thrift Supervision’s (OTS) policies 

governing the assessment of civil money penalties (CMPs). Included with the Bulletin is a new 

general CMP matrix form and instructions identifying the factors considered by OTS in deciding 

whether a CMP should be imposed, and if so, in what amount. This Bulletin supersedes and 

replaces Regulatory Bulletin 18-3a, dated July 30, 1993. 

For Further Information Contact: Your OTS Regional Office or Susan Chomicz, Deputy Chief 

Counsel for Enforcement, Office of Thrift Supervision, Washington, D.C. , (202) 906-7966. 

Regulatory Bulletin 18-3b 

I. Introduction 

The assessment of CMPs is one of the enforcement tools available to OTS. OTS assesses CMPs 

to ensure the safety and soundness of savings associations and the industry’s compliance with 

applicable laws, rules, and regulations. A CMP is particularly appropriate to remove the 

incentive for financial gain from misconduct, and to deter further misconduct involving a 

particular savings association and similar abuses elsewhere in the industry. 

This policy statement briefly describes the statutory framework for civil money penalties, the 

factors that should be considered in the decision to assess a CMP for a violation, and the 

procedure for making that decision. Attached to this Bulletin are (1) a general CMP matrix form 

and instructions (Appendix A) and (2) a reporting CMP matrix form (Appendix B). OTS uses 

these forms as guidance in considering whether to assess CMPs and in determining the amount 

of such CMPs. The 13 assessment factors, which the Federal Financial Institutions Examination 

Council (FFIEC) recommended that the banking agencies consider in its June 3, 1998 revised 

policy statement on the Assessment of CMPs, are built into the forms and provide the basis for 

recommended actions or CMPs. 

The policies and procedures discussed in this Bulletin and the CMP matrix forms and 

instructions are guidelines for the use of OTS, its staff and agents. These guidelines do not 

create any substantive or procedural rights enforceable at law or in any administrative 

proceeding. The CMP matrix forms are intended to cause CMPs to be levied in a consistent and 

equitable manner. The CMP matrix forms are, however, offered only as guidance and do not 

Office of Thrift Supervision Page 1 
Regulatory Bulletin 18-3b

Page 2 Office of Thrift Supervision 

reduce the CMP process to a mathematical equation. Accordingly, the CMP Matrix forms 

should not be a substitute for sound supervisory judgment. Individual cases may possess 

characteristics that remove them from the matrix or warrant a course of action different than 

suggested by the CMP Matrix forms. OTS’s discretion in such instances is in no way limited by 

the CMP Matrix forms. 

II. Statutory CMP Scheme 

General Civil Money Penalty Statute 

The general civil money penalty statute is set forth in Section 8(i) of the Federal Deposit 

Insurance Act (FDIA), 12 U.S.C. § 1818(i)(2), and establishes three tiers of ascending penalties. 

In addition to establishing the three tiered structure, the general civil money penalty statute also 

provides for the manner in which OTS assesses and collects civil money penalties. See, 12 

U.S.C. § 1818(i) (2) (E) and (I). The inflation adjusted dollar amount of CMPs that may be 

assessed under each of the three tiers is set forth in 12 C.F.R. § 509.103. 

Tier 1 CMPs up to $7,500 may be assessed against an institution-affiliated party (IAP), as 

defined in 12 U.S.C. § 1813(u), for violations of any: 

• Statute or regulation; 

• Final or temporary order; 

• Condition imposed in writing in connection with the grant of any application or other 

request by the institution; or 

• Formal agreement. 

Tier 2 CMPs up to $37,500 may be assessed against an IAP for: 

• Violations identified as a basis for Tier 1 CMPs; 

• Reckless unsafe or unsound practices; or 

• Breaches of fiduciary duties 

that: 

• Are part of a pattern of misconduct; 

• Cause or are likely to cause more than a minimal loss to the institution; or 

• Result in pecuniary gain to the IAP. 

Tier 3 CMPs up to $1,375,000 may be assessed against an IAP for knowing: 
Regulatory Bulletin 18-3b

Office of Thrift Supervision Page 3 

• Violations of law, regulation, orders, conditions imposed in writing, or formal 

agreements; 

• Unsafe or unsound practices; or 

• Breaches of fiduciary duties. 

Which knowingly or recklessly cause: 

• Substantial loss to the institution; or 

• Substantial gain to the IAP. 

Other Civil Money Penalty Statutes 

Flood Insurance Act

The Flood Insurance Act, 42 U.S.C. § 4012a (f), requires OTS to assess CMPs of up to $385 per 

day (up to a maximum yearly amount of $135,000) against any savings association found to have 

a pattern or practice of committing violations of 12 C.F.R. Part 572, mandatory flood insurance 

escrow requirements, notice requirements under 42 U.S.C. 4014a, or force placed flood 

insurance requirements. 

The agency should assess and collect penalties imposed under these provisions in the manner 

provided in subparagraphs (E), (F), (G), and (I) of the general civil money penalty statute. 

IAPs participating or engaging in violations of the Flood Insurance Act may be assessed personal 

CMPs under Section 8(i) of the FDIA. 

Affiliate Refusal to Cooperate

OTS is authorized by HOLA to assess CMPs up to $7,500 against an association if any affiliate 

of the association refuses to permit any examiner of OTS to conduct an examination, or refuses 

to provide any information required to be disclosed in the course of any examination. 12 U.S.C. 

1467(d). Such CMPs may be assessed for each day that such refusal continues and are to be 

collected in the manner provided in the general civil money penalty statute. 

Holding Company Act 

OTS is authorized by HOLA to assess CMPs up to $32,500 against any company that violates, or 

any person who participates in a violation, of any provision of the Holding Company Act or any 

regulation or order issued pursuant thereto. 12 U.S.C. 1467a (i) (2) and (3). Such CMPs may be 

assessed for each day the violation continues and are to be collected in the manner provided in 

subparagraphs (E), (F), (G), and (I) of the general civil money penalty statute. 
Regulatory Bulletin 18-3b

Page 4 Office of Thrift Supervision 

Change in Bank Control Act

OTS may assess civil money penalties against persons who violate any provision of the Change 

in Bank Control Act or any regulation or order issued there under. See, 12 U.S.C. 1817(j) (16). 

Such penalties are in the amounts provided under and assessed according to the three-tier 

structure and other provisions in the general civil money penalty statute. 

Non-Certified Appraisers 

OTS is authorized by 12 U.S.C. § 3349(b) to assess civil money penalties against associations 

that seek, obtain, or give money or any other thing of value in exchange for the performance of 

an appraisal by a person the association knows is not a State-certified or State-licensed appraiser, 

as defined in 12 U.S.C. § 3345, in connection with a federally-related transaction, as defined in 

12 U.S.C. § 3350. The type of federally-related transaction and the type of appraiser required are 

described in 12 U.S.C. §§ 3342 and 3343. Such penalties are assessed according to the three tier 

structure and other provisions contained in the general civil money penalty statute. 

Home Mortgage Disclosure Act 

OTS is authorized to assess civil money penalties for violations of the Home Mortgage 

Disclosure Act. See, 12 U.S.C. § 2804. Such penalties are to be assessed in the amounts 

provided under and according to the three-tier structure and other provisions of the general civil 

money penalty statute. 

Late or Inaccurate Reports of Condition, Holding Company Reports or Certified Statement of 

Assessment Base 

OTS is authorized by the Home Owners’ Loan Act (HOLA) to assess civil money penalties 

against associations, holding companies and their subsidiaries that fail to submit or to publish 

any report within the time frame required by OTS or that submit or publish any false or 

misleading report or information. See, 12 U.S.C. § 1464(v) and 12 U.S.C. § 1467a(r). A similar 

penalty structure governs the failure to make a timely or accurate submission of a certified 

statement of assessment base. See, 12 U.S.C. § 1817(c) (5). 

These statutory CMP provisions contain a separate three-tiered structure that OTS must apply 

when making an assessment under those sections. The attached Reporting Tier Matrix applies to 

civil money penalties assessed under these statutes. 

Tier 1 reporting CMPs may be assessed where, despite procedures reasonably adapted to avoid 

inadvertent and unintentional error, and as a result of such error, a savings association fails to 

submit or publish a required report, information, or certified statement within the specified time; 

submits or publishes any false or misleading report, information, or certified statement; or 

inadvertently transmits or publishes any report or certified statement that is minimally late. 

Tier 2 CMPs may be assessed where a savings association does not have procedures to avoid 

inadvertent and unintentional error and, as a result of such error, fails to submit or publish a 

required report, information, or certified statement within the specified time, or submits or 

publishes any false or misleading report, information or certified statement. 
Regulatory Bulletin 18-3b

Office of Thrift Supervision Page 5 

Tier 3 CMPs may be assessed if the savings association knowingly or with reckless disregard for 

accuracy submits or publishes a false or misleading report, information or certified statement. 

CMPs may be assessed for each day that a violation continues. The agency should assess and 

collect CMPs imposed under these provisions in the manner provided in subparagraphs (E), (F), 

(G), and (I) of the general civil money penalty statute. 

Security Measures

Pursuant to 12 U.S.C. § 1884, OTS is authorized to assess a civil money penalty of up to $110 

per day against savings associations for violations of any rule or regulation regarding minimum 

standards with respect to the installation, maintenance, and operation of security devices and 

procedures, reasonable in cost, to discourage robberies, burglaries, and larcenies and to assist in 

the identification and apprehension of persons who commit such acts. 

CMPs may be assessed for each day that a violation continues. CMPs imposed under these 

provisions are to be assessed and collected by the agency in the manner provided in 

subparagraphs (E), (F),(G), and (I) of the general civil money penalty statute. 

III. Consideration and Assessment of CMPs 

A CMP against an IAP or association is an effective deterrent to violations of law, regulation, 

orders, conditions imposed in writing, and formal agreements, unsafe or unsound practices and 

breaches of fiduciary duty. A CMP is particularly appropriate to deter and address continuing or 

repetitive violations of law, regulation, conditions imposed in writing, unsafe or unsound 

practices and breaches of fiduciary duty and the violation of any order or formal agreement. For 

violations of outstanding orders or formal agreements, a new order or formal agreement should 

not be issued unless the violations of the previous order or formal agreement are addressed 

through CMPs or otherwise. 

The length of time that a violation, particularly a violation of an order or formal agreement, 

remains uncorrected is a factor in determining CMP amounts. Accordingly, a CMP encourages 

the timely correction of violations, unsafe or unsound practices and breaches of fiduciary duty. 

New management does not toll the obligation to comply with laws or regulations or outstanding 

order or formal agreement. A CMP is an effective deterrent to others from engaging in the type 

of misconduct for which a CMP was assessed. 

OTS may use its CMP authority as it deems appropriate to achieve its objectives and fulfill its 

statutory and regulatory responsibilities. A CMP assessment action may be undertaken 

independently or in conjunction with other supervisory or enforcement actions and procedures. 

A CMP assessment action also may be undertaken jointly with other regulatory agencies, such as 

the Department of Justice or Financial Crimes Enforcement Network (FinCEN). 

IV. CMP Matrix Form 

The general and reporting CMP matrix forms are tools that indicate the relative degree of 

severity of violations of law, reckless unsafe or unsound practices and breaches of fiduciary duty. 

The CMP matrix forms provide guidance in determining whether to assess, and, if so, the 
Regulatory Bulletin 18-3b

Page 6 Office of Thrift Supervision 

appropriate amount of, the CMP. The general CMP matrix form (General Matrix) applies to the 

assessment of Tier 1 and Tier 2 CMPs. The General Matrix does not apply to the assessment of 

Tier 3 CMPs. Tier 3 CMPs should be assessed only in the most severe cases having a substantial 

impact on an association or the thrift industry. 

V. Procedure Regarding Determination Whether to Assess a Civil Money Penalty 

Examination and supervisory staff should evaluate violations of law, regulation or order, 

violations of a condition imposed in writing or a written agreement, breaches of fiduciary duty, 

or unsafe or unsound practices for possible assessment of CMPs. The decision whether to assess 

CMPs should be based upon application of the appropriate CMP Matrix form to the identified 

misconduct, as well as consider the overall enforcement and supervisory strategies and 

objectives of the OTS. 

If serious, continuing or repetitive violations of law and regulation, orders, conditions imposed in 

writing, or formal agreements, reckless unsafe, unsound practices or breaches of fiduciary duty 

or failure to file timely and accurate reports are discovered (including publication of false 

information), examination and supervisory staff shall use the appropriate CMP Matrix form and 

instructions to make an appropriate CMP recommendation. Where there are changes in directors 

and management, consideration should be given to the time period such persons were in place 

and an evaluation of their actions and conduct during that time period. The replacement of prior 

management and directors with new management and directors does not eliminate the need to 

make an appropriate CMP review and determination. 

—John E. Bowman 

Acting Director
CMP MATRIX Appendix A

("Misconduct" refers to violations, unsafe and unsound practices and breaches of fiduciary duty.) 

0 1 2 3 4 ASSIGNED 

LEVEL 

WEIGHT 

FACTOR 

FINAL 

FIGURE 

Intent No Should have Known Clear Intent 5 

Pecuniary Gain or 

Other Benefit to IAP 

or Related Interest 

No 

Indirect Benefit to 

IAP or Related 

Interest 

Direct Benefit to 

IAP or Related 

Interest 4 

Previous 

Administrative 

Action or Criticism 

None 

Previous 

Criticism for 

Similar 

Instance(s) of 

Misconduct 

Violation or 

Criticism on Point 

Cited in Exam or 

Visit Report 

MOU or 

Supervisory Letter on Point 

8(a), C&D, 

Agreement, Condition in Writing or Prior CMP 

Assessment on Point 

3 

History None 

Unrelated Prior 

Instances of 

Misconduct 

At Least One 

Similar Instance 

of Prior 

Misconduct 

Several Similar 

Instances of Prior 

Misconduct 

Frequent Similar 

Instances of Prior 

Misconduct 2 

Loss or Risk of Loss 

to Institution 

No Loss and 

No Risk of 

Loss 

No Actual Loss 

or Risk of only a 

Minimal Loss1

Minimal Actual 

Loss or Risk of 

Moderate Loss2

Moderate Actual 

Loss or Risk of 

Substantial Loss3

Substantial Actual or 

Potential Loss 6 

Number of Instances 

of Misconduct at 

Issue 

None One to Three Four to Six Seven to Ten Over Ten 2 

Duration of 

Misconduct Prior to 

Notification or 

Discovery 

0 to 3 Months Over 3 to 6 

Months 

Over 6 to 12 

Months 

Over 12 to 18 

Months Over 18 Months 2 

Continuation after 

Notification 

Instance(s) of 

Misconduct 

Ceased Prior to 

Notification 

Instance(s) of 

Misconduct 

Ceased 

Immediately 

Upon Notification 

Instance(s) of 

Misconduct 

Continued for a 

Short Period of 

Time After 

Notification 

Instance(s) of 

Misconduct 

Continued for Long 

Period of Time After 

Notification 

Instance(s) of 

Misconduct Still 

Continuing 3 

Concealment None 

Acted Without 

Proper Authority 

Purposely 

Complicated Transaction to Make 

it Difficult to 

Uncover 

Active Concealment 5 

Impact Other than 

Loss 

No Impact on 

Institution or 

Banking 

Industry 

Moderate Impact 

on Institution. 

No Impact on Banking 

Industry. 

Substantial Impact 

on Institution. No 

Impact on Banking Industry 

Moderate Impact on 

Banking Industry or 

on Public Perception 

of Banking Industry 

Substantial Impact 

on Banking Industry or on Public 

Perception of 

Banking Industry 

6 

Loss or Harm to 

Securities Holders or 

Consumers 

(Securities or 

Consumer Laws 

Only) 

No Loss and 

No Harm 

No Loss or 

Minimal Harm 

Minimal Loss or 

Moderate Harm 

Substantial Loss or 

Harm 5 

SUBTOTAL 1

Restitution No Restitution Partial Restitution 

Complete Restitution Under 

Compulsion 

Complete 

Restitution 

Immediately After 

Loss or Misconduct 

Brought to Attention 

Complete 

Restitution 

Voluntarily, Before Institution or 

Examiner 

Uncovered Loss 

2 

Good Faith (Prior to 

Notification) 

None Should have 

Known Better 

Unintentional 

Misconduct 3 

Full Cooperation 

(After Notification) 

None 

Limited 

Disclosure and 

Cooperation under 

Compulsion 

Limited Voluntary 

Disclosure and 

Cooperation 

Full Disclosure and 

Cooperation under Compulsion 

Full Voluntary 

Disclosure and 

Cooperation 2 

SUBTOTAL 2

TOTAL 

(SUBTRACT 2 FROM 1)

 

1 The term “minimal loss” is not defined, but it has been suggested that amounts of $50,000 or less are considered minimal. 2 The term “moderate loss” is not defined, but it has been suggested that amounts greater than $50,000 but less than $100,000 are considered moderate. 3 The term “substantial loss” is not defined, but it has been suggested that amounts exceeding $100,000 are considered substantial.
_______________________________________________________________________ 

Recommended Action/Penalty Ranges Based on CMP Matrix Point Totals 

_______________________________________________________________________ 

Point Total Suggested Action

0-30 Consider not making referral 

31-40 Consider sending a Supervisory Letter or Reprimand 

41-50 Consider Reprimand or CMP from $1,000 to $5,000 

51-60 Consider CMP assessment from $5,000 to $10,000 

61-80 Consider CMP assessment from $10,000 to $25,000 

81-100 Consider CMP assessment from $25,000 to $75,000 

101-120 Consider CMP assessment from $75,000 to $125,000 

over 120 Consider CMP assessment greater than $125,000 

_______________________________________________________________________ 

Section 8(i)(2) CMP Authorities and Amounts 

_______________________________________________________________________ 

Citation Amount4 Basis

12 U.S.C. § 

1818(i)(2)(A) 

TIER 1 

$7,500 Institution or IAP violates: 

(a) any law or regulation; 

(b) any final or temporary order; 

(c) any written condition; or 

(d) any written agreement with the OTS. 

12 U.S.C. § 

1818(i)(2)(B) 

TIER 2 

$37,500 Institution or IAP: 

(a) violates law, regulation, order, written condition or agreement; 

(b) recklessly engages in an unsafe or unsound practice in conducting 

the affairs of an institution; or 

(c) breaches any fiduciary duty, which violation, practice or breach: 

AND such violation, practice or breach: 

(a) is part of a pattern of misconduct; 

(b) causes or is likely to cause more than a minimal loss to such 

institution; or 

(c) results in a pecuniary gain or other benefit to such party 

12 U.S.C. § 

1818(i)(2)(C) 

TIER 3 

$1,375,000 Institution or IAP knowingly: 

(a) violates any law, regulation, order, written condition or agreement; 

(b) engages in any unsafe or unsound practice in conducting the affairs 

of such depository institution; or 

(c) breaches any fiduciary duty; 

AND by reason of such conduct, knowingly or recklessly: 

(a) causes a substantial loss to the institution or 

(b) a substantial pecuniary or other benefit to such party.

 

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 Amount reflects inflation adjustments made to 12 C.F.R. § 509.103 on October 27, 2008 (73 FR 53625). 

2
_______________________________________________________________________ 

Instructions and Guidelines for using the General CMP Matrix 

_______________________________________________________________________ 

The General CMP matrix is a tool to indicate the relative degree of severity of violations 

of law, reckless unsafe or unsound practices and breaches of fiduciary duty. The degree 

of severity is reflected by the severity level (from 0 to 5) assigned to the misconduct. The 

severity levels are noted at the top of each column. The CMP Matrix provides guidance 

in deciding whether a CMP proceeding should be initiated pursuant to 12 U.S.C. § 

1818(i)(2), and, if so, the appropriate amount of the CMP that should be assessed. 

The CMP matrix incorporates the 13 assessment factors recommended for consideration 

by the Federal Financial Institutions Examination Council (FFIEC) in its June 3, 1998 

policy statement on CMPs for determining the appropriateness of initiating a civil money 

penalty assessment. These factors, along with those statutorily provided, are also used in 

determining the amount of the civil money penalty. 

The CMP matrix is intended to cause CMPs to be levied in a consistent and equitable 

manner. However, this matrix and the FFIEC factors are provided solely as guides and 

do not replace sound supervisory judgment. The CMP matrix is not intended to reduce 

the CMP process to a mathematical equation as individual cases may possess 

characteristics that remove them from the matrix. The OTS's discretion and supervisory 

judgment is in no way limited by the CMP matrix. 

1. Number of Matrices - As a general rule, the following guidelines should be used in 

determining how many matrices should be completed: 

a. One CMP matrix per person should be completed for all violations, reckless 

unsafe and unsound practices or breaches of fiduciary duty. Where there are 

several violations, practices, or breaches of duty included in one matrix, the 

highest severity level applicable to any of the violations, practices or breaches of 

duty should be recorded for each factor on the Matrix. Thus, if a single director 

approved a loan in violation of Regulation O, another loan in violation of State 

lending limitations, and engaged in reckless unsafe practices, only 1 Matrix 

should be completed for that director, with the highest severity level applicable to 

either of the violations and any of the unsafe practices recorded for each Matrix 

factor. 

b. One Matrix should be completed for a group of persons with similar culpability. 

Thus, if 6 directors approved a loan in violation of Regulation O, another loan in 

violation of State lending limitations, and engaged in reckless unsafe practices, 

and all were equally culpable, only 1 Matrix should be completed for the 6 

directors. However, if 2 directors were more culpable than the other 4 directors, a 

separate Matrix should be completed for those 2 directors. 

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2. Application to Tier 1 and Tier 2 CMPs - If an examiner discovers serious violations, 

unsafe or unsound practices, or breaches of fiduciary duty, he or she should apply the 

matrix to determine the recommended level of action. The examiner need not 

initially determine whether the violation, practice or breach provides a basis for a tier 

1 or tier 2 CMP. Adjustments have been built into the matrix which should 

automatically result in the assessment of higher CMPs for tier 2 cases. If the CMP is 

based upon an unsafe or unsound practice or breach of fiduciary duty, staff should 

consult with the Regional Enforcement Counsel or Regional Counsel to ensure that 

the applicable criteria are met for a tier 2 or 3 CMP. 

3. Definitions - One may use the following definitions as a guide in using the Matrix: 

a. Institution-affiliated party (IAP) - (1) any director, officer, employee or 

controlling shareholder (other than a savings association holding company) of an 

insured depository institution, (2) any person who has filed or is required to file a 

change-in-control, (3) any shareholder, consultant, joint venture partner, or other 

person who participates in the institution’s affairs, or (4) any independent 

contractor (including any attorney, appraiser, or accountant) who knowingly or 

recklessly participates in violations of law or regulation, breaches of fiduciary 

duty, or unsafe or unsound practices, which caused or are likely to cause more 

than a minimal financial loss to, or a significant adverse effect on, the institution. 

b. Unsafe and unsound practice - one in which there has been some conduct, 

whether act or omission, which is contrary to accepted standards of prudent 

banking operation, and which might result in exposure of the savings association 

or its shareholders to abnormal risk or loss. An unsafe or unsound practice may 

be considered reckless if it evidences disregard of, or indifference to, the 

consequences of the practice, even though no harm may be intended. 

c. Fiduciary duty - a duty of confidence and trust, which includes a high degree of 

good faith. The fiduciary duties for directors are discussed in detail in the OTS 

Directors Guide. For example, savings association officers and directors have a 

fiduciary duty to protect the savings association’s assets, further the best interests 

of the savings association, and not place their interests above those of the savings 

association. 

d. Violations - includes violations of law, regulation, final orders, conditions 

imposed in writing, and written agreements. 

e. Condition imposed in writing – one that is issued in connection with a decision 

on a corporate application. Such decisions typically state that the condition is "a 

condition imposed in writing within the meaning of 12 U.S.C. § 1818(b)" or 

similar language. 

4
f. Knowingly – the respondent knew he/she was committing the act and did not act 

mistakenly or accidentally. It does not require the respondent to have known 

specifically that the conduct was wrong. 

g. Recklessly – the respondent acted with disregard of, or indifference to, the 

consequences of an act or omission. Such disregard or indifference should be an 

extreme departure from the standards of ordinary care and conduct that the 

respondent is expected to follow. It includes clear neglect for, or plain 

indifference to, requirements imposed by law, regulation or agency orders of 

which the respondent should have been aware. Negligence by itself does not 

constitute recklessness. By contrast, a conscious decision to act negligently could 

be reckless. 

4. Pecuniary Gain or Other Benefit to IAP - In assessing this factor, the monetary gain 

or other benefit may be to the IAP who committed the violation, recklessly engaged 

in an unsafe or unsound practice, or who breached any fiduciary duty, or to that IAP’s 

family members or related interests, including organizations with which the IAP is 

involved or affiliated (church, charities, sports league teams, etc.). Misconduct that 

results in additional compensation, such as increased bonuses or perquisites, may be 

considered as pecuniary gain or other benefit. 

5. Previous administrative action or criticism - Under severity level 1, "similar instances 

of misconduct" could refer to prior criticisms for misconduct or violations of the same 

statute or regulation, e.g., a previous lending limit violation and a current lending 

limit violation, a previous violation of a Section 23A provision and a current violation 

of a different Section 23A provision. This could also refer to violations that are 

similar in nature, e.g., a previous violation of the aggregate lending limit under 12 

CFR Part 215 and a current violation of lending limits under 12 C.F.R. § 560.93. 

6. History - Under severity level #2, the reference to “similar violation” has the same 

meaning as the reference to “similar violation” used in the Previous Administrative 

Action or Criticism factor explained above. 

7. Loss - In assessing this factor, “potential loss” refers to any time at which the savings 

association was in danger of sustaining a loss. Accordingly, if the violation caused a 

possible loss in its first month, but posed no risk of loss in the second month, the 

savings association experienced a potential loss which falls with this category. The 

amount of loss should be the amount prior to any recovery, restitution or blanket bond 

or insurance coverage. 

8. Continuation - The reference to “notification” in this factor includes notice of the 

violation, practice or breach by the OTS, other regulatory agencies, external auditors, 

internal auditors or other parties whose responsibilities include providing the savings 

association and/or its subsidiaries with information about its operations. In addition, 

notification includes discovery of the misconduct by the institution. 

5
6

9. Concealment - This factor pertains to the concealment of a violation, practice or 

breach from the OTS, the savings association’s board of directors or management, or 

its internal and external auditors. Falsification of records is considered active 

concealment. 

10. Impact other than loss - In assessing this factor, it is appropriate to consider any 

possible negative impact or harm to the savings association, other than loss. For 

example, a violation of law involving insider abuse may result in adverse publicity for 

the institution, possibly causing a run on deposits and affecting the savings 

association's liquidity. Any extraordinary costs or expenses incurred to investigate 

and/or resolve misconduct (e.g., a forensic audit or a third party review) may be 

considered under this factor. 

11. Loss or Harm to Securities Holders or Consumers - This factor only applies in cases 

involving violations of securities laws, rules, or regulations applicable to stock 

institutions or holding companies (where securities holders have incurred loss or are 

otherwise harmed) or consumer banking laws, orders, agreements or conditions, 

unsafe or unsound practices, or breaches of duty. 

12. Good faith (prior to notification) - In assessing a person's good faith, the general 

focus should be on facts and circumstances that occurred prior to notification of the 

violation, reckless unsafe or unsound practice, or breach of fiduciary duty by the 

OTS, other regulatory agencies, external auditors, internal auditors, or other parties 

whose responsibilities include providing the savings association or its subsidiaries 

with information about its operations. 

13. Full Cooperation (after notification) - In assessing this factor, the general focus 

should be on facts and circumstances that occurred after notification of the violation, 

practice or breach by the OTS, other regulatory agencies, external auditors, internal 

auditors or other parties whose responsibilities include providing the savings 

association and/or its subsidiaries with information about its operations. 

Payment – A respondent will be expected to pay the CMP at the time of consent to 

the assessment of the CMP. The form of payment will be certified check or cashiers 

check only.