Bank regulator signals crackdown on law-breaking executives

In testimony prepared for Thursday’s hearing before the Senate Banking Committee, Comptroller of the Currency Thomas Curry revealed that his office is considering enacting regulatory changes "that would enhance our ability to take removal and prohibition actions against bank officers, directors, and employees that engage in violations of the BSA (Bank Secrecy Act)."

Curry’s testimony follows a tense hearing before the panel last month, when Sen. Elizabeth Warren (D-Mass.) lashed out at Curry and other regulators, demanding answers about their enforcement measures.

"The question I want to ask is how tough you are," Warren said during the Feb. 14 hearing. "Tell me a little bit about the last few times you've taken the biggest financial institutions on Wall Street all the way to trial."

This time around, Curry’s prepared remarks focused heavily on steps that could be taken against BSA violators. Curry said the statute already provides the Office of the Comptroller of the Currency (OCC) with authority to issue an order of removal of bank officials who knowingly violate the law.

The OCC is now exploring whether codifying that authority in a formal rule would aid those actions, he said, adding that the measure would also put potential wrongdoers on notice that they could be barred.

Still, Thursday's hearing proved to be as heated as the last, with Warren and other regulators accused the regulators of merely slapping violators on the wrist, instead of pursuing more aggressive enforcement actions.