The US Board of Governors of the Federal Reserve System issued a cease-and-desist order against a large US financial institution.  The order requires the institution to utilize its resources to ensure compliance with consent orders issued by other US federal financial regulators.  The order also requires the institution to submit written plans to its applicable Federal Reserve Bank that are designed to further enhance board-level oversight and governance of the institution and further improve the institution’s compliance and operational risk management program.  These plans must be approved by the relevant Federal Reserve Bank and are subject to third-party review once implemented.  In addition, the institution may not grow until the requirements of the cease-and-desist order are satisfied, absent specific Federal Reserve Board approval.  Concurrently with the release of the cease-and-desist order, the Federal Reserve Board sent letters addressed to the institution’s board of directors, its former lead independent director, and its former Chair describing governance deficiencies identified by the Federal Reserve Board.  The Federal Reserve Board press release accompanying the publication of the order also noted upcoming changes in the composition of the institution’s board of directors.

View the Federal Reserve Board announcement.