Financial Services Enforcement Action Tracker Q1 2018

Q1 2018 SUMMARY: 

The number of regulatory enforcement actions increased 7% from Q4 2017 to Q1 2018 and was driven primarily by an increase in activity from the  Federal Reserve Bank (Fed). Sixty-seven percent of enforcement actions were issued by the five major federal agencies, with 11 from the Fed, 10 from the Federal Deposit Insurance Corporation (FDIC), seven from the Department of Justice (DOJ), four from the Office of the Comptroller of the Currency (OCC), and none from the Consumer Financial Protection Bureau (CFPB). Compared to Q4 2017, the FDIC, Fed, and DOJ all experienced an increase in actions, while the CFPB and OCC activity dropped. State or local regulators were involved in a total of 13 actions and maintained the top spot for the fourth straight quarter.




  • No actions were issued by the CFPB in the first quarter of 2018 — this is the first instance of no new actions from a regulator since the inception of this publication.

  • Forty-eight total actions were levied against financial institutions by federal, state, and local regulators in the first quarter, which is a 26% decrease compared to Q1 2017, but up 7% since last quarter. Two hundred fifty-eight total actions have been issued over the past five quarters, the most in a single quarter being the 65 actions issued in Q1 2017, where there was still some overlap between the current and previous administrations.

  • The main driver of actions was again state and local regulators, which were involved with 13 actions, or 27% of all actions. State activity, which increased 18% in the period, continues to step up to fill the void of declining CFPB activity. 

  • The Fed had 11 actions in the quarter. This is the most actions from the Fed in a single period observed over the past five quarters and up 83% from the previous quarter.

  • Regulators most frequently used Settlements and Civil Money Penalties to enforce regulatory requirements, with a total of 33 actions composing 69% of the 48 total Q1 2018 actions. The next most commonly used method of enforcement was Formal Agreement/Consent Order, with 10 instances accounting for 21% of the quarter’s 48 actions.

  • Thirteen actions in the quarter were related to servicing or origination of closed-end mortgage loans, with an additional three actions related to securitized mortgage products.

  • Bank Secrecy Act (BSA) and anti-money laundering rules-related violations were the area of law that was cited the most during the quarter, with a total of 13 actions. This is the first time in the past five quarters reviewed where Unfair, Deceptive, or Abusive Acts or Practices violations have not been the most frequent. There was also increased focus on enforcement of Regulation E: Electronic Fund Transfer Act and Regulation X: Real Estate Settlement Procedures Act, which had three and two related actions in Q1 2018, respectively, after no action was observed in Q4 2017.

  • Improper mortgage loan practices remained the source of highest amount of associated monetary fines, with over $23.1 billion in the past five quarters. Improper mortgage loan practices also accounted for the highest amount of fines in Q1, with $2.8 billion, or 63% of total fines. This was followed by violations related to the BSA, which totaled $1.2 billion, or 28% of the total, which is the highest amount of BSA-related fines observed for a single period in the past five quarters.

Special thanks to contributors Caitlin Cremin and Siwen Tang. 

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