Contract analysis

I. Executive Summary This memorandum provides a comprehensive legal analysis of OCC Consent Order No. OCC-2025-003 (the "Order" or the "Consent Order"), issued and effective January 15, 2025, against Belmont Ridge Bank National Association ("BRB" or the "Bank"), OCC Charter No. 48271. Calderwood & Harkness LLP ("C&H") was engaged by BRB on February 10, 2025, as successor regulatory counsel, to advise the Bank and its

II. Background and Procedural History A. Belmont Ridge Bank NA — Entity Overview Belmont Ridge Bank National Association is a national banking association chartered under the National Bank Act, 12 U.S.C. § 21 et seq., and is supervised by the OCC as its primary federal banking regulator. The Bank's key regulatory identifiers are as follows: • OCC Charter No. 48271 • FDIC Certificate No. 31845 • RSSD ID: 1247893 • Emp

III. Summary of Key Consent Order Provisions and Deadlines A. Structure of the Order The Consent Order is structured in thirteen articles, each addressing a specific area of remediation or administrative requirement. The principal substantive articles correspond to the five core deficiency categories identified in the Order: • Article I — Definitions and Scope • Article II — OFAC Sanctions Screening Remediation • Art

Article VII mandates the engagement of an independent consultant acceptable to the OCC within 30 days of the Order's effective date. This requirement has been satisfied through the engagement of Thornfield Consulting Group LLC, as discussed in Section III.D below and in the Executive Summary. Article XII — the Reservation of Rights provision — is of particular significance: it expressly provides that the Order does n

Article VII of the Consent Order requires BRB to engage an independent consultant acceptable to the OCC to conduct a comprehensive review and assessment of the Bank's BSA/AML and OFAC compliance programs and to validate BRB's remediation efforts. The engagement was required to be in place within 30 days of the Order's effective date — i.e., by February 15, 2025. This requirement has been satisfied. The key details of

IV. Analysis of Core Deficiency Category (i): OFAC Sanctions Screening Failures A. Findings The Consent Order identifies BRB's failure to screen 100% of transactions processed through its fintech BaaS channels against the Office of Foreign Assets Control sanctions lists as one of the most serious deficiencies in the Bank's compliance program. The Order's findings in this area are both specific and quantifiable, refle

V. Analysis of Core Deficiency Category (ii): SAR Filing Deficiencies A. Findings The Consent Order identifies significant deficiencies in BRB's Suspicious Activity Report ("SAR") filing program, encompassing both timeliness of filing and the accumulation of a substantial backlog of unreviewed and undispositioned suspicious activity alerts. As of the examination close date (September 2024), BRB had a backlog of appro

VI. Analysis of Core Deficiency Category (iii): CDD/EDD Failures A. Findings The Consent Order identifies widespread deficiencies in BRB's Customer Due Diligence ("CDD") and Enhanced Due Diligence ("EDD") programs, affecting approximately 47,000 high-risk customer accounts. These accounts lack adequate documentation and risk assessment necessary to satisfy BRB's regulatory obligations under the BSA and the CDD Rule.