Contract analysis

I. Introduction and Identification of Representation This firm, Calderwood & Harkness LLP ("C&H" or the "Firm"), has been retained by Belmont Ridge Bank National Association ("Belmont Ridge" or "BRB"), a national banking association organized and existing under 12 U.S.C. § 21 et seq., with its principal office located at 680 Lexington Avenue, 22nd Floor, New York, New York 10022. BRB holds OCC Charter No. 48271 and F

II. Acknowledgment of Consent Order Findings BRB confirms that it has received and carefully reviewed Consent Order No. OCC-2025-003 in its entirety, including all articles, provisions, and appendices thereto. BRB understands that the Consent Order was issued following the OCC's targeted BSA/AML examination of BRB, which was conducted over the period from March 2024 through September 2024, and which encompassed a det

1. OFAC Sanctions Screening Deficiencies. The Consent Order identifies inadequate OFAC screening protocols for fintech Banking-as-a-Service ("BaaS") transaction flows. Specifically, the OCC's examination found that BRB failed to screen one hundred percent (100%) of transactions processed through certain BaaS partner channels against the Specially Designated Nationals and blocked Persons List ("SDN List") and other OF

2. Suspicious Activity Report ("SAR") Filing Deficiencies. The Consent Order identifies deficiencies in BRB's suspicious activity monitoring and Suspicious Activity Report filing practices. These deficiencies include untimely SAR filings, an unacceptable backlog of unreviewed alerts in BRB's transaction monitoring system, and qualitative shortcomings in the narrative content and supporting documentation of filed SARs

3. Customer Due Diligence ("CDD") and Enhanced Due Diligence ("EDD") Failures. The Consent Order identifies insufficient Customer Due Diligence and Enhanced Due Diligence procedures for high-risk customers, with particular emphasis on deficiencies in the due diligence performed on customers onboarded through BRB's fintech partner channels. The OCC found that BRB's CDD and EDD processes did not adequately identify, ve

4. Transaction Monitoring Model Validation Deficiencies. The Consent Order identifies inadequate independent validation of BRB's transaction monitoring system. The OCC found that BRB had not conducted a comprehensive independent model validation in accordance with OCC Bulletin 2011-12 and applicable supervisory guidance, resulting in insufficient assurance that BRB's transaction monitoring scenarios, thresholds, and

5. Board-Level Oversight Deficiencies. The Consent Order identifies deficiencies in the Board of Directors' oversight of BRB's BSA/AML compliance program governance. The OCC's examination found that the Board did not receive sufficiently detailed, timely, or accurate reporting on BSA/AML compliance risks, program performance metrics, or the status of prior supervisory findings. The Consent Order further found that th

III. Acknowledgment of Civil Money Penalty BRB acknowledges the assessment of a civil money penalty ("CMP") in the amount of Fourteen Million Five Hundred Thousand Dollars ($14,500,000), as set forth in Article IV of the Consent Order. BRB understands that the CMP is payable within sixty (60) calendar days of the Consent Order's effective date of January 15, 2025, establishing a payment due date of March 16, 2025. BR

IV. Commitment to Compliance with Key Deadlines and Requirements BRB confirms its intent to comply with all provisions, corrective measures, and deadlines established by the Consent Order. Without limitation, BRB acknowledges and commits to the following key requirements and associated timelines: Board Resolution (Due February 28, 2025). Pursuant to Article V of the Consent Order, the Board of Directors of BRFG is re

V. Remediation Governance and Resources BRB's Board of Directors and senior management have committed substantial institutional resources to the remediation effort mandated by the Consent Order. Recognizing the seriousness of the identified deficiencies and the critical importance of restoring the integrity and effectiveness of BRB's BSA/AML and sanctions compliance program, the Board has approved a total remediation

VI. Designation of Points of Contact BRB designates the following individuals as the primary points of contact for all communications with the OCC regarding the Consent Order and the associated remediation program: Outside Counsel: Philip Hartmann, Partner Calderwood & Harkness LLP 1285 Avenue of the Americas, 40th Floor New York, New York 10019 Telephone: (212) 558-4127 Email: phartmann@calderwoodharkness.com BRB Ge

VII. Reservation and Cooperation BRB is fully committed to cooperating with the OCC, including the Examiner-in-Charge and all OCC examination and supervisory personnel, throughout the duration of the remediation process. BRB will respond promptly to all requests for information, documentation, and access to personnel, and will make all relevant records, systems, and facilities available to the OCC and its representat

VIII. Closing BRB reiterates its unequivocal commitment to achieving full and timely compliance with all provisions and requirements of Consent Order No. OCC-2025-003. BRB's Board of Directors, senior management, and the entire remediation team understand the gravity of the deficiencies identified by the OCC and the critical importance of restoring a robust, effective, and sustainable BSA/AML and sanctions compliance