Contract analysis

I. Purpose and Executive Summary The purpose of this memorandum is to track and analyze the escalation of supervisory findings issued by the Office of the Comptroller of the Currency ("OCC") against Belmont Ridge Bank National Association ("BRB" or the "Bank") across three distinct supervisory actions: (i) the June 2022 Matter Requiring Attention ("MRA") concerning BSA/AML transaction monitoring deficiencies; (ii) th

II. Background: Belmont Ridge Bank NA — Institutional Profile and Regulatory Context A. Entity Overview Belmont Ridge Bank National Association is a nationally chartered commercial bank organized under the laws of the United States, operating under OCC Charter No. 48271 and FDIC Certificate No. 31845. The Bank is a wholly owned subsidiary of Belmont Ridge Financial Group, Inc. ("BRFG"), a Delaware corporation whose c

III. June 2022 MRA — BSA/AML Transaction Monitoring A. Findings In June 2022, the OCC issued a Matter Requiring Attention directed to BRB concerning deficiencies in the Bank's BSA/AML transaction monitoring program. A Matter Requiring Attention is a supervisory finding that, while serious, is not escalated to the level of an MRIA or a formal enforcement action. An MRA identifies practices that deviate from sound comp

IV. November 2023 MRIA — OFAC Screening Gaps A. Findings In November 2023, approximately seventeen months after the issuance of the June 2022 MRA, the OCC issued a Matter Requiring Immediate Attention directed to BRB concerning deficiencies in the Bank's OFAC sanctions screening protocols, with particular emphasis on the BaaS/fintech partnership channel. The escalation from MRA to MRIA represented a significant super

V. January 15, 2025 Consent Order — OCC-2025-003 A. Examination and Consent Order Overview The OCC conducted a targeted BSA/AML examination of BRB from March 2024 through September 2024, a comprehensive six-month examination cycle that encompassed all aspects of BRB's BSA/AML program with particular emphasis on the areas previously identified in the June 2022 MRA and November 2023 MRIA. The examination was led by Exa

VI. Systemic Root Causes for Escalation The escalation from MRA (June 2022) to MRIA (November 2023) to Consent Order (January 2025) was driven by a confluence of systemic failures that, individually and collectively, prevented effective remediation and permitted compliance deficiencies to grow rather than diminish over time. This section identifies and analyzes six root causes for the escalation. A. Failure of Substa