Dear Mr. Frey:
I write in my capacity as outside counsel to Belmont Ridge Bank, National Association ("BRB") in connection with Consent Order No. OCC-2025-003, issued by the Office of the Comptroller of the Currency on January 15, 2025. Calderwood & Harkness LLP represents BRB in all matters arising under the Consent Order. This correspondence is directed to you in your role as Examiner-in-Charge, OCC Northeastern District Office, 340 Madison Avenue, New York, NY 10017.
**Purpose of This Transmittal**
On behalf of BRB, I am pleased to transmit the enclosed Comprehensive Remediation Action Plan (the "RAP"), submitted in satisfaction of the May 15, 2025 filing deadline established under Article VII of the Consent Order. A formal cover letter on Calderwood & Harkness letterhead accompanies this submission as the first attachment below.
**Enclosed Materials**
The following documents are attached to this email for the OCC's review:
1. Cover Letter to the OCC Transmitting the Remediation Action Plan 2. Comprehensive Remediation Action Plan (master document) 3. RAP Executive Summary (board-level summary) 4. Workstream 1: OFAC Sanctions Screening Remediation Plan — addressing OFAC screening gaps across BRB's Banking-as-a-Service ("BaaS") channels, including approximately 3.8 million of 31.7 million NovaPay transactions (approximately 12%) that were not screened against OFAC lists during calendar year 2023; full OFAC screening operationalization is targeted for November 1, 2025 5. Workstream 2: SAR Backlog Clearance & Process Improvement Plan — addressing the backlog of approximately 2,400 unreviewed alerts and the reduction of average SAR filing time from 78 days toward the 30-day regulatory benchmark; SAR backlog clearance is targeted for June 30, 2025 6. Workstream 3: CDD/EDD Remediation Plan — addressing approximately 47,000 high-risk customer accounts lacking adequate Customer Due Diligence and Enhanced Due Diligence documentation, with a 50% milestone (approximately 23,500 accounts) by July 15, 2025 and 100% completion by January 15, 2026 7. Workstream 4: Transaction Monitoring Model Validation & Tuning Plan — addressing the Veridian TMS v.10.0 system upgrade, with User Acceptance Testing completion targeted for August 1, 2025 and independent model validation by October 1, 2025 8. Workstream 5: BSA/AML Program Governance & Training Enhancement Plan — addressing board-level oversight deficiencies, establishment of a dedicated Compliance Committee, organizational restructuring of the compliance function, and enterprise-wide BSA/AML training
**Scope of the Remediation Action Plan**
The RAP addresses all five core deficiency categories identified in the Consent Order: (i) OFAC sanctions screening, (ii) SAR filing deficiencies, (iii) CDD/EDD failures, (iv) transaction monitoring model validation, and (v) board-level governance and oversight deficiencies. The RAP covers the full remediation timeline through February 15, 2026, the date by which BRB is required to achieve full compliance program implementation and submit a self-certification of compliance to the OCC. The Board of Directors of BRB has approved a dedicated remediation budget of $42.5 million to support execution of the RAP, exclusive of the $14.5 million civil money penalty assessed under the Consent Order.
**Prior Compliance Actions Completed**
BRB has already completed the following actions in compliance with the deadlines and requirements of the Consent Order:
- **February 28, 2025:** The Board of Directors adopted a formal Resolution acknowledging the Consent Order and establishing a dedicated Compliance Committee of the Board, chaired by independent director James Rutherford. - **February 5–10, 2025:** Thornfield Consulting Group LLC was engaged as the OCC-approved independent consultant. The OCC issued its non-objection to the engagement on February 5, 2025; the engagement letter was executed on February 10, 2025; and Thornfield commenced its on-site assessment on March 1, 2025. - **March 16, 2025:** The $14.5 million civil money penalty was paid in full on or before the applicable deadline. - **March 31, 2025:** The Interim SAR Backlog Status Report was submitted to the OCC. - **April 15, 2025:** Thornfield delivered its preliminary gap assessment, the findings of which have been fully incorporated into the RAP.
Additionally, BRB has engaged Pinnacle Compliance Solutions LLC to provide 30 temporary full-time-equivalent BSA/AML analysts to support the SAR backlog clearance effort and related lookback activities. These analysts have been onboarded and are currently deployed.
**Upcoming Milestones**
For the OCC's reference, the next key Consent Order milestones are as follows:
- **June 30, 2025:** SAR backlog clearance target (Workstream 2) - **July 15, 2025:** CDD/EDD 50% remediation milestone — approximately 23,500 accounts (Workstream 3) - **August 1, 2025:** Veridian TMS v.10.0 deployment, UAT complete (Workstream 4) - **September 15, 2025:** First quarterly progress report to the OCC
**Availability and Cooperation**
BRB and its counsel remain fully committed to transparent cooperation with the OCC throughout the remediation process. We would welcome the opportunity to schedule a meeting or conference call at your convenience to discuss the RAP or any aspect of BRB's remediation program in greater detail. Please do not hesitate to direct any questions or comments to me, or to Gregory Nardone, General Counsel and Corporate Secretary of BRB, and Patricia Langston, Chief Compliance Officer of BRB, each of whom is copied on this correspondence.
Thank you for your continued attention to this matter.
Respectfully submitted,
**Philip Hartmann** Partner, Banking & Finance Practice Group Calderwood & Harkness LLP 1285 Avenue of the Americas, 40th Floor New York, NY 10019 T: (212) 479-6300 E: phartmann@calderwoodharkness.com
**Attachments (8):** 1. Cover Letter to OCC Transmitting Remediation Action Plan 2. Comprehensive Remediation Action Plan 3. RAP Executive Summary 4. Workstream 1: OFAC Sanctions Screening Remediation Plan 5. Workstream 2: SAR Backlog Clearance & Process Improvement Plan 6. Workstream 3: CDD/EDD Remediation Plan 7. Workstream 4: Transaction Monitoring Model Validation & Tuning Plan 8. Workstream 5: BSA/AML Program Governance & Training Enhancement Plan