Supervision & Ratings
Cease and Desist Order
Also known as C&D Order
A Cease and Desist Order is a formal supervisory action directing a bank to stop unsafe or unsound practices or violations of law. C&D orders may be contested or issued as consent orders; both carry the same legal force.
See recent orders by the FDIC, OCC and Federal Reserve in the bank enforcement actions list.
How is Cease and Desist Order defined?
Section 1818(b) authorizes the bank's primary federal regulator to issue a C&D order requiring the bank to stop specified practices and take affirmative corrective actions. The order may be contested in administrative hearings; in practice, most are issued as consent orders where the bank agrees rather than litigates.
Why does Cease and Desist Order matter?
C&D orders are the workhorse formal enforcement tool of US bank supervisors. They distinguish formal action (public, enforceable) from informal supervisory communication (MRAs, MOUs, private letters). The public C&D filing is what makes the supervisory concern visible to depositors, counterparties, and the market.
How do you interpret Cease and Desist Order?
C&D orders should be read for two key signals: the subject matter (operational, compliance, capital, governance) and the affirmative actions required. The more extensive the required actions and the broader the subject matter, the more fundamental the regulator's concern. A supervisory C&D order is not the same thing as a cease and desist letter, the private demand used in intellectual property and other civil disputes: the order is a legal action by a federal regulator, enforceable in court, and violating it can bring civil money penalties.
What do Cease and Desist Order levels indicate?
| Range | Label | Interpretation |
|---|---|---|
| None | Clean record | No active formal action. |
| Narrow C&D | Specific issue | Topic-specific concern. |
| Broad C&D | Major concern | Multiple risk-management subjects. |
| Contested C&D | Severe | Bank disagrees with the regulatory finding. |
Worked example
Frequently asked
Is a cease-and-desist order the same as a consent order?
A consent order is a type of cease-and-desist order (issued under the same statutory authority) where the bank consents to the action rather than contesting it. Contested C&Ds are rare; the vast majority of formal enforcement actions are issued as consent orders.
Who can issue a cease-and-desist order?
The bank's primary federal regulator (OCC for national banks, FRB for state member banks and BHCs, FDIC for state non-member banks, NCUA for credit unions). State regulators have parallel authority for state-chartered institutions.
How do I find C&D orders?
Each agency publishes its enforcement actions in a public database: OCC Enforcement Actions Search, FDIC Enforcement Decisions, Federal Reserve Enforcement Actions. BankRegReports aggregates these into the /events/ section.
Sources
- 12 USC §1818(b): Federal cease-and-desist authority
- Agency enforcement action databases (OCC, FRB, FDIC, NCUA)
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