Supervision & Ratings
Consent Order
A Consent Order is a formal public enforcement action where a bank agrees to specified corrective actions without admitting or denying alleged violations. Consent orders are the most common form of formal bank supervisory action.
See recent orders by the FDIC, OCC and Federal Reserve in the bank enforcement actions list.
How is Consent Order defined?
Consent orders are issued by the bank's primary federal regulator: the OCC for national banks, the Federal Reserve for state member banks and BHCs, and the FDIC for state non-member banks. Consent orders are public; the regulated entity agrees to corrective actions and often pays a civil money penalty.
Why does Consent Order matter?
A consent order is a publicly visible signal of significant supervisory concern. It typically requires the bank to enhance its risk management, governance, or compliance programs under specified timeframes. Common subjects: BSA/AML compliance, fair lending, consumer protection, capital planning, and operational controls.
How do you interpret Consent Order?
Banks under consent order face restrictions on growth, M&A activity, dividend payments, and new product launches. The order typically lists specific milestones with completion deadlines (90 days, 180 days, 1 year). Removal of the consent order requires regulator certification that all conditions have been satisfied, typically 18-36 months from issuance.
What do Consent Order levels indicate?
| Range | Label | Interpretation |
|---|---|---|
| None active | Clean | No formal enforcement action. |
| Topical / narrow | Specific issue | Focused on a single subject. |
| Multi-agency / multi-topic | Major | Broad governance or risk-management concerns. |
| Multiple active orders | Severe | Pattern of significant supervisory concern. |
Worked example
Frequently asked
How is a consent order different from a cease-and-desist order?
A consent order is the bank's voluntary agreement to corrective actions, while a contested cease-and-desist order is imposed after administrative hearing. Consent orders are issued under the same statute (§1818(b)) but reflect the bank's consent rather than adjudication.
How long do consent orders typically last?
Most consent orders remain in effect 18 months to 3 years, and some run longer. Removal requires a formal regulator determination that conditions have been satisfied. Some orders include sunset provisions; others remain open until explicit termination.
Do consent orders restrict bank operations?
Often yes: restrictions on dividends, M&A activity, expansion into new products or geographies, and senior-management changes are common. The bank must obtain agency approval for activities the order restricts.
Sources
- 12 USC §1818(b): Federal cease-and-desist authority
- OCC, Federal Reserve, FDIC public enforcement action databases
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