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Former bank EVP/director banned and fined

Carson, CA
04/16/2018
Fine Amount: 
$70,000
Issued by: 

The OCC has issued a consent order for removal and prohibition and for a $70,000 civil money penalty against Rodrigo Garza, former EVP and Director of Merchants Bank of California, Carson, California. The OCC found that:

  • Respondent failed to take the necessary actions to ensure the Bank corrected the deficiencies resulting in violations of a 2010 Consent Order, a 2014 Consent Order, and 12 C.F.R. § 21.21. Between 2011 and 2014, Respondent caused the Bank’s risk profile to increase by recruiting higher-risk businesses as clients without ensuring the Bank had a commensurate Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) program to manage such risk. Respondent knew, or should have known, the Bank was ill-equipped to monitor and control the risk associated with this substantial growth in higher-risk activity, given the Bank’s continued noncompliance with the 2010 Consent Order and violation of 12 C.F.R. § 21.21.
  • Respondent, on multiple occasions, entered into lending relationships with a Bank director both in his personal capacity and through an entity he owned and controlled. At all relevant times, the Bank’s Code of Ethics policy explicitly prohibited each of the aforementioned lending relationships. Respondent failed to disclose these lending relationships to the Bank’s Board of Directors (“Board”), which compromised the Board’s decision-making process, and increased the risk of insider abuse, uncontrolled conflicts of interest, and biased decision making by the Board.

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