OCC Issues Cease and Desist Order Against MUFG Union Bank for Deficiencies Relating to Technology and Operational Risk Governance

The Office of the Comptroller of the Currency (OCC) issued a Cease and Desist to MUFG Union Bank on Sept. 20 in response to what it described as "unsafe and unsound practices" in the bank's management of technological and operational risks.The OCC's order requires that MUFG improve its technological and operational risk governance, technological risk assessments, and other internal controls and practices in order to address these deficiencies."The Bank will not be deemed to be in compliance with this Order until it has adopted implemented and adhered to all of the corrective actions set forth in each Article of this Order; the corrective actions are effective in addressing the Bank’s deficiencies; and the OCC has verified and validated the corrective actions," the OCC wrote. "An assessment of the effectiveness of the corrective actions requires sufficient passage of time for the Bank to demonstrate the sustained effectiveness of the corrective actions.” 

The scandals in Wirecard, Wells Fargo, and Credit Suisse are all examples of poor operational risk management leading to the loss of billions in business value. With a financial system that is more interconnected than ever, the OCC, like many other regulators globally, recognizes the danger that unmitigated non-financial risk poses not only to firms but to the health of the financial system as a whole.