Consent order
Also called consent agreement, settled order
A consent order is a formal enforcement order that a regulated firm agrees to accept instead of contesting charges. US bank regulators and the CFPB use them most. The firm usually neither admits nor denies wrongdoing, but the order is legally binding and can require remediation, restitution, penalties and independent reviews.
How it works
Most consent orders follow a supervisory finding that a bank's controls are unsafe or unsound, or that it broke a law such as the Bank Secrecy Act. The regulator and the bank negotiate terms, the bank signs a stipulation, and the agency issues the order. Typical articles set deadlines for a remediation plan, board oversight, a look-back review and regular progress reports to examiners.
A consent order stays in force until the agency terminates it, which can take years. Breaching one exposes the firm and its officers to civil money penalties and further action. Orders are usually published, so they shape how customers, investors and correspondent banks see the firm. They also limit growth: some orders restrict new products, acquisitions or asset size until remediation is validated.
The rules
Lets federal banking agencies issue cease and desist orders, including orders issued with the consent of the institution, and impose civil money penalties.
Insured depository institutions and their affiliated partiesGives the CFPB power to bring administrative proceedings and issue cease and desist orders, which it commonly resolves through consent orders.
Providers of consumer financial products and servicesCommon questions
Does a consent order mean the firm admitted wrongdoing?
Not usually. Most US banking consent orders state that the firm neither admits nor denies the findings. The order is still binding, and failing to comply with it can lead to civil money penalties and further enforcement against the firm and responsible individuals.
How long does a consent order last?
There is no fixed term. The order stays in place until the issuing agency formally terminates it. Termination normally follows evidence that remediation is complete and sustainable, often confirmed by examiners or an independent review. Large AML and risk management orders have run for several years.
Which US agencies issue consent orders?
The OCC, the Federal Reserve, the FDIC and the CFPB all issue them, as do state banking departments. The SEC and CFTC settle cases through similar orders entered with the firm's consent. Each agency publishes its enforcement actions on its own website.
What does a consent order usually require?
Common terms include a remediation plan, stronger board and compliance oversight, a look-back review of past transactions or customers, restitution to customers, and periodic progress reports. Some orders also restrict growth, new products or acquisitions until the agency is satisfied.
