Office of Inspector General for the Board and CFPB

The Board Can Strengthen Its Processes for Selecting Certain Federal Reserve Bank Leaders

2026-09-02T10:00:00-04:00

At the 12 Federal Reserve Banks, executive leaders and directors are involved in important functions like monetary policy, payment services, and supervision of financial institutions.

We found that the Board can strengthen its processes for selecting certain Reserve Bank leaders. For example, the Board can improve controls (1) to assess Class C directors' eligibility and ensure they are aware of federal conflict of interest laws and (2) that define the Board and Reserve Bank's roles and responsibilities for selecting Class C directors.

Figure. Composition of Reserve Bank Boards of Directors

Impacts of Certain CFPB Workforce and Contract Actions on Agency Operations

2026-08-27T14:00:00-04:00

In early 2025, we received multiple congressional requests to review the impact that the CFPB’s workforce and contract actions, such as employee dismissals and stop-work orders, had on agency operations. Our review focused on the high-level effects of these actions, not the agency’s compliance with laws or regulations, which is the subject of ongoing litigation.

We found that

stop-work orders resulted in CFPB personnel temporarily not performing work on enforcement, supervision, and other functions
workforce-reduction actions had limited impact on operations because court orders halted implementation of those actions
contract actions resulted in service disruptions that temporarily impacted the consumer complaint database and other operational processes

Member of Maryland National Guard Pleads Guilty to Conspiracy to Commit Money Laundering

2026-08-14T16:30:00-04:00

A member of the Maryland National Guard acknowledged his involvement in a money laundering scheme in federal court. This conspiracy laundered funds from at least 33 different victims. Alagborenepakake Opuiyo, 32, pled guilty to a superseding information charging him with one count of conspiracy to commit money laundering.

Virginia Man to Plead Guilty to $7.1 Million Wire Fraud Scheme

2026-08-13T13:00:00-04:00

BOSTON – A dual national of the United States and the Philippines was charged and has agreed to plead guilty to stealing more than $7.1 million from his employer over the course of a decade. Ricardo Fontanilla, 66, of Fairfax, Va., was charged with wire fraud and has agreed to plead guilty. Fontanilla was arrested at his home in May 2026 and was later ordered detained pending trial.

Ongoing Work Update

2026-08-11T12:00:00-04:00

We have initiated the following work:

Nonmaterial Loss Review of the Failure of Small Business Bank

We are reviewing the failure of Small Business Bank, which resulted in an estimated $5.7 million loss to the Deposit Insurance Fund. Our review will include determining whether the failure presents unusual circumstances and warrants an in-depth review.

The Board's and Reserve Banks' Practices for Following Up on Safety and Soundness Findings for Large and Foreign Banking Organizations

2026-07-23T10:00:00-04:00

The Board and Federal Reserve Banks monitor the safety and soundness of large and foreign banking organizations. If they identify a formal finding as part of their supervisory activities, and the LFBO remediates it, the Board and the respective Reserve Bank should timely confirm that remediation.

However, most of the horizontal findings we reviewed were not closed until several months after LFBOs submitted remediation materials. After we completed our work, but before we issued this report, the Board revised its supervisory approach, including the process for validating institutions' remediation efforts. As a result, we do not have recommendations but note that the Board should consider enhancing its system for tracking and reporting remediation follow-up work.

Former Bank CFO Sentenced to 36 Months' Imprisonment for Bank Fraud Scheme Involving a Car Wash and Undisclosed Debts in $4.3 Million Loan Fraud

2026-07-20T14:00:00-04:00

United States Attorney Lesley A. Woods announced that Aaron T. Luneke, 44, of Columbus, Nebraska, was sentenced on July 13, 2026, in federal court in Omaha, Nebraska, after being convicted by a federal jury of committing bank fraud and attempted bank fraud in connection with loans he sought to build and operate a Legacy Express Wash, a car wash in Columbus. United States District Brian C. Buescher sentenced Luneke to 36 months' imprisonment. There is no parole in the federal system. After his release from prison, Luneke will begin a five-year term of supervised release. Judge Buescher ordered Luneke to pay a $10,000 fine.

Former Adviser to Federal Reserve Board of Governors Sentenced to Federal Prison Term

2026-07-16T14:00:00-04:00

WASHINGTON – John Harold Rogers, 64, a former senior adviser for the Federal Reserve Board of Governors (FRB), was sentenced today in U.S. District Court to 38 months in federal prison in connection with making false statements to federal investigators about sharing restricted Federal Reserve information with Chinese intelligence operatives, announced U.S. Attorney Jeanine Ferris Pirro.

The Board Needs a More Robust Insider Risk Management Program

2026-07-16T10:00:00-04:00

The Board's proprietary economic information is of great interest to foreign adversaries who seek to undermine U.S. competitiveness and weaken national security. Risks can also occur from within—for example, an employee who, knowingly or unknowingly, shares sensitive information with foreign operatives.

We found that the Board's insider risk management activities do not proactively or effectively identify and manage insider risks to its information and assets. The Board lacks (1) a process to identify its critical assets, (2) a centralized program to proactively identify and manage insider risks at an enterprise level, (3) procedures for the timely sharing of pertinent information internally and with the Federal Reserve System, (4) enterprise-level policies and procedures establishing consistent incident response and reporting practices, and (5) insider risk training requirements for all Board staff.

We have nine recommendations that will contribute to developing a more robust insider risk management program.

Termination of the Forensic Evaluation of the Board's CCure System

2026-07-16T12:00:00-04:00

Our objective was to analyze both the logical relationships in the CCure database and the quality of data maintained in the system. During planning work, we found data quality issues in the CCure system. These issues were known by the CCure team before our evaluation, and we verified that processes already exist to identify and correct these issues. However, these processes involve systems outside the CCure system and beyond the scope of our original objective. For this reason, we have decided to terminate the current forensic evaluation. We may initiate a new evaluation of the Board's processes and systems in this area in the future.

Billings Man Pleads Guilty to Bank Fraud

2026-06-30T11:30:00-04:00

A Billings man who used a falsified bank loan to receive $50,000 admitted to charges Thursday, Acting U.S. Attorney Mark Steger Smith said.

Jordan Andrew Hennessy, 38, pleaded guilty to one count of bank fraud. Hennessy faces up to 30 years in prison, a $1 million fine, five years of supervised release and a $100 special assessment.

The Board Can Strengthen Its Process to Monitor and Mitigate International Travel Risks

2026-06-16T10:00:00-04:00

While international travel is an important aspect of the Board's collaboration with other central banks, foreign adversaries often target U.S. government employees traveling overseas in an effort to acquire sensitive, nonpublic information. Foreign travel can also present unique safety and security risks for employees.

Our review found that the Board does not have formal programs or procedures to

prepare employees before travel for potential risks and threats
assess employee travel data and escalate identified risks
require all employees who do not have a security clearance but have access to sensitive nonclassified information to report personal international travel
inform all travel reviewers of risks before allowing employees to travel with agency devices

We have six recommendations to minimize the risks to Board information and employees during international travel.

Orange County Man Arrested on Federal Criminal Complaint Alleging He Defrauded Bank Out of Nearly $100 Million

2026-06-11T14:00:00-04:00

SANTA ANA, California – An Orange County man was arrested today on a federal criminal complaint charging him with defrauding a bank out of nearly $100 million by manipulating title policies to make collateral that had been pledged to the bank look more valuable than it truly was.

Terminations of the 2025 Security Control Reviews for Three CFPB Systems

2026-06-03T11:00:00-04:00

Our objective was to test security controls for three systems in support of our 2025 Audit of the CFPB’s Information Security Program, as required by the Federal Information Security Modernization Act of 2014. After conducting fieldwork from June to September 2025, we identified an issue that we communicated in our 2025 CFPB FISMA report. Specifically, the report details the issue of CFPB systems, including one of the systems selected in our review, operating without authorization to operate or an equivalent risk assessment. We also identified additional areas of interest that we plan to follow up on in our ongoing 2026 CFPB FISMA audit. Because the issues were either already reported or require broader testing beyond the scope of this work, we are now formally closing the three security control reviews.

Semiannual Report to Congress, October 1, 2025–March 31, 2026

2026-06-01T10:00:00-04:00

Our semiannual report to Congress summarizes the Board and CFPB oversight work we completed during October 1, 2025–March 31, 2026.