Banking as a Service (BaaS) continues to be in the crosshairs of the federal government.
The latest banks to be hit with consent orders from the FDIC are Sutton Bank and Piermont Bank.
Sutton Bank’s consent order dated February 1 was focused on third-party risk management. The banks must implement “a revised AML/CFT program designed to maintain bank compliance with the Bank Secrecy Act.” It must also compile an inventory of all its third-party relationships.
Piermont Bank’s consent order was dated February 26 and directs the bank to review all transactions since September 2022 to all suspicious activity was reported. There were also new requirements for supervision of management and third-party risk management.
As Piermont CEO Wendy Cai-Lee commented, “Every bank that touches BaaS is getting an enforcement action.”
Despite all this negative attention, BaaS is actually booming with new banks still clamoring to get into the space. Interesting times.
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The FDIC ordered Piermont to review all transactions since September 2022 to ensure all suspicious activity was reported. Sutton, meanwhile, must compile an inventory of its third-party relationships.
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