A spate of consent orders against U.S. community banks suggests that federal regulators have progressed from issuing guidance on partnering with fintechs and other third parties to cracking down on banks that fail to fully guard themselves against financial crime when doing so. Choice Financial Group of North Dakota and First & Peoples Bank & Trust of Kentucky signed consent orders with the Federal Deposit Insurance Corp. in December. The FDIC ordered the former to correct anti-money laundering deficiencies that arose from serving "third parties" that themselves provide financial services, and the latter to identify all ties in which AML-related...
Banks must respond to newly updated federal guidance by identifying and reducing their vulnerability to illicit funds and other risks that stem from their links to payment platforms and other fintechs, attorneys and former regulators said.
Banks that maintain relationships with financial technology-centric firms, or fintechs, should jointly file suspicious activity reports on potentially illicit transactions that affect them both, a senior regulator told attendees of an industry conference Monday.
U.S. federal regulators have indicated that they may require financial technology-centric firms, or fintechs, and other emerging non-bank financial companies to show they have a full suite of anti-money laundering controls in place before providing them accounts and services.
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