Blue Ridge Bank in Charlottesville, Virginia, has agreed to bolster its anti-money-laundering application and enhance its oversight of fintech partners in response to considerations from federal regulators.
An settlement with the Business of the Comptroller of the Forex, whose concerns assisted scuttle a earlier prepared merger, would involve Blue Ridge to make numerous enhancements to “control the dangers posed by” its fintech partnerships, the bank claimed Thursday in a securities submitting.
The arrangement, which took result Monday, calls for the lender to get a nonobjection from the OCC ahead of it signals any contracts with new fintech partners or provides new items with its present associates.
The lender said in the submitting that it “carries on to cooperate with the OCC, and to function to convey the Bank’s fintech policies, procedures and operations into conformity with OCC directives.”
“The Bank’s board of directors and management are committed to entirely addressing the provisions of the Settlement inside the required timeframes, and imagine the Lender has created development in addressing the prerequisites to day,” the lender stated.
Blue Ridge CEO Brian Plum declined to remark more. An OCC spokesperson also declined to remark, stating the company does not remark on distinct financial institutions or enforcement actions.
The bank’s securities filing did not detail the OCC’s unique concerns, but Blue Ridge has confronted scrutiny from consumer advocates over an earnings-share arrangement product that it has made available to learners. Critics say the solution could guide to abuses.
Less than the earnings share agreements, which the financial institution has financed with the fintech MentorWorks, pupils get funding that they agree to repay with a portion of their future money.
Final 12 months, Blue Ridge Bank’s dad or mum business claimed that the OCC had lifted “selected regulatory problems” that were being delaying its merger with one more Virginia lender, FVCBankcorp. The two banking companies identified as off the offer in January.
Quite a few areas of the OCC enforcement action revolve close to advancements to how Blue Ridge complies with the Financial institution Secrecy Act. The arrangement needs the bank to “undertake, carry out and adhere to an successful composed” Bank Secrecy Act risk program that also covers any pursuits that its fintech partners carry out, according to the securities filing.
The financial institution also ought to develop a new Lender Secrecy Act audit application with an “expanded scope” that handles its fintech companions, and it ought to guarantee that its Financial institution Secrecy Act division is “appropriately staffed with staff that have requisite skills, instruction, skills and authority,” according to its submitting.
Financial institution officers mentioned they agreed to post an “motion prepare” to the OCC, explaining how Blue Ridge will strengthen its checking of suspicious exercise, such as “large threat consumer exercise involving the Bank’s third-bash fintech partners.”
The regulatory arrangement did not say whether or not Blue Ridge would experience any monetary penalties.