WASHINGTON – The U.S. Federal Reserve announced Thursday it had imposed an enforcement action against Customers Bancorp (NYSE: CUBI) for “significant deficiencies” around the bank’s risk management and anti-money-laundering practices.
The bank’s stock fell by more than 20% after the Fed announced the action, but pared losses to close 13.3% lower at $47.01 on Thursday.
The enforcement action against the Pennsylvania-based bank, which provides digital asset services and a tokenized instant payments platform, stemmed from a recent examination by the Fed, the central bank said.
Customers Bancorp’s chief risk officer, Joan Cheney, said in a statement the bank is committed to meeting the expectations of regulators including its obligations under the recently announced actions.
“We have already begun taking several significant steps to strengthen our risk management practices and BSA/AML compliance program,” she said.
BSA is the common name for a series of laws and regulations enacted in the United States to combat money laundering and the financing of terrorism.
The enforcement action does not come with a fine but directs the bank to overhaul its policies to address identified shortcomings, and regularly report back to regulators on its progress.
The order specifically directs the bank to overhaul its risk management around its digital assets business, including ensuring staff have the necessary expertise and sufficient resources and taking steps to quickly address risk exposures that emerge from that business.
The Fed also directed Customers Bancorp (NYSE: CUBI) to bolster its customer due diligence and suspicious activity reporting.
(Source: Reuters)
Mary Lee is a freelance writer and journalist based in Toronto, Canada. She holds an M.S. degree in business and economic journalism from Columbia University’s Graduate School of Journalism in New York and a certificate in digital marketing from the University of Toronto.
