Federal Reserve found ‘significant deficiencies’ in AML, Bank Secrecy compliance at Customers Bank

The Federal Reserve of Philadelphia has charged Customers Bank with anti-money laundering and Bank Secrecy Act compliance failures. 

The Fed claims that it found “significant deficiencies related to the Bank’s risk management practices and compliance with the applicable laws, rules and regulations relating to anti-money laundering.”

Both the Fed and Customers Bancorp entered the written agreement. The bank will adopt the programs 10 days after an agreement is reached, according to the Thursday filing. 

“Within 60 days of the effective date of this Agreement, the board of directors of the Bank shall submit a written plan to the Reserve Bank to strengthen board oversight of the management and operations of the Bank’s compliance with the BSA/AML Requirements and OFAC Regulations,” the filing said.

That plan will include actions taken to improve its digital asset strategy and other “major operations.”

Read more: Coinbase UK subsidiary fined $4.5M for insufficient money laundering controls

The board will also include “measures to improve the quality, comprehensiveness and granularity of the information and reports received and reviewed by the Bank’s board of directors in their oversight of the Bank and its operations, including information related to its digital asset strategy as well as proposed activities.”

Customers Bank will have to report risk exposures related to crypto, as well as steps to measure and assess those exposures. 

The Fed will require the bank to give the Reserve 30 days notice prior to implementing any initiatives or changes to its crypto strategy, which includes both relationship announcements and product launches.

Earlier this summer, CoinDesk reported that Customers Bank allegedly debanked some crypto hedge funds, though the accounts were notably inactive.

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