OCC requires Blue Ridge Bank to improve monitoring of fintech partners
Charlottesville, Virginia-based Blue Ridge Bank has agreed to strengthen its anti-money laundering program and improve oversight of fintech partners in response to concerns from federal regulators.
An agreement with the Office of the Comptroller of the Currency, if worries helped to cut themselves a previously planned merger would require Blue Ridge to make several improvements to “manage the risks posed by” its fintech partnerships, the bank said Thursday in a filing. archiving.
The agreement, which took effect Monday, requires the bank to get a no-objection from the OCC before signing contracts with new fintech partners or adding new products with its existing partners.
Andrew Harrer/Bloomberg
The bank said in the filing that it “continues to cooperate with the OCC, and to work to bring the bank’s fintech policies, procedures and operations into compliance with OCC directives.”
“The bank’s board and management are obliged to fully comply with the provisions of the agreement within the necessary timeframes, and believe that the bank has made progress in meeting the requirements to date,” the bank stated.
Blue Ridge CEO Brian Plum declined to comment further. An OCC spokesperson also declined to comment, saying the agency does not comment on specific banks or enforcement actions.
The bank’s securities filing did not describe the OCC’s specific concerns, but Blue Ridge did has faced scrutiny from consumer advocates over a revenue-sharing agreement product it offered students. Critics say the product can lead to abuse.
According to the revenue sharing agreements, which the bank has funded with fintech MentorWorks, the students receive funding that they agree to pay back with a portion of their future income.
Last year, Blue Ridge Bank’s parent company said that The OCC had raised “certain regulatory concerns” that delayed the merger with another Virginia bank, FVCBankcorp. The two banks blown off agreement in January.
Several parts of the OCC enforcement concern improvements to Blue Ridge’s compliance with the Bank Secrecy Act. The agreement requires the bank to “adopt, implement and follow an effective written” risk program for the Bank Secrecy Act that also covers all activities carried out by the fintech partners, according to the securities filing.
The bank must also develop a new Bank Secrecy Act audit program with an “expanded scope” covering its fintech partners, and it must ensure that the bank’s bank secrecy department is “appropriately staffed with personnel who have the necessary expertise, training, skills and authority”” , according to the archive.
Bank officials said they agreed to submit an “action plan” to the OCC, which explains how Blue Ridge will improve monitoring of suspicious activity, including “high-risk customer activity involving the bank’s third-party fintech partners.”
The settlement agreement did not say whether Blue Ridge will face any monetary penalties.
