A $21 billion bank in Pennsylvania that focuses on offering bank services to digital asset customers is under an enforcement action by the Federal Reserve, the agency said Thursday, because of “significant deficiencies related to the bank’s risk management practices” particularly regarding anti-money laundering (AML) actions.
Customers Bank of Malvern, Pa. (owned by Customers Bancorp, Inc., of West Reading, Pa.), the Fed said, also operates an instant payments platform that allows commercial clients to make tokenized payments over a distributed ledger technology system to other commercial clients of the bank, the Fed said. The agency referred to the system as “dollar token activities.”
The deficiencies, the Fed said, were uncovered during the bank’s most recent exam by the Federal Reserve Bank of Philadelphia, which also found non-compliance with Bank Secrecy Act (BSA) requirements.
“Since that time, the Organization has begun to take measures to address the identified deficiencies in its BSA/AML compliance program,” the Fed said.
Enforcement by the Fed of the agreement signed by the bank, its holding company and the agency requires actions typically imposed under such circumstances, which include: address risk management, strengthen BSA/AML compliance, revise customer due diligence programs, and more.