- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Kyle Brasseur2023-10-20T20:00:00
New York-based Metropolitan Commercial Bank (MCB) was assessed nearly $30 million in penalties by federal and state banking regulators for failing to properly oversee a third-party program manager whose prepaid cards were a popular target of fraud during the Covid-19 pandemic.
MCB agreed to pay $15 million as part of a settlement with the New York State Department of Financial Services (NYDFS) and was fined an additional $14.5 million by the Federal Reserve Board, the agencies announced Thursday. The regulators faulted the bank for deficient third-party risk management (TPRM) practices and other Bank Secrecy Act (BSA) violations.
MCB sponsored the MovoCash Digital Prepaid Visa Card Program, which processed government stimulus funds and expanded unemployment insurance benefits during the pandemic. Prior to the start of the pandemic in March 2020, senior compliance staff at MCB were aware the prepaid card program could be vulnerable to fraudulent account openings, according to the NYDFS’s consent order.
THIS IS MEMBERS-ONLY CONTENT. To continue reading, choose one of the options below.
News and analysis for the well-informed compliance or audit exec. Select an option and click continue.
Annual Membership $499 Value offer
Full price one year membership with auto-renewal.
Membership $599
One-year only, no auto-renewal.
Metropolitan Commercial Bank announced the appointments of a chief risk officer and Bank Secrecy Act/anti-money laundering officer to bolster its reporting lines following a $30 million enforcement action from federal and state authorities last year.
The Industrial and Commercial Bank of China and its New York branch agreed to pay $32.4 million in penalties levied by two regulators for failing to address compliance failures and for the unauthorized disclosure of confidential supervisory information to an overseas regulator.
Fraud remains the leading form of identity-related suspicious activity cited in Bank Secrecy Act reports by a large margin, while technologies enable greater overall risks around exploitation, according to new research from the Financial Crimes Enforcement Network.
USAA Federal Savings Bank has been hit with its third cease and desist order from the Treasury Department’s Office of the Comptroller of the Currency in the past five years for failing to correct unsafe and unsound banking practices.
Becton Dickinson medical device company will pay $175 million for “repeatedly” misleading investors about its Alaris infusion pump, a product the company knew was flawed and was sold without the required patient-safety approvals, the Securities and Exchange Commission said.
The Securities and Exchange Commission charged bankrupt fashion retailer Express with failing to disclose nearly $1 million in perks to a former chief executive, but did not levy a financial penalty thanks to its cooperation, the SEC said.
