Customers Bancorp hit with Fed action for risk management deficiencies (updated)

Customers Bancorp

08/08/2024 17:04

(Adds detail and context, stock price move)
    By Pete Schroeder
       WASHINGTON, Aug 8 (Reuters) - The U.S. Federal Reserve
announced Thursday it had imposed an enforcement action against
Customers Bancorp  CUBI.N  for "significant deficiencies" around
the bank's risk management and anti money-laundering practices.
    The bank's stock fell sharply after the Fed announced the
action, falling over 20% in midday trading.
    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. 
    A spokesperson for the bank did not immediately respond to a
request for comment. 
    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 the bank to bolster its customer
due-diligence and suspicious activity reporting.

 (Reporting by Pete Schroeder; Editing by Franklin Paul and
David Holmes)
 ((Pete.Schroeder@thomsonreuters.com; 202-310-5485;))