MIL-OSI USA: Federal Reserve Board issues an enforcement action against Evolve Bancorp, Inc. and Evolve Bank & Trust for deficiencies in the bank’s anti-money laundering, risk management, and consumer compliance programs

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Source: US State of New York Federal Reserve

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June 14, 2024
Federal Reserve Board issues an enforcement action against Evolve Bancorp, Inc. and Evolve Bank & Trust for deficiencies in the bank’s anti-money laundering, risk management, and consumer compliance programs
For release at 11:00 a.m. EDT

The Federal Reserve Board on Friday issued an enforcement action against Evolve Bancorp, Inc. and Evolve Bank & Trust, both of West Memphis, Arkansas, for deficiencies in the bank’s anti-money laundering, risk management, and consumer compliance programs.
Evolve partners with various financial technology companies that, in turn, provide access to banking products and services to their end customers. Examinations conducted in 2023 found that Evolve engaged in unsafe and unsound banking practices by failing to have in place an effective risk management framework for those partnerships. In addition, Evolve did not maintain an effective risk management program or controls sufficient to comply with anti-money laundering laws and laws protecting consumers.
The Board is requiring the bank to improve its policies and programs in those areas, in addition to requiring other remedial improvements. For current partnerships with financial technology companies, the Board’s action requires Evolve to strengthen its risk management practices to address potential risks, including compliance and fraud risks, by implementing appropriate oversight and monitoring of those relationships, including through enhanced procedures related to recordkeeping and consumer compliance programs. The Board’s enforcement action against Evolve is independent of the bankruptcy proceedings regarding Synapse Financial Technologies, Inc.
The Board’s action is being taken in conjunction with the Arkansas State Bank Department, the state supervisor of Evolve.
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Last Update: June 14, 2024

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