The Federal Reserve has implemented rigorous oversight and compliance requirements for Customers Bancorp, Inc., and its subsidiary, Customers Bank. This decision follows a recent assessment by the Federal Reserve Bank of Philadelphia, which identified significant shortcomings in the bank’s risk management and adherence to anti-money laundering regulations and the Bank Secrecy Act.
Nic Carter, an influential voice in the crypto community, expressed concern on X, stating, “Customers was one of the biggest pro crypto banks out there. Fed and FDIC are systematically dismantling all crypto-friendly banks one after the next.”
The Federal Reserve emphasizes that the bank’s board must bolster their oversight and resources to better handle high-risk operations, with particular attention on the bank’s digital asset strategies and instant payments system. This move has ignited frustration among crypto enthusiasts, who accuse the Federal Reserve and FDIC of gradually stifling crypto enterprises.
According to the written agreement, Customers Bancorp and Customers Bank are required to submit comprehensive plans within 60 days to rectify these issues. These plans must detail actions to enhance board oversight, improve risk management, and ensure compliance with regulatory standards and Office of Foreign Assets Control regulations. The bank is also tasked with updating its customer due diligence and monitoring programs for suspicious activities. Regular progress reports are mandated to track adherence to the new compliance standards. Both Customers Bancorp and Customers Bank have consented to these conditions as part of their commitment to refining their compliance practices and regulatory standing.