The Bancorp Released From Consent Order, Unlocking BaaS Growth
On May 18, 2020, The Bancorp announced that it had been released from a regulatory consent order, a milestone that removed growth restrictions on its Payments business lines. The consent order had been imposed by the FDIC, and its termination followed extensive collaboration with regulators and significant investments in compliance technology, personnel, and processes. The Bancorp's sponsor bank platform is core to its BaaS strategy, providing prepaid card issuance, merchant sponsoring, and ACH origination capabilities to fintech partners.
Executives emphasized that the release enables the company to offer scalable infrastructure so that rapid-growth fintech partners will not outgrow their banking support. The company described its BSA/AML compliance ecosystem as industry-leading, built specifically for the risks inherent in servicing BaaS and payments clients. No specific financial terms were disclosed.
The regulatory clearance is expected to accelerate The Bancorp's ability to onboard new fintech partnerships and expand existing ones.
- The Bancorp can now aggressively scale its sponsor bank services, increasing competition among BaaS-enabling banks like Cross River and Evolve
- Fintech companies seeking a compliant, scalable sponsor bank gain a reinvigorated option, potentially easing bottlenecks in the BaaS partner bank market