Evolve Bank & Trust

In June 2024, the Federal Reserve and the Arkansas State Bank Department jointly issued a cease-and-desist consent order against Evolve Bank & Trust following an August 2023 examination. The order found that Evolve had inadequate risk management practices governing its fintech partnerships, including deficiencies in anti-money laundering (AML), Bank Secrecy Act (BSA), consumer compliance, Office of Foreign Assets Control (OFAC) regulations, and fraud risk controls. The order mandates that Evolve's board develop comprehensive plans to strengthen oversight of management, operations, BSA/AML compliance, and OFAC programs. Key requirements include enhancing the risk management framework for fintech partnerships with policies to identify risks, ensure staff expertise, report exposures, and obtain board approval for new partners or products. Evolve must also engage an independent third party to review its fintech program for consumer law compliance. Evolve stated the order would not impact its well-capitalized status, customers, or deposits.

Verified from source: The Federal Reserve issued a joint cease-and-desist order with the Arkansas State Bank Department against Evolve Bank & Trust for unsafe and unsound banking practices, citing failures in risk management framework for fintech partnerships, AML compliance, consumer compliance, and fraud risk oversight. The order was published June 14, 2024, with the order itself dated the preceding Tuesday.