Patriot Bank, N.A.
The OCC entered into a formal agreement with Patriot Bank, National Association on February 20, 2025, following an examination that uncovered regulatory deficiencies in BSA/AML compliance linked to third-party risks such as prepaid card programs. The agreement requires the bank to develop comprehensive plans for strategic and capital planning, enhanced customer due diligence, suspicious activity monitoring, and robust oversight of third-party program managers. Third-party program managers are required to register with FinCEN if applicable and meet licensing requirements. The action reflects heightened regulatory scrutiny of banks' fintech and third-party partnerships, emphasizing the need for robust governance and risk management frameworks to prevent money laundering. This case exemplifies 2025 enforcement trends tied to fintech-like prepaid programs at sponsor banks.
Verified from source: The OCC entered a Formal Agreement with Patriot Bank, N.A., Stamford, Connecticut, for violations and unsafe or unsound practices, including those related to strategic planning, capital planning, Bank Secrecy Act/Anti-Money Laundering risk management, payment activities oversight, credit administration, and concentration risk management. (Docket No. AA-NE-2025-05)
- Signals continued OCC focus on BSA/AML compliance in banks with fintech and third-party prepaid card partnerships
- Banks offering prepaid card programs through third-party managers face heightened expectations for due diligence and suspicious activity monitoring
- Third-party program managers may face increased registration and licensing requirements under FinCEN
- BaaS banks should expect examiners to scrutinize governance and risk management frameworks around partner programs