The Office of the Comptroller of the Currency (OCC) has ordered Community Federal Savings Bank, a New York-based bank that partners with fintechs such as Wise and Crypto.com, to revamp its anti-money-laundering (AML) program. The bank was found to have systemic issues in its internal controls, including those for customer due diligence, suspicious-activity monitoring, independent testing, and compliance with the Bank Secrecy Act (BSA).
Background on the OCC’s Enforcement Action
The OCC’s enforcement action, which was revealed in its April 2025 monthly release, is the second against Community Federal since 2020. In the previous action, the bank was asked to draft a strategic plan that controlled BSA/AML risk. However, the OCC has found that the bank’s AML program has failed to keep pace with its growth, particularly in its payment processing line, which handles large volumes of wire and Automated Clearing House (ACH) transactions, including cross-border activity with foreign financial institutions.
A spokesperson for Community Federal Savings Bank stated that the bank takes the order seriously and has been actively working on remedying the identified issues. The bank has made substantial investments in its systems and programs since mid-2024, and remediation is currently underway, with the expectation of resolving all outstanding matters in the coming months.
OCC’s Findings and Its Impact
The OCC found that the bank’s automated system for identifying suspicious transactions had auto-closed a significant percentage of alerts. Furthermore, the bank’s customer due diligence was found to be ineffective, with failures to understand certain customers’ businesses and the purposes of transactions in the payment processing line. The bank also lacked understanding of risks related to foreign financial institutions.
This enforcement action could have far-reaching implications for the fintechs that rely on Community Federal Savings Bank’s rails, including Wise and Crypto.com. The rebuild of the BSA/AML program could affect areas such as onboarding, transaction monitoring, and product timelines for these fintech companies.
What’s Next for the Bank?
As part of the enforcement action, Community Federal Savings Bank is required to hire two outside consultants. The first consultant will conduct a comprehensive review of the bank’s AML program, while the second, a Suspicious Activity Report (SAR) look-back consultant, will recommend new SARs for historical transactions that the bank’s automated system auto-closed.
The bank must also revamp its internal-controls program, including creating a written customer-due-diligence program and a separate program for screening transactions against requests submitted under Section 314(a) of the USA PATRIOT Act. Furthermore, if the bank’s BSA officer position becomes vacant, the OCC must pre-approve the next one.
Despite these requirements, the OCC’s order does not impose a civil money penalty on the bank, restrict the bank’s growth or its ability to onboard new fintech partners, or name any officer or director individually or bar anyone from working in banking. However, the OCC has reserved the right to pursue further enforcement on the same facts, including against the bank’s “institution-affiliated parties.”
While the bank is relatively small with assets worth roughly $866 million and deposits of $753 million as of its Dec. 31, 2025 Federal Deposit Insurance Corp. filing, it has a long list of fintech partners. As such, its compliance with anti-money-laundering regulations and the BSA is of utmost importance, particularly in today’s digital world where illicit activities can easily cross borders.
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