WASHINGTON—The Federal Reserve has issued an enforcement action and fined Metropolitan Commercial Bank, of New York City, approximately $14.5 million for violations of customer identification rules and for deficient third-party risk management practices relating to the bank's issuance of prepaid card accounts, the Fed reported.
“In 2020, Metropolitan opened prepaid card accounts for illicit actors who subsequently used the accounts to collect illegally-obtained state unemployment insurance benefits,” the Fed said in a statement. “By opening prepaid card accounts through a third-party program manager without having adequate procedures for verifying each applicant's true identity, Metropolitan violated customer identification rules of the Bank Secrecy Act. The board is requiring Metropolitan to improve its customer identification, customer due diligence, and third-party risk management programs.”
Others Involved
The board's action was taken in conjunction with an action by the New York Department of Financial Services, the state supervisor of Metropolitan. The penalties announced by the board and the Department of Financial Services total approximately $30 million, the Fed noted.
Just Because It’s Autumn Doesn’t Mean Falling for Schemes to Overcharge You for CU Industry News. Instead, Try This Crisp Offer
The biggest, best and freshest news reporting in credit unions remains free! Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more. So stop paying those bank-fee-like subscription prices from other so-called “news” publications!
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance you didn’t know was coming.
And did we mention it’s free?