EVOLVE CONSENT ORDER
In the Matter of Evolve Bancorp Inc.
Date: June 14, 2024
Issue: The Federal Reserve’s cease and desist order against Evolve Bank over risk management, anti-money laundering (AML), and compliance practices.
Case Summary: The Federal Reserve Board and the Arkansas State Bank Department (ASBD; collectively the supervisors) issued a cease and desist order against Evolve Bank & Trust and its holding company, Evolve Bancorp Inc.
Evolve Bank offers deposit accounts and payment processing services to fintech companies that in turn offer various financial products and services to end-user customers, either directly or through a partnership with other entities. On Aug. 11, 2023, the Federal Reserve Bank of St. Louis and ASBD performed a safety and soundness examination of Evolve Bank and identified deficiencies with its risk management of its Open Banking Division (OBD) and other related deficiencies. On Aug. 30, 2023, the Fed issued a report identifying deficiencies in Evolve Bank’s management of OBD’s consumer compliance risk.
On Jan. 10, 2024, the supervisors issued a report after conducting a further examination of Evolve Bank and identified additional deficiencies with respect to its risk management and compliance with applicable laws, rules, and regulations related to anti-money laundering including the Bank Secrecy Act (BSA), and regulations issued by the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury.
Within 90 days of the order, Evolve Bank’s board of directors must submit a written plan acceptable to the supervisors to strengthen board oversight of its operations and its compliance with BSA /AML requirements and OFAC regulations. The supervisors pointed out that Evolve Bank and Evolve Bancorp have initiated remedial actions to address the deficiencies.
Bottom Line: Evolve Bank did not admit to or deny the Federal Reserve’s findings.
Documents: Order
