OCC labels Blue Ridge’s BaaS as a “troubled condition.”

January 26, 2024
1 min read

TLDR: Blue Ridge Bank has been deemed to be in “troubled condition” by the Office of the Comptroller of the Currency (OCC) due to its failure to correct previously reported problems related to its fintech partnerships. The OCC entered a consent order with the bank, requiring it to ramp up its anti-money-laundering controls, capital position, and third-party management. The regulatory action is another blow to the banking-as-a-service (BaaS) industry, which has faced increased regulator scrutiny in recent years. The OCC and FDIC have dinged financial institutions, including Blue Ridge, for infractions such as delegating too much compliance to fintech partners or lacking access to data. Experts expect more regulatory action in the BaaS sector in the coming year, and banks involved in BaaS are urged to take a strategic approach and be prepared for the investment it takes to manage compliance.

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