The Bancorp Bank
Outcome
The FDIC fined The Bancorp Bank $7.5 million for BSA/AML violations from July 2013 through June 2018, including failure to comply with a June 5, 2014 consent order, representing a recurring pattern of AML compliance failures that spanned five years before the bank was released from oversight in 2020.
Details
The Bancorp Bank — FDIC $7.5 Million BSA/AML Penalty and Consent Order Noncompliance (2018)
Outcome: The FDIC assessed The Bancorp Bank of Wilmington, Delaware a $7.5 million civil money penalty for BSA/AML violations spanning July 2013 through June 2018, including failure to comply with the June 5, 2014 consent order that had already required corrective action — a five-year pattern of recurring compliance failures that ended only when the bank achieved consent order release in 2020.
The Bancorp Bank, headquartered in Wilmington, Delaware and operating as the banking infrastructure for a large prepaid card and fintech payment services business, had a prolonged history of BSA/AML compliance struggles. The FDIC issued a consent order on June 5, 2014 after identifying material weaknesses in the bank's AML program. The bank failed to achieve sustained compliance with the 2014 consent order's requirements, allowing the underlying BSA violations to persist through mid-2018.
The $7.5 million civil money penalty reflected five years of BSA/AML deficiencies during a period when the bank's business model created elevated money laundering risk through its role as the regulated banking backbone for prepaid card programs and fintech financial products — a business line that required particularly rigorous customer identification and transaction monitoring. The FDIC also assessed a separate civil money penalty in 2018 for unfair and deceptive practices (UDAP) violations connected to the bank's prepaid card operations.
The Bancorp ultimately achieved consent order release in 2020 after demonstrating that its remediation program had produced sustained compliance, ending a six-year regulatory remediation period. The case established an early pattern for what would later become the central regulatory challenge of the BaaS bank model — maintaining BSA/AML compliance when banking products are delivered through third-party fintech partners.
Primary Source: FDIC Press Release — Settlement with The Bancorp Bank for Unfair and Deceptive Practices (2018)
How Crucible Prevents This
Crucible's session-init gate would surface outstanding consent order compliance deadlines at every session start, preventing the multi-year noncompliance cycle. The instinct-observer would detect the pattern of recurring BSA exception findings across examination cycles. The quality-gate would block compliance program configuration changes that failed to address the specific deficiencies cited in the 2014 consent order.
Don't let this happen to your organization. See how Crucible works.
See How Crucible Works