First & Peoples Bank and Trust Company

Russell, KY 2022--2023 Community Banks / Credit Unions

FDIC Kentucky Department of Financial Institutions Bsa Aml Third Party Risk Unsafe Unsound Practices

Penalty

Outcome

First & Peoples Bank and Trust Company, Russell, Kentucky entered a joint FDIC and Kentucky DFI consent order in December 2023 for Bank Secrecy Act violations and unsafe practices related to inadequate management of risks posed by third-party partners, including deficient customer identification and AML/CFT program controls.

Details

First & Peoples Bank and Trust Company — FDIC/KDFI BSA and Third-Party Risk Consent Order (2023)

Outcome: First & Peoples Bank and Trust Company of Russell, Kentucky entered a joint FDIC and Kentucky Department of Financial Institutions consent order in December 2023 for BSA violations and unsafe or unsound banking practices, specifically citing the bank's failure to manage risks posed by third-party partners and deficient customer identification program controls.

First & Peoples Bank and Trust Company, a community bank headquartered in Russell, Kentucky, was one of several community banks that entered consent orders in late 2023 and 2024 related to its third-party fintech and banking-as-a-service partner relationships. A joint FDIC and Kentucky DFI examination found that the bank had violated the Bank Secrecy Act (31 U.S.C. §§ 5311–5330) and its implementing regulations, including 12 C.F.R. Part 326, Subpart B, and 31 C.F.R. Chapter X, through deficiencies in its AML/CFT program as applied to customers onboarded through third-party channels.

The consent order (FDIC-23-0090b / KDFI 2023-AH-0025) reflected the FDIC's 2023–2024 pattern of targeting community banks that had failed to maintain adequate BSA/AML infrastructure commensurate with the risk profile created by their third-party banking partnerships. The stipulation was dated December 12, 2023. Required remediation addressed board oversight of BSA compliance, AML/CFT program adequacy, and specifically the management of customer identity verification and suspicious activity monitoring for customers onboarded through the bank's third-party relationships.

Primary Source: FDIC/KDFI Consent Order FDIC-23-0090b — First & Peoples Bank and Trust Company (December 2023)

How Crucible Prevents This

Crucible's pre-tool-check hook would enforce third-party partnership due diligence requirements before any new BaaS or fintech relationship is activated. The instinct-observer would flag recurring CIP exceptions in third-party onboarded account data. The session-init gate would surface pending consent order remediation obligations at every compliance session start.

Source: FDIC/KDFI Consent Order FDIC-23-0090b — First & Peoples Bank and Trust Company (December 2023)

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