Banking regulators cracked down on companies in 2024 for violations related to banking as a service, amid a massive industry collapse, historic money laundering crimes and a litany of practices that harmed consumers.
The four main industry watchdogs – the Federal Reserve, the Office of the Comptroller of the Monet, the Federal Deposit Insurance Corp. and the Consumer Financial Protection Bureau – issued more than 120 enforcement actions, fines, lawsuits and complaints against banks of all sizes. The OCC alone took 36 formal enforcement actions against banks, more than triple what it did in 2023.
More than half a dozen banks faced problems last year as they struggled to manage their relationships with third parties, known as banking as a service or BaaS. The problem was exacerbated in April after the bankruptcy of Synapse, a software company that connected banks with fintechs, left thousands of people without access to their money. Synapse and four partner banks are still missing between $65 and $85 million in customer funds.
In 2024, some banks, including Blue Ridge Bank, Five Star Bank and Metropolitan Commercial Bank, said they would exit the BaaS business.
The dirty money police also came under scrutiny in 2024, when TD Bank Group was found to have facilitated the movement of more than $670 million due to major risk management deficiencies. Other megabanks also got the hammer for similar violations, on a much smaller scale, which some experts labeled a resurgence of the compliance problem after a wave of enforcement actions following the 2007 financial crisis.
The CFPB also focused on deficiencies in card services. The desk fined Navy Federal Credit Union $95 million for improperly charging overdraft fees and penalized Goldman Sachs nearly $65 million for rolling out a credit card at Apple that wasn’t up to snuff.
Here is a list of some of the top enforcement actions of 2024.