Blue Ridge, which erred with fintechs, exits consent order

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Bankshares in Richmond, Virginia, which became a poster child for what can go wrong when banks partner with fintechs, has been released from a 2024 consent order related to its failed foray into banking as a service.The termination comes just shy of 23 months after the Office of the Comptroller of the Currency issued the enforcement action against the $2.5 billion-asset community bank.The January 2024 consent order said Blue Ridge was in "troubled condition" following its venture into BaaS. It identified certain "deficiencies" in Blue Ridge's anti-money-laundering compliance program. And it ordered the bank to ramp up its risk-management controls, improve its capital ratios and provide better oversight of its relationships with fintechs.In the months since then, Blue Ridge has taken swift action to rid itself of fintech partnerships and move back into traditional community banking, President and CEO Billy Beale said Friday.The bank exited its BaaS program in full at the end of 2024. At its high point, the program had about 70 fintech partnerships. Blue Ridge launched its BaaS strategy in 2020 under then-CEO Brian Plum."We just threw BaaS out the door," Beale told American Banker. "If three or four [partnerships] had been all that the bank had, and we'd managed it right, none of this would have ever occurred. It was just that the volume outran the capacity of the bank to run it the right way."Being freed from the consent order "is clearly a positive development," Christopher Marinac, an analyst at Janney Montgomery Scott, said Friday in an email. "The company can get back to originating new deposits and loans from both existing and new business customers," he said.The OCC did not provide comment before this article's deadline.For years, Blue Ridge Bankshares and its banking subsidiary, Blue Ridge Bank, have been an example of how the BaaS business can go wrong. Regulatory scrutiny came to light in 2022 as it was trying to win approval for its proposed merger with FVCBankcorp in Fairfax, Virginia.The deal was ultimately called off following "certain regulatory concerns" raised by the OCC.Later that same year, Blue Ridge agreed to bolster its anti-money-laundering program and improve its oversight of fintech partners as part of a written agreement with the OCC.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,734.11 -3.38 (-0.05%)Dow 3047,147.48 -309.72 (-0.65%)Nasdaq22,900.59 +30.19 (+0.13%)Russell 20002,388.23 +5.25 (+0.22%)VIX19.83 -0.17 (-0.85%)Gold4,094.20 -100.30 (-2.39%)PortfolioSign in to access your portfolioSign inTop gainersCDTX Cidara Therapeutics, Inc. 217.71 +111.72 (+105.41%)SRRK Scholar Rock Holding Corporation 37.41 +7.34 (+24.41%)AVDL Avadel Pharmaceuticals plc 23.56 +4.32 (+22.45%)LGN Legence Corp. 40.27 +6.95 (+20.86%)CSIQ Canadian Solar Inc. 33.58 +4.96 (+17.33%)Top losersDGNX Diginex Limited 10.53 -2.97 (-22.00%)STUB StubHub Holdings, Inc. 14.87 -3.95 (-20.99%)HTFL Heartflow, Inc. 27.98 -2.96 (-9.57%)EOSE Eos Energy Enterprises, Inc. 13.80 -1.40 (-9.24%)CLSK CleanSpark, Inc. 10.96 -1.02 (-8.51%)Most activeNVDA NVIDIA Corporation 190.17 +3.31 (+1.77%)ONDS Ondas Holdings Inc. 7.18 +0.62 (+9.45%)OPEN Opendoor Technologies Inc. 8.12 -0.44 (-5.14%)TSLA Tesla, Inc. 404.35 +2.36 (+0.59%)PFE Pfizer Inc. 25.06 -0.73 (-2.83%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersBTC-USD Bitcoin USD 95,737.01 -307.08 (-0.32%)ETH-USD Ethereum USD 3,194.33 +23.73 (+0.75%)XRP-USD XRP USD 2.25 -0.04 (-1.79%)SOL-USD Solana USD 141.08 -1.28 (-0.90%)BTC-CAD Bitcoin CAD 134,352.53 -430.94 (-0.32%)Top economic events