The Bank Slate


Metropolitan looks to resolve probe tied to fintech client

Metropolitan Bank Holding in New York is hopeful it can resolve an investigation by bank regulators tied to a former fintech client.

The $6.3 billion-asset bank said in a press release that it reserved $35 million in the fourth quarter for the potential resolution of a probe by the Federal Reserve and the New York Department of Financial Services.

The investigation focuses on matters involving a fintech that Metropolitan banked in 2020.

“We look forward to putting this matter behind us,” Mark DeFazio, Metropolitan’s president and CEO, said in the release.

Metropolitan disclosed in its last quarterly filing that federal and state banking regulators were looking into a prepaid debit card product it offered through an independent program manager. The bank said that, during the pandemic’s early stages, third parties used the product to create unauthorized accounts and to receive unauthorized government benefits payments.

Metropolitan said it stopped accepting new accounts from the program manager in July 2020, exiting the relationship. The bank added in the filing that it was “cooperating in these investigations and continues to review this matter.”

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