The Bank Slate


Minnesota bank with BaaS strategy agrees to written agreement

B2 Bank in Mountain Iron, Minn., which has fintech ties and has been building a Banking-as-a-Service (BaaS) platform, must develop a risk assessment process for new products and services under a written agreement with the Office of the Comptroller of the Currency.

The $72 million-asset bank stipulated to the agreement after regulators determined that it has “unsafe or unsound practices, including those relating to internal controls and less-than-satisfactory management.”

The risk assessment must include any new products or services that B2 has introduced in the past year. The bank must also provide a program tied to Bank Secrecy Act and anti-money laundering compliance.

B2 must also obtain the OCC’s non-objection to an updated five-year strategic plan to provide the bank’s board and management with “clear direction and prioritization with reasonable risk limits and timelines of all significant initiatives in alignment with a defined risk appetite.”

The written agreement requires B2 to have a concentration risk management program that identifies known and potential concentrations. B2 must outline “relationships between the bank, its affiliates and bank ownership,” including “specific expectations, responsibilities, and authorities” for each party.

Brian Barnes, founder of M1 Finance, bought the $35 million-asset First National Bank of Buhl in 2021.

The OCC, when it approved Barnes’ purchase of First National, required the bank to provide at least 60 days written notice before any significant change in its business plan or operations. This requirement is in place through the end of next year.

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