The Federal Deposit Insurance Corporation issued a consent order against Thread Bank, headquartered in Rogersville, Tennessee, issued in May 2024 and made public by the FDIC on 28 June 2024. The order specifically addressed deficiencies in the bank's management of its BaaS programme and the risk management and compliance obligations arising from its relationships with its fintech partner programmes operating on the bank's regulated infrastructure.
BANK MUST DEVELOP FINTECH RISK TOLERANCE THRESHOLDS
Among the central requirements imposed under the consent order, Thread Bank must develop and implement formalised risk tolerance thresholds for each of its fintech partners, grounded in an enterprise-wide financial analysis that accounts for the specific risk profile each individual relationship introduces to the bank's overall risk exposure.
AML AND CFT COMPLIANCE TO COVER ALL PARTNER ACTIVITIES
The consent order additionally requires Thread Bank to enhance its anti-money laundering and counter-financing of terrorism compliance programme to cover all activities conducted through each of its fintech partners, not merely the bank's direct customer relationships.