A US Bank Now Gets Fined For ‘Massive Fraud’

October 30, 2023

A US bank has now been fined for ‘massive fraud’ by The Federal Reserve and New York Department of Financial Services.

The agencies say Metropolitan Commercial Bank (MCB) will pay a total of $29.5 million in penalties for allowing criminals to open new accounts and misdirect a whopping $300 million.

“According to the DFS, the bank issued its MovoCash digital prepaid visa card program to bad actors in 2020 because it did not use an adequate verification process to uncover the true identity of the applicants,” reports DailyHodl.

The culprits provided fraudulent identification and used their accounts to misdirect millions in direct deposit payroll payments and government benefits.

“MCB failed to prevent a massive, ongoing fraud in the MovoCash prepaid card program, allowing bad actors to abuse the financial system…

[MCB] observed a surge of fraudulent MovoCash account openings, and after failing to remedy the problem, allowed new MovoCash accounts to be opened.

This inaction allowed the fraud to increase exponentially over the next few months and facilitated more than $300 million in pandemic unemployment benefits to be misdirected to the MovoCash accounts of fraud actors,” the report stated.

The Fed says it’s now forcing MCB to improve its customer identification, customer due diligence, and third-party risk management programs.

MCB has $6.683 billion in total assets with seven branches across New York.

Also Read: A US Bank is Now Denying Customers Access to Money

Other Banking News Today

Massive banks in Texas now announce closures for 2024 according to fresh data from the Office of the Comptroller of the Currency (OCC).

According to the OCC’s current weekly bulletin listing, the following Texas bank branches are permanently closing in 2024:

Wells Fargo 11152 S. Gessner Drive, Houston.

Bank of America 2601 Preston Road, Frisco; 13350 Dallas Pkwy, Dallas.

Capital One 2301 E. Riverside Drive, Austin; 2910 S. Lakeline Blvd., Cedar Park.

“No specific dates of closure have yet been listed, and it should be noted more Texas branch closures are expected to be announced in upcoming OCC bulletins,” reports Joel Eisenberg.

“The popularity of digital banking, inclusive of electronic payments and direct deposits, continues to be widely acknowledged by industry analysts as the primary factor in this regard.”

Bank of America recently listed bank closures in other areas of the country for 2024 as well as Wells Fargo.

Wells Fargo CEO Charlie Scharf recently rose attention during the company’s earnings call stating: “This company is not efficient – like, period. End of story.

Even with all of the reductions that we’ve made, it’s not surprising because as you peel the onion back, other things present themselves.”

Banks have stated that job cuts have also played an important role to weather strong recession conditions in 2024.

But Texas is not the only state facing mass bank closures.

Wells Fargo revealed last Friday that several branches would be closing in Arizona, Georgia, Iowa, Florida, Texas, and Alabama.

California also continues to be heavily affected, with both large and regional bank branches permanently shuttering this year.

According to data from the Federal Deposit Insurance Corporation (FDIC), approximately 8,000 banks were in operation in 2000, but by 2022, this figure was halved.

Also Read: Banks Are Now Closing Thousands of Accounts Daily

Market News Published Daily 📰

Don’t forget to opt-in for push notifications so you don’t miss a single article!

Also, thank you to all of our blog sponsors. This year we’ve been able to increase push notifications slots making it more convenient than ever for new readers to receive their daily market news and updates.

You can also follow me on Twitter, Instagram, Facebook, or LinkedIn for daily news and updates on your favorite stories.

More Market News 📰

Become a Sponsor for only $1/mo.

Gain access to EXCLUSIVE FrankNez articles you won’t find here.
Become part of a private and safe Discord community, just for retail investors.
Get drawn at the end of the year for holiday giveaways.

Become a Sponsor Today!