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Blue Ridge Bank set to trim BaaS fintech partnerships down to a “limited number”

  • Blue Ridge Bank, founded in 1893 in Virginia, is a community bank operating in the mid-Atlantic states.
  • The bank plans to reduce its Banking-as-a-Service (BaaS) partnerships to a “limited number” following regulatory attention.
  • During an investor presentation, the bank revealed its focus on core BaaS partners and a strong commercial emphasis on consumer traction.
  • The bank has started trimming nearly a dozen of its 50 fintech partners, with more potential cuts in the future.
  • BaaS allows banks to offer services to other businesses, typically fintechs, but compliance with regulators is crucial.
  • In August 2022, the US Office of the Comptroller of the Currency (OCC) flagged Blue Ridge Bank for “unsafe or unsound” practices, leading to regulatory enforcement.
  • The OCC instituted a compliance committee, subscribed the bank to a Third-Party Risk Management Programme, and imposed rigorous assessments and audits on BaaS relationships.
  • The bank’s strategy includes limiting sub-partners with high account volume and/or small deposit balances to reduce compliance oversight.
  • Blue Ridge Bank has not responded to FinTech Futures’ request for comment on these developments.

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