OCC Orders Sponsor Bank for Wise, Crypto.com to Fix AML Program

The OCC's Order: What Changed

The Office of the Comptroller of the Currency (OCC) on Thursday disclosed a consent order against Community Federal Savings Bank, the small Queens, N.Y., institution that sponsors Wise USD accounts and Crypto.com prepaid cards. The order, executed April 24, requires the bank to rebuild its anti-money-laundering program after regulators found systemic breakdowns in customer due diligence, suspicious-activity monitoring, independent testing, and Bank Secrecy Act (BSA) compliance staffing.

Community Federal reported roughly $866 million in assets and $753 million in deposits as of December 31, 2025. Its partner roster includes major fintech and crypto names. The order repeatedly anchors its findings in the bank's "payment processing line," the segment that houses fintech and crypto-card partners, not traditional thrift activities.

The OCC's Novel Bank Supervision office signed the order. The same office supervises other fintech-partner banks.

Specific Failures

The order cites four categories of breakdown:

Customer due diligence – The bank was "ineffective" at understanding the nature of certain customers' businesses and the purpose of their transactions, including risks related to foreign financial institutions.
Suspicious-activity monitoring – The bank's automated alert system "auto-closed a very high percentage of all ingested alerts," and filters were not calibrated to the bank's actual payment-processing risk profile or its growing international exposure.
Independent testing – The bank's internal auditor "failed to identify BSA/AML program weaknesses" and did not scope audit work into high-risk areas.
Staffing and training – The bank lacked adequate BSA compliance personnel.

The violations include the OCC's BSA/AML program regulation, federal suspicious-activity reporting law, and an information-sharing requirement under the USA PATRIOT Act.

Exposure: Who Rides on Community Federal's License

Community Federal's small balance sheet belies its role in the payments ecosystem. Two major clients depend on its sponsor-bank license:

Wise – The U.K. money-transfer fintech moved its U.S. dollar account-details service to Community Federal in late 2023 from Evolve Bank and Trust. A Wise spokesperson did not respond to a request for comment. Wise customers use these accounts for receiving USD payments.
Crypto.com – The bank issues the prepaid card behind Crypto.com's spend product, according to the firm's U.S. cardholder agreement. Crypto.com did not respond to a request for comment.

The bank also acts as a payments-sponsor bank for a broader roster of fintech and card-issuing clients. The OCC order noted that the findings are "based on concerns largely unrelated to customers involved in digital assets activities," but the bank's international wire and ACH activity has grown significantly since 2020, including cross-border activity involving foreign financial institutions.

Table: Recent Fintech-Partner Bank Consent Orders

The pattern shows regulators increasingly focused on sponsor-bank compliance as fintech and crypto volumes rise.

Timeline and Enforcement Mechanics

The order does not impose a civil money penalty, restrict the bank's growth, or limit its ability to onboard new fintech partners. It does not name any officer or director individually.

Immediate Steps

Within 15 days of April 24, the bank must appoint a compliance committee with a majority of independent directors.
Within 90 days, the bank must submit an action plan describing steps to fix the deficiencies.

Consultant Requirements

The bank must hire two outside consultants:

Repeat Enforcement: A Pattern of Regulatory Friction

This is the third federal enforcement action against Community Federal in 14 years. Each previous action focused on similar risk-management failures.

February 2020 – The OCC found "unsafe or unsound practice(s)" related to strategic planning and earnings, placed the bank in "troubled condition," and required a three-year strategic plan covering compliance, strategic, and reputational risks, and BSA/AML risk. Five of the seven directors who signed the 2025 order also signed the 2020 agreement.

2011 – The Office of Thrift Supervision issued a cease-and-desist order that restricted higher-risk lending, required a conforming business plan, and forced revisions to suspicious-activity-reporting policies after the regulator flagged deficiencies the year before.

The bank then grew the payment-processing line that the OCC now says outstripped its controls. The pattern suggests structural risk in the sponsor-bank model when institutions grow payment volumes faster than their compliance infrastructure.

The bank said it has been "actively working to remediate the identified items" since well before the order, with significant investments since mid-2024.

Risk Outlook: What Would Confirm or Weaken the Setup

For users of Wise or Crypto.com, the immediate consequence is limited. The order does not freeze accounts, restrict withdrawals, or disrupt service. The bank remains operational.

What Would Reduce the Risk

The bank completes remediation within the timeline and passes OCC follow-up exams.

The historical review does not uncover previously unreported suspicious activity requiring retroactive filings.

The OCC does not escalate to growth restrictions or civil penalties.

What Would Make It Worse

The historical review finds previously unreported suspicious activity, forcing retroactive suspicious-activity reports. That could trigger further OCC or FinCEN penalties and potentially disrupt partner services.

The OCC later names institution-affiliated parties in further enforcement actions.

Other regulators, such as the FDIC or Federal Reserve, conduct parallel reviews of Community Federal or similar sponsor banks.

The OCC reserved the right to pursue further enforcement on the same facts, including against the bank's "institution-affiliated parties."

Why This Matters Beyond One Bank

Sponsor banks like Community Federal provide the regulatory wrapper that allows fintech and crypto firms to offer banking-like services without holding a bank charter. The model exposes the sponsor to all compliance risk while the fintech handles customer acquisition and technology.

The OCC's order is the latest in a series of enforcement actions targeting that model. Cross River Bank (2023) and Blue Ridge Bank (2024) faced similar scrutiny. The regulatory trend suggests the OCC is raising the bar for sponsor-bank AML programs, especially when payment volumes grow rapidly.

For traders and crypto users, the near-term impact is contained. The long-term question is whether the OCC's tolerance for repeat violations will hold or whether the next step includes restrictions on partner onboarding. That would directly affect how Wise and Crypto.com offer USD accounts and prepaid cards in the U.S. market. Neither firm responded to requests for comment.