C-Suite Wednesday – BREAKING NEWS Popular Bank Fined $2.25 Million for Unsound Lending Practices

January 25, 2023

Delaney Sexton
Contributing Editor

C-Suite Wednesday – BREAKING NEWS Popular Bank Fined $2.25 Million for Unsound Lending Practices

The Board of Governors imposed a $2.25 million civil money penalty on Popular Bank based on the following actions with regard to the Paycheck Protection Program.

Popular Bank processed and funded six PPP loans worth a total of $1.1 million even though the bank detected that the loan applications contained “significant indicia of potential fraud”. The bank failed to timely report the potential fraud to the SBA and processed and funded the loans despite knowledge of the potential fraud. As a result, the bank suffered a loss from each of the loans.

By processing and funding the loans and not reporting the potential fraud in a timely manner, Popular Bank demonstrated ineffective controls and procedures that constituted unsafe or unsound practices. Funding the loans also violated the bank’s internal BSA controls.

The Order of Assessment states that the bank self-reported the issue, undertook remediation, and cooperated with the Board of Governors throughout the investigation.

Sources:
Federal Reserve Board Press Release
Order of Assessment of Civil Money Penalty