AML scrutiny, bank deals and capital stress shaped the week

Santander-Webster cleared its last regulatory hurdle. The $12.3 billion transaction received Federal Reserve approval after earlier European Central Bank and Office of the Comptroller of the Currency approvals, and Santander said it expects the deal to close Aug. 20. The Fed approval removed the last regulatory hurdle for the transaction, which Santander has framed as a U.S. growth step.

Peoples Bancshares of TN agreed to buy First Peoples Bancorp, while Zions Bancorporation closed Basis MultifamilyFinance. The Tennessee deal would create a company with about $650 million of assets at closing, expected late this year or early 2027, and no price was disclosed. Zions Bancorporation closed its Basis Multifamily Finance I acquisition, adding access to Fannie Mae DUS and Freddie Mac Optigo Conventional multifamily programs.

Wells Fargo moved tokenized deposits toward corporate payments. Starting this fall, the bank plans to offer select corporate and commercial clients tokenized deposits initially tied to U.S. dollars and British pounds for cross-border payments. The program is a deposit and payments-positioning response to digital assets, though experts cited in the report warned that separate bank blockchain networks could have limited utility without interoperability.

BCB’s credit review turned into capital conservation. BCB Bancorp identified about $30 million of commercial-and-industrial loans as total losses, recorded a $19 million provision for credit losses and said review work remains on commercial-and-industrial and commercial real estate credits. The board also suspended common and preferred dividends and the 2026 dividend reinvestment and stock purchase plan to conserve about $1.86 million per quarter.

UBS and EagleBank showed Bank Secrecy Act remediation costs. FinCEN imposed a $125 million penalty on UBS Financial Services for repeated failures to implement anti-money-laundering reforms, citing more than 61,500 foreign-currency wires totaling over $10.5 billion that were not monitored. EagleBank entered a one-year DOJ non-prosecution agreement and paid about $9.8 million to settle a U.S. Attorney’s Office investigation, adding another named-bank example of cash cost tied to control failures.

Wyden’s Epstein-linked AML allegations, Warren’s United Texas charter push and Lakeland’s redlining order kept scrutiny. Sen. Ron Wyden alleged JPMorganChase, Bank of America and Deutsche Bank ignored red flags tied to Jeffrey Epstein-related activity and called for investigations, fines and possible legislation. Sen. Elizabeth Warren urged the OCC to revoke United Texas Bank’s national charter approval because the bank was under an active anti-money-laundering cease-and-desist order, and a federal judge denied the government’s bid to terminate Lakeland Bank’s redlining consent order early.

FDIC-OCC CRA and Fed mutual-bank proposals would shift compliance and capital options. The FDIC and OCC proposed Community Reinvestment Act changes that would focus exams primarily on lending, exclude deposit services from retail assessments, raise the small-bank threshold to $1 billion and create an intermediate category up to $10 billion. The Federal Reserve proposed Regulation MM changes to clarify when mutual capital instruments may qualify as regulatory capital and to reduce burdens on mutual-to-stock conversions.

Trump renewed the Lisa Cook removal fight. A letter dated Wednesday said Trump is considering removing Federal Reserve Gov. Lisa Cook and gave her until Aug. 26 to respond to unproven mortgage-fraud allegations. The renewed push follows a 5-4 Supreme Court order allowing Cook to remain in office while removal litigation proceeds.