A Wyoming bank holding company was hit with a cease-and-desist by the Federal Reserve Bank of Kansas City on Thursday in connection with the banking-as-a-service activities of its subsidiary, Summit National Bank.

Hulett, Wyoming-based Mode Eleven Bancorp is prohibited from expanding in ways “related to the fintech business strategy, including the establishment of any new subsidiaries, business lines, products, programs, services, customers, or program managers” without Fed approval.

In response to the order, Mode Eleven is fully and voluntarily retreating from its fintech business.

“[Mode Eleven] and the Board of Governors have the common goal that [Mode Eleven] operate in a safe and sound manner and comply with all applicable federal and state laws, rules and regulations,” the order said.

In its most recent inspection of the bank, the Kansas City Fed found issues related to its fintech business strategy, board oversight, capital, earnings, liquidity, risk management and compliance with the rules related to affiliate transactions.

Under the order, Mode Eleven must develop a plan to strengthen its board oversight and its risk management program, and must submit to the Kansas City Fed a written business plan to improve its earnings and overall condition for 2024.

Additionally, Mode Eleven needs to write a capital plan and create a program to enhance its liquidity risk management, including diverse funding.

It’s one of several banks — including Blue Ridge Bank, Piermont Bank, Sutton Bank and Lineage Bank — facing regulatory enforcement actions over BaaS programs of late. Regulators recently have taken aim at BaaS, ramping up scrutiny and pressure as they scramble to get a handle on the size and scale of lenders’ third-party partnerships.

Requests for comment from Mode Eleven were not returned by press time.