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Dive Brief:

• The Federal Reserve fined New York-based Popular Bank $2.3 million for failing to detect “significant indications of potential fraud” in six Paycheck Protection Program loans the bank processed in 2020, the regulator announced Wednesday.

• The bank, a subsidiary of Puerto Rico-based Popular Inc., also failed to report the potential fraud in a timely manner, the Fed said.

• While the central bank has issued penalties against individuals linked to PPP fraud, Popular’s fine represents the first action the regulator has taken against a bank in connection with the pandemic relief program, a Fed spokesperson told The Wall Street Journal.

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The subsidiary of Puerto Rico-based Popular Inc. processed and funded six PPP loans in August 2020, totaling roughly $1.1 million, despite having detected signs of potential fraud, the Fed said.