Customers Bancorp in Wyomissing, Pa., has agreed to a cease-and-desist order with the Federal Reserve related to the student disbursements business it bought from Higher One Holdings. It also agreed to pay a civil penalty of $960,000.

The $9.6 billion-asset Customers bought the business earlier this year for $42 million in cash. The order, however, stems from activities that predate the acquisition, when Customers held about half of Higher One's deposit accounts. In a Securities and Exchange Commission filing, the company said it identified a potential issue in September 2013 related to unfair, deceptive or abusive acts and practices at Higher One and demanded that the firm remediate the issue. The issue was resolved in December 2013 and reported to the Federal Reserve Bank of Philadelphia, Customers said. It also said it had previously set aside a reserve to pay for an anticipated civil monetary penalty.

Higher One has come under regulatory scrutiny in recent years; it was previously cited by the Fed and the Federal Deposit Insurance Corp. for allegedly using deceptive practices in misleading students with one of its products by omitting important information about fees, features and limitations.

In addition to the monetary penalty, the Fed also ordered Customers to submit a risk management and compliance plan to make sure that it adheres to consumer protection laws and regulations.