Cross River Bank gets FDIC enforcement order over lending
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CROSS River Bank, a partner of financial technology companies and crypto firms, received a cease-and-desist order from the Federal Deposit Insurance Corp (FDIC) over what the agency said were “unsafe or unsound” practices related to fair-lending laws.
The bank failed to establish and maintain “internal controls, information systems, and prudent credit underwriting practices,” the FDIC said Friday (Apr 28).
Cross River reached a consent agreement with the agency, dated Mar 8, without admitting or denying any charges or violations.
Cross River expects the order will have no “meaningful impact” on growth, a spokesperson said in an emailed statement.
“Many of the enhancements” required under the order “have been completed or will be completed in the coming months.”
Cross River, based in Fort Lee, New Jersey, provides banking services to fintech companies, ranging from payments and lending to capital and card issuing.
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It is also one of the crypto-friendly banks, and counts stablecoin issuer Circle Internet Financial, among its clients. It had US$5.7 billion in domestic deposits at year-end, according to a Federal Financial Institutions Examination Council call report.
The bank’s board must increase supervision and oversight of controls and ensure that corrective actions are taken, the consent agreement shows. The company is required to receive FDIC approval of new third parties and credit products.
The order was a result of a “standard review” related to lending conducted in 2021, and was unrelated to the crypto or payments businesses, a spokesperson said.
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Chief executive officer Gilles Gade said in a statement Thursday that scrutiny of banks is increasing after last month’s collapse of Silicon Valley Bank.
Cross River has “regulatory examiners reviewing some elements of our business on a continuous basis,” he said. BLOOMBERG
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