• The Federal Deposit Insurance Corporation (FDIC) sent a cease-and-desist order to Cross River Bank requesting that the bank implement greater oversight and control through a consent agreement.
• The FDIC accused Cross River Bank of engaging in “unsafe or unsound banking practices related to its compliance with applicable fair lending laws and regulations”.
• Cross River Bank is required to tender a fair lending resources study and report by May 7.
The Federal Deposit Insurance Corporation’s (FDIC) Action on Cross River Bank
The Federal Deposit Insurance Corporation (FDIC) recently sent a cease-and-desist order to Cross River Bank requesting that the bank implement greater oversight and control through a consent agreement. This was due to the institution allegedly engaging in “unsafe or unsound banking practices related to its compliance with applicable fair lending laws and regulations”, as outlined in the 2021 Report of Examination (2021 ROE).
Requirements for Cross River Bank According To Consent Order
Cross River Bank is required to establish and maintain internal controls, information systems, and prudent credit underwriting practices. Additionally, it must tender a fair lending resources study and report by May 7 carried out by an independent third party, highlighting the institution’s size, expansion plans, and current and anticipated number of credit products, and their respective volumes.
Statement From CEO Gilles Gade
Cross River’s CEO Gilles Gade issued a statement prior to the FDIC publishing the consent order emphasizing that the bank maintains “the highest levels of compliance” – albeit without directly mentioning the FDIC allegations.
Cryptocurrency Activities Not Involved In Allegations
A spokesperson from Cross River noted that this action has nothing to do with any cryptocurrency activities carried out at the institution.
Conclusion
This news serves as a reminder for financial institutions in general – especially those dealing with cryptocurrencies – that regulators are increasing their scrutiny over operations in these areas.