Cross River Bank Gets Executive Order from FDIC over Lending Transactions

Cross River Bank, known as crypto-friendly, received an executive order from the FDIC on April 28.

Cross River Bank is a venture-backed regional bank based in New Jersey and is known as a bank that serves and collaborates with cryptocurrency businesses. According to a filing made public on April 28th, the Federal Deposit Insurance Corporation (FDIC), which provides insurance for deposit holders in American commercial and savings banks, has issued an enforcement action against the bank.

Cross River Bank representative

The bank is said to have failed

FDIC identified issues with the bank’s compliance with fair lending laws and regulations, as well as failures in internal controls, information systems, and credit underwriting practices.

FDIC issued an enforcement order of 34 pages and called on the bank’s board of directors to increase oversight and management direction, address unsafe practices, and take corrective measures to prevent future violations. The bank was asked to review its information systems and identify new credit products and the third parties that offer them.

“Before the enforcement action, the bank had identified areas that needed improvement and has since made significant improvements in its fair lending and other programs, including technology and personnel investments.”

Cross River Bank spokesperson

Cross River Bank’s founder and CEO, Gilles Gade, had acknowledged increased regulatory scrutiny in a blog post following the collapse of Silicon Valley Bank. However, FDIC had not mentioned the enforcement action at that time.

In a statement issued by the bank, they expressed their commitment to partnering with the fintech community and to being a leader in transparent, compliant, fair, and responsible lending.

Although FDIC’s actions have no direct relation to Cross River Bank’s cryptocurrency activities, the fact that they follow the failures of other crypto-friendly banks like Silvergate Bank and Silicon Valley Bank in 2023 raises questions. However, it remains unclear whether Cross River Bank will face a similar fate.

In conclusion, Cross River Bank has stated that they will continue their efforts to comply with the enforcement actions and work harder to comply with fair lending laws and regulations. They also mentioned that any outstanding work will be completed in the coming months.

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