The Federal Deposit Insurance Corporation (FDIC) has issued an order to crypto-friendly Cross River Bank regarding “unsafe or unsafe banking practices.”
Cross River Bank is a venture-backed regional bank in New Jersey. which does business with major crypto companies like Coinbase and Circle
“The FDIC has considered this matter. which banks do not admit or deny that they are engaging in unsafe or unsafe banking practices in relation to compliance with relevant fair lending laws and regulations; without establishing and maintaining internal controls, information systems, and prudent credit underwriting practices.”
A Cross River Bank spokesman said the order was “Results of a standard review” related to the bank’s lending process two years ago.
“We found improvements before the inspection and other inspections have been carried out since then. And we’ve made significant proactive improvements to our fair credit and other programs, as well as investments in technology and people, many of which have now been completed. or will be completed in the next few months,” the spokesman said.
this bank “Dedicated to partnering with the fintech community” and calling itself “A model for transparent lending, fair treatment. and responsible.”
“Importantly, the order does not address anything that would require Cross River to compensate consumers for damages suffered. our or the credit products we currently offer with them. And we do not think the order will have a significant impact on our growth trajectory,” the spokesman said.
The order also called on the bank’s board to increase oversight and direction of management, and to take “corrective action” to address unsafe practices and prevent future breaches. The bank was also asked to review its information systems, Identify new credit products, and submit a list of proposed third parties. including other works
Cross River Bank is required to compile written progress reports on its actions to “Follow orders safely”
Cross River Bank founder, chairman, and CEO Gilles Gade acknowledged this week that his institution is facing regulatory scrutiny following the Silicon Valley Bank meltdown, saying:
“Bank regulatory scrutiny is on the rise. As a result, SVB will expand those efforts by focusing on banks that support fintechs, especially Cross River, the largest banking institution. There are regulatory auditors who continually review certain elements of our business,” Gade wrote in a blog post.
“We view our compliance capabilities as a strategic advantage. and are proud to lead our industry in maintaining the highest levels of compliance, transparency, and accountability,” he continued.
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