Cross River Investigated By FDIC

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Cross River

The Federal Deposit Insurance Corporation (FDIC) appears to be closely monitoring institutions that are supportive of cryptocurrencies in what has been a difficult year for conventional banks.

Cross River Bank received a cease-and-desist letter from the Institution, directing it to “self-correct” and appropriately address the weaknesses in its lending operations. Through a consent agreement (consent order), the regulator demanded that the bank implement greater oversight and control.

The FDIC published a consent order that Cross River Bank had signed back in March on Friday, April 28. The financial institution was accused of participating in “unsafe or unsound banking procedures related to its adherence to relevant fair financing laws and regulations” despite being well-known for its services to several fintech and cryptocurrency startups. 

Cross River’s Dealings Have Been Reported

All of these regulatory violations were detailed in the 2021 Report of Examination (ROE).

Cross River Bank failed to create and maintain internal controls, information systems, and reasonable credit underwriting methods, according to the 34-page consent order document. Following an assessment of its current structure, the bank must set up handles that will assist them in avoiding future infringements.

Cross River is also obliged to submit a fair lending resources analysis and report by May 7. 

This report, which must have been produced by an impartial third party, must include the institution’s size, expansion goals, the number of credit products it now offers and expects to provide in the future, as well as the volumes of each.

However, it is important to note that Cross River Bank has not confirmed or denied any of the claims made by the FDIC. In fact, a day before the regulatory agency published the consent order, Cross River’s CEO Gilles Gade released a statement reiterating that the bank upholds “the highest levels of compliance” – but omitting to address the FDIC claims.