The Federal Deposit Insurance Corporation (FDIC) has asked Cross River Bank to “self-correct” and properly address shortcomings in its lending activities. Cross River Bank is well-known for its services to fintech and cryptocurrency companies like Visa and Coinbase.
A settlement agreement between the FDIC and Cross River Bank was made public on April 28. It claimed that the bank had engaged in “unsafe” or “unsound” banking practices regarding its compliance with the relevant fair lending rules and regulations in 2021.
Cross River Bank
According to the decision, the bank must move right away to increase its oversight of the “system of internal controls, information systems, credit underwriting practices, and internal audit systems related to the consumer protection laws and regulations.”
Cross River is expected to “appropriately address” the inadequacies and weaknesses found in its lending activities as well as to “self-correct” any fair lending rules that have been broken as soon as possible. Cross River must evaluate its current setup and develop procedures to prevent similar infractions from happening again in the future.
- Cross River Bank is well-known for its services to fintech and cryptocurrency companies.
- Cross River is expected to “appropriately address” the inadequacies and weaknesses.
- Gilles Gade stated in a statement that the bank upholds “highest levels of compliance”.
A fair lending resources study and report, done by an impartial third party, is also required from the bank by May 7. It must include information on the bank’s size and growth goals, the present and anticipated numbers of credit products, and their respective volumes.
The report also has to include information about the number of decisions that were made on the bank’s behalf by outside parties about credit applications, credit transactions, and the promotion of credit products that Cross River Bank offers.
Following the failure of Silicon Valley Bank, Cross River CEO Gilles Gade stated in a statement on April 27 that the bank upholds “highest levels of compliance” and that regulatory scrutiny will increase for banks that support fintech.
He said Cross River is delighted to lead the industry in upholding the highest levels of compliance, openness, and accountability and sees its compliance capacity as a competitive asset.
After Silicon Valley Bank, Circle’s previous provider of banking services, failed on March 13, Circle partnered with Cross River.