FDIC Targets Crypto-Friendly Cross River Bank With Links To Coinbase, Circle By Benzinga
Benzinga – The Federal Deposit Insurance Corporation (FDIC) issued a consent order to Cross River Bank, a crypto-friendly bank with ties to major cryptocurrency firms such as Coinbase Global Inc (NASDAQ: COIN) and Circle (CRYPTO: USDC), concerning alleged “unsafe or unsound banking practices.”
The New Jersey-based venture-backed regional bank neither admitted nor denied the allegations in the 34-page consent order.
The FDIC found issues with Cross River Bank’s compliance with fair lending laws and regulations, citing failures in internal controls, information systems and credit underwriting practices.
The FDIC provides insurance for depositors in American commercial and savings banks.
A Cross River Bank spokesperson told The Block that the order resulted from a standard review related to the bank’s lending processes two years ago.
The spokesperson highlighted that the bank identified areas for improvement before the examination, and it had since made significant enhancements to its fair lending and other programs, including technology and personnel investments.
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The bank said it was committed to partnering with the fintech community and being a model for transparent, compliant, fair and responsible lending.
The consent order urged the bank’s board to increase its supervision and direction of management, take corrective action to address unsafe practices and prevent future violations.
Among other tasks, the bank was also asked to review its information systems and identify new credit products and third parties offering them.
Cross River Bank must submit written progress reports detailing compliance efforts with the order.
In a first-quarter message blog post, Gilles Gade, founder, chair and CEO of Cross River Bank, acknowledged increased regulatory scrutiny after Silicon Valley Bank’s collapse but did not mention the FDIC consent order.
He emphasized the bank’s commitment to compliance, transparency, and responsibility, considering it a strategic advantage.
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Photo: Shutterstock
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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