Cross River Bank has received a consent order from the FDIC requiring additional monitoring, according to a filing made public on April 28.
The bank receives a loan compliance order
The FDIC suggested in that filing that Cross River Bank had engaged in “dangerous or unsound banking practices” related to fair lending laws and regulations.
The regulator demanded that the company put in place increased monitoring and controls and make corrections through a related agreement.
Cross River Bank will not admit or deny wrongdoing, the order said.
In a separate report from the wall street journala representative from Cross River Bank said the action related to a review of the company’s lending practices from 2021 rather than its cryptocurrency or payments business activities.
The bank was also previously targeted by the FDIC in 2018 when the regulator forced the company to change certain practices and pay a fine of nearly $642,000.
Cross River Bank serves crypto customers
Cross River Bank is known to serve and work with various cryptocurrency companies including crypto exchange Coinbase and USDC issuer Circle.
The company previously outlined a “crypto first” strategy on tech news site TechCrunch in March 2022. There, a partner firm of Andreessen Horowitz suggested the company backs “many other top crypto companies.”
Although the FDIC actions are unrelated to the bank’s crypto business, the incident is notable due to the failures of other crypto-enabled banks such as Silvergate Bank and Silicon Valley Bank, which both collapsed in March.
These incidents demonstrate that a significant controversy could cause Cross River Bank’s crypto customers to sever ties with the bank or cause customers to make higher than usual withdrawals – although there is no indication that this is currently happening. .
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