Cross River Bank has received a clearance order from the FDIC demanding further oversight, according to a filing made public April 28.
Bank is ordered to comply with lending
The FDIC suggested in that filing that Cross River Bank engaged in “unsafe or unsound banking practices” with respect to fair lending laws and regulations.
The regulator required the company to introduce more oversight 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 Journal, a Cross River Bank representative said the action was related to a review of the company’s lending practices starting in 2021 rather than its cryptocurrency or payments business.
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 clients
Cross River Bank is known to serve and partner with several cryptocurrency companies, including crypto exchange Coinbase and USDC issuer Circle.
The company previously described a “crypto first” strategy to tech news site TechCrunch in March 2022, where a partner company of Andreessen Horowitz suggested that the company supports “many other leading crypto companies.”
While the FDIC’s actions are unrelated to the bank’s crypto business, the incident is notable for the failures of other crypto-friendly banks such as Silvergate Bank and Silicon Valley Bank, both of which collapsed in March.
Those incidents show that significant controversies could lead Cross River Bank’s crypto clients to sever ties with the bank or lead clients to make more than usual withdrawals – although there is no indication that this is currently happening.
The post Crypto-linked Cross River Bank Receives FDIC Order appeared first on CryptoSlate.
