Cross River Bank has been issued a consent order by the Federal Deposit Insurance Corporation (FDIC) that demands further oversight, according to an announcement made on April 28. The FDIC has suggested that the bank has been engaging in “unsafe or unsound banking practices” regarding fair lending laws and regulations. As part of the order, the regulator has asked the bank to introduce greater oversight, controls, and correct any issues through a related agreement. Although the bank will not admit to any wrongdoing, it will need to comply with the order.
Cross River Bank’s Cryptocurrency Business Unaffected
In a statement to the media, a representative from Cross River Bank clarified that the FDIC’s action is related to a review of the bank’s lending practices from 2021 and not its cryptocurrency or payments business activities. The bank had previously been targeted by the FDIC in 2018, which led to changes in certain practices and a fine of $642,000. Cross River Bank is known for serving and working with various cryptocurrency companies, including Coinbase and Circle, and had previously described a “crypto first” strategy in March 2022.
Although the FDIC’s actions are not related to Cross River Bank’s cryptocurrency business, the incident is noteworthy considering the recent failures of other crypto-friendly banks such as Silvergate Bank and Silicon Valley Bank. These failures have led to significant controversy and could cause Cross River Bank’s crypto clients to sever ties with the bank or make higher-than-usual withdrawals. However, there is currently no indication that this is occurring.