Skip to main content

FDIC alleges Cross River engaged in 'unsafe' lending practices

Cross River is yet to admit nor deny the allegations that it “engaged in the unsafe or unsound banking practices” related to its lending activity in 2021.

The Federal Deposit Insurance Corporation (FDIC) has requested Cross River Bank – known for its services to fintech and crypto firms like Visa and Coinbase – to "self-correct" and appropriately address weaknesses in its lending activities.

On April 28, the FDIC made public a consent order executed with Cross River Bank on March 8, alleging that the bank engaged in “unsafe” or “unsound” banking practices in regard to its compliance with applicable fair lending laws and regulations in 2021.

Despite accepting the consent order, Cross River has yet to admit nor deny the violations discovered in the 2021 report of examination. It was noted:

“The FDIC considered the matter and determined, and the Bank neither admits or denies, that it engaged in the unsafe or unsound banking practices related to its compliance with applicable fair lending laws and regulations”.

The order states that the bank must immediately take action to increase its supervision over the “system of internal controls, information systems, credit underwriting practises, and internal audit systems related to the consumer protection laws and regulations.”

Furthermore, the bank is required to promptly “self-correct” any violations of fair lending laws.

Cross River was ordered to “appropriately address” the deficiencies and weaknesses identified in the 2021 report of examination, as well as create processes to ensure these weaknesses don’t appear in future.

The FDIC executed the consent order with Cross River Bank on March 8. Source: FDIC

The FDIC requested that Cross River fully comply with the consent order in a “timely manner.”

Just one day before the consent order was made public, Cross River’s CEO, Gilles Gade, released a statement on April 27, without any mention to the FDIC allegations.

Gades emphasized that regulatory scrutiny on banks is increasing, suggesting that Cross River takes adequate measures to ensure “transparency, and responsibility.”

“Cross River is the largest of these banking institutions and as such, we have regulatory examiners reviewing some elements of our business on a continuous basis” Gades stated.

“We view our compliance capability as a strategic advantage and are proud to lead our industry in maintaining the highest levels of compliance, transparency, and responsibility” he wrote.

Related: Crypto-friendly banks mismanaged traditional risks, FDIC head tells Senate hearing

The order was executed with the bank only days before Circle, the stablecoin issuer behind USD Coin (USDC), partnered with Cross River for banking services ­– which was announced on March 13.

Circle had sought the new partnership, after its previous provider, Silicon Valley Bank, collapsed on March 11.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom



from https://ift.tt/4u0iHxE
https://ift.tt/072nmRK
Labels:

Comments

Post a Comment

Any questions, Please.

Popular posts from this blog

How Social Platform Chingari is Using Web 3.0 to Transform the Traditional Way We Use Social Media

The world is changing. This isn’t news to anyone, but sometimes it is nice to realize that—contrary to news headlines—not all the change is bad.  In fact, the last decade has seen so much innovation and so many improvements to technology that even 2015 seems like a different world.  Internet speeds, connecting with anyone globally (for free), and our ability to reach large groups of people without a middleman is nothing short of revolutionary. When it comes to technology evolution, this often happens with different iterations.  Once a system is mature, there’s a better idea of what we would like to change and improve.  We go back to the drawing board, target our creative minds at the issues, and create a new version that has evolved to better meet our needs.  The Internet has followed this model since its inception, evolving through three distinct stages.  We are only at the cusp of the third stage, called Web 3.0, with technologies such as blockchain and ...
Post a Comment
Read more

ENS DAO delegates offer perspective on DAO governance and decentralized identity

AlphaWallet CEO and Spruce co-founder talk about their roles as contributors to the Ethereum Name Service following the project's recent airdrop. Earlier this month, the Ethereum Name Service, or ENS, formed a decentralized autonomous organization, or DAO, for the ENS community.  Cointelegraph spoke to two ENS DAO delegates who applied for the opportunity to represent the community and stay involved in the decision making process: Victor Zhang, CEO of AlphaWallet, an open source Ethereum wallet, and Gregory Rocco, co-founder of Spruce, a decentralized ID and data toolkit for developers. Zhang spoke about his experience as an external contributor to ENS and an early supporter since 2018. Zhang initially sought to help ENS by offering Alpha Wallet as a user-friendly tool for  resolving .eth names and cryptocurrency wallet addresses. Essentially, if a user inputs an .eth name in the AlphaWallet, it will show the wallet address, and vice versa using reverse resolution. Alpha...
Post a Comment
Read more

Meta's head of crypto to step down at end of year

In explaining his decision to leave Meta, David Marcus said that his entrepreneurial DNA had been nudging him “for too many mornings in a row to continue ignoring.” David Marcus, the head of Meta’s cryptocurrency and fintech unit Novi, will step down from his role by the end of 2021. Taking over from Marcus will be Stephane Kasriel, the former CEO of Upwork who has been at Meta, formerly known as Facebook, since August 2020. Marcus announced the decision via a Dec. 1 tweet , noting that he had made the “difficult decision” to leave the firm by the end of this year. The exec didn’t go into detail about what his next move would be, but hinted that it may be something “new and exciting” that he builds himself: “While there’s still so much to do right on the heels of launching Novi — and I remain as passionate as ever about the need for change in our payments and financial systems — my entrepreneurial DNA has been nudging me for too many mornings in a row to continue ignoring it.” Ma...
Post a Comment
Read more