The order is related to the bank’s compliance with lending laws, not its crypto activity.
Cross River Bank has received a consent order from the FDIC demanding further oversight, according to a filing made public on April 28.
Bank receives order for lending compliance
The FDIC suggested in that filing that Cross River Bank engaged in “unsafe or unsound banking practices” related to fair lending laws and regulations.
The regulator demanded that the company introduce greater oversight and controls and make corrections through a related agreement.
Cross River Bank will neither admit nor deny wrongdoing, the order said.
In a separate report from the Wall Street Journal, a representative from Cross River Bank said that the action was 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 compelled 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 work with various cryptocurrency companies including crypto exchange Coinbase and USDC issuer Circle.
The company previously described a “crypto first” strategy to the tech news site TechCrunch in March 2022. There, a partner firm of Andreessen Horowitz suggested that the firm supports “many other leading crypto companies.”
Though the FDIC’s actions are not related to the bank’s crypto business, the incident is notable due to the failures of other crypto-friendly banks such as Silvergate Bank and Silicon Valley Bank, both of which collapsed in March.
Those incidents demonstrate that significant controversy could cause Cross River Bank’s crypto clients to break ties with the bank or lead clients to make higher-than-usual withdrawals — though there is no indication that this is occurring at present.