The FDIC body publicly issued information associated with the unsafe or unsound banking practices of Cross River Bank.
Cross River is an American financial services organization that provides technology infrastructure to fintech and technology firms. New Jersey-based financial firm was founded in 2008. Crypto firms like Visa and Coinbase also use its services.
On 28 April 2023, The Federal Deposit Insurance Corporation (FDIC) made public a consent order executed with Cross River Bank on 8 March.
The FDIC’s issued information confirmed that Cross River Bank was involved in unsafe” or “unsound” banking practices in 2021, which was against the FDIC’s policies. In short Cross River’s lending practices were not safe on behalf of the FDIC’s lending laws and regulations in 2021.
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This banking insurance corporation also confirmed that the Bank neither admitted nor denied these allegations. Report noted that Cross River Bank’s customers are waiting to see the response from Cross River.
Through this information, the FDIC agency pressured the Cross River Bank to follow strict measures to maintain fair lending services and figure out the weakness in the services.
On 27 April, Cross River CEO Gilles Gade released a statement to address the regulatory & economic challenges going on in the US, after the downfall of some leading banks e.g. Silicon Valley Bank (SVB).
Gade failed to mention any allegation related to FDIC but confirmed that the Bank will always remain focused to follow all the rules & regulations “highest levels of compliance”.
In March of this year, USDC stablecoin issuer Circle established a partnership with this Bank to get banking services, following the downfall of its banking partner Silicon Valley Bank.
US banking crisis
Since Feb of this year, many US banks have reported bad financial positions. Many crypto critics claimed that banks failed because of crypto companies.
Recently a report from NewYork financial watchdog confirmed that the downfall of US banks was not linked with the crypto sector.
The latest US-based failed Bank is First Republic Bank.
Read also: Blockchain Association CEO says Crypto vs regulators fight will continue for up to 2 years
FDIC addresses weaknesses in Cross River Bank’s lending practices
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