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US Financial Regulator Accuses Cross River Crypto-Friendly Bank of Involved in Unsecured Lending Practices
After evaluating its current structure, Cross River had to put in place a process to avoid the recurrence of this violation in the future.
Furthermore, banks are required to submit a study and report on equitable lending sources by May 7, conducted by an independent third party, outlining the size and growth plans of the bank as well as the number of current and anticipated credit products, along with their respective volumes.
The report must also detail the number of decisions made on behalf of the bank by third parties related to applications, credit transactions and promotion of credit products offered by Cross River Bank.
Just one day before the consent order was published, Cross River CEO Gilles Gade released a statement on April 27, without specifying the FDIC allegations.
Gades emphasized that Cross River upholds “the highest level of compliance” as he highlighted that regulatory scrutiny will only get tougher for fintech-enabled banks, following the collapse of Silicon Valley Bank.
Cross River is the largest of these banking institutions and as such, we have regulatory reviewers reviewing several elements of our business on an ongoing basis,” said Gades.
“We view our compliance capabilities as a strategic advantage and are proud to lead our industry in maintaining the highest levels of compliance, transparency and responsibility,” he added.
The order was executed with the bank just days before Circle, the stablecoin issuer behind the $1.00 USD Coin USDC, partnered with Cross River for banking services on March 13. Circle has been looking for a new partnership, following the collapse of its previous provider, Silicon Valley Bank.
US Financial Regulator Accuses Cross River Crypto-Friendly Bank of Involved in Unsecured Lending Practices
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