FDIC targets Cross River Bank over ‘unsafe’ banking practices

The FDIC demanded that the crypto-friendly Cross River Bank “self-correct” and address deficiencies related to its lending activity.

The agency made public a consent order, signed by the bank on March 8. The document states that Cross River Bank failed to organize and maintain “internal controls, information systems and prudent underwriting practices.”

“The FDIC reviewed the matter and determined that [Cross River Bank] neither admits nor denies that it engaged in unsafe or unsound banking practices in connection with compliance with applicable fair-lending laws and regulations,” the order states.

A consent order — which confirms that the recipient agrees not to engage in certain activities if it has done so previously — is a ruling approved and issued by a court, though not a formal judicial decision — it is classified as a settlement.

Cross River Bank, a New Jersey regional bank that works with a number of cryptocurrency firms. According to a report from the FFIEC, as of the end of Q1 2023 the bank’s deposits were $7.8 billion.

Earlier, Circle became a client of Cross River Bank.

In Bloomberg, a bank spokesperson said the order would not have a “substantial impact” on business. He noted that “many of the enhancements” required by the document have already been implemented or will be in the coming months.

Cross River Bank also stressed that the order arose from a “standard review” of the lending business conducted in 2021. The document has no relation to the bank’s crypto-focused activities.

In April 2023, a representative of the New York state banking regulator refuted the notion that Signature Bank collapsed due to ties to the crypto industry.