Cryptocurrency-friendly Cross River Bank has received a consent order from the Federal Deposit Insurance Corporation due to what the agency described as "unsafe or unsound banking practices."
Cross River Bank is a venture capital New Jersey regional bank that does business with major Bitcoin and cryptocurrency firms such as Coinbase and Circle.
A consent order is a legal document that demonstrates the agreement between two or more parties involved in a dispute. It has the same effect as a court order and can be enforced by the court if either party fails to comply with it.
A consent order can be used to resolve a case without having to wait for a hearing. It may also be issued by an administrative agency to impose certain sanctions or penalties on someone who violates a law or regulation.
"The FDIC has considered the matter and neither acknowledged nor denied that the bank had engaged in unsafe or unsound banking practices related to its compliance with applicable fair lending laws and regulations by failing to establish and maintain internal controls, information systems, and prudent credit assessment practices," the 34-page consent order published.
Cross River Bank Spokesperson Speaks
A spokesperson for Cross River Bank said the decision was "the result of a standardized review" of the bank's lending processes two years ago:
“We had identified areas we needed to improve prior to the review, and other areas were identified as a result of the review.
Since then, we've made significant improvements to our fair lending and other programs going forward, including investing in technology and our staff. Many of these improvements have now been completed or will be completed in the coming months.”
*Not investment advice.