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FDIC issues consent order against NJ-based Cross River Bank


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FDIC issues consent order against NJ-based Cross River Bank

The Federal Deposit Insurance Corp. issued a consent order against Cross River Bank for engaging in unsafe or unsound banking practices related to its compliance with fair lending laws and regulations.

Specifically, the FDIC said the Fort Lee, NJ-based bank failed to establish and maintain internal controls, information systems and prudent credit underwriting practices.

Cross River Bank consented to the issuance of the order without admitting or denying any charges of unsafe or unsound banking practices or violations of law or regulation.

Within 30 days from the effective date of the consent order, the bank must submit a list to the FDIC's New York Regional Office of all CRB credit products with an appropriately detailed description of each such CRB credit product and the third party offering it.

Additionally, Cross River Bank will not execute a binding commitment or agreement with a new third-party, allow a new third-party to offer a credit product through, or in conjunction with the bank and/or offer a new CRB credit product, either directly or indirectly, without first receiving the regional director's written non-objection to do so. Cross River Bank must submit a new third-party or new CRB credit product non-objection request to the regional director for review and comment or non-objection.

The FDIC ordered that Cross River Bank's board must immediately increase its supervision and direction of management and its oversight and monitoring of the bank's system of internal controls, information systems, credit underwriting practices, and internal audit systems related to consumer protection laws and regulations.

Under the order, the board must also assume responsibility, consistent with Cross River Bank's risk profile and size, considering its total assets and volume of credit transactions and operational complexity, to ensure that prudent credit underwriting practices are maintained, fair lending law compliance is monitored and violations are prevented, and the bank's internal audit system functions properly.

The FDIC also ordered the board to eliminate or correct and prevent unsafe or unsound banking practices and violations of the Equal Credit Opportunity Act and Truth-in-Lending Act.

Additionally, the agency ordered the board to appropriately address the deficiencies and weaknesses identified in the May 3, 2021, Consumer Compliance Report of Examination and establish processes to appropriately address any deficiencies or weaknesses identified in future consumer compliance reports of examination, visitation reports or supervisory letters.