Teaneck, N.J.-based Cross River Bank filed a declaratory judgement action against the state of Colorado in a lawsuit regarding rights to extend credit and to sell loans nationwide.
The action is related to a suit filed by the Colorado attorney general against Marlette Funding, which seeks to bar the latter from enforcing loans made and sold by Cross River to Marlette. The bank said the move by the Colorado attorney general is a violation of the Federal Deposit Insurance Act and is an attempt to "undermine the concept of federal preemption, and with it 150-years of established banking law."
Cross River further claimed that it was not directly named in the Colorado AG's suit as it is afforded protection due to its status as a state-chartered and federally insured financial institution, the latter factor particularly affording complete preemption of state law. The bank added that the federal preemption allows it to compete with larger institutions and argued that its lending model is different from other lenders who operate with "no skin in the game."
Cross River Bank is a unit of CRB Group Inc.