The FDIC alleges Cross River Bank violated fair-lending laws
Newark — May 4, 2023
NJCA Financial Justice Program Director Beverly Brown Ruggia released the following statement today in response to the Federal Deposit Insurance Corp. (FDIC) issuing a cease and desist order to Cross River Bank in Fort Lee, NJ. over allegedly “unsafe or unsound business practices” related to fair-lending laws. This decision follows a U.S. Department of Justice’s $13 million settlement agreement with Lakeland Bank late last year in response to its alleged pattern or practice of discriminatory “redlining” in the Newark metropolitan area, which was the fourth-largest redlining consent order for that department.
“We applaud the FDIC for taking decisive action against Cross River Bank for its alleged unsound business practices. A competently run and inclusive banking system is critical to the health of both Main Street America and our local economies. For too long, redlining and other discriminatory practices, along with predatory FinTechs—non-bank firms that use technology to deliver financial services–have helped perpetuate systemic racism and economic inequality throughout the country and right here in New Jersey. We are pleased to see regulators stepping up safeguards and enforcement actions that begin to address decades of racial and socio-economic injustice.
“In recent months we have seen increasing instability in the banking industry following years of consolidation and economic upheaval. This had led to numerous bank failures—Silicon Valley Bank, Signature Bank, and First Republic Bank this year—that have also hurt Main Street and our local communities. We urge Congress to fund and facilitate greater oversight by regulatory agencies, and to strengthen and modernize the Community Reinvestment Act. This will help protect New Jerseyans from both predatory practices and bank failures. We urge the banking industry to cease risky practices that maximize profits at the expense of consumers, and to work closely with advocates to ensure they fulfill the their public obligations to the communities they serve.”