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Clozel's Take: FDIC Raps Pro-Fintech Bank — By Lalita Clozel (WSJ, 2018)

Summary

WSJ Pro column by Lalita Clozel, dated April 2, 2018, on the Federal Deposit Insurance Corp.'s enforcement action against Cross River Bank, which it says marks the first federal fine imposed on the institution. The FDIC fined the New Jersey bank more than $600,000 over alleged misdeeds by one of its marketplace-lending affiliates, after a 2015 examination report found its partner Freedom Financial Asset Management LLC had misled consumers on the terms of its debt-consolidation services.

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“WSJ, Lalita Clozel, ‘FDIC Raps Pro-Fintech Bank’ Cross River, Apr. 2, 2018.” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/wsj-lalita-clozel-fdic-raps-pro-fintech-bank-cross-river-apr-2-2018-e23b298135/, SHA-256 438332b4dc6a52913fd044a15c199d76b3bae5d23bce95c5b7ee7b9fe9dad4e6.

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Clozel’s Take: FDIC Raps Pro-Fintech Bank

The enforcement action against Cross River Bank marks the first federal fine imposed on the institution

By Lalita Clozel

WSJ ProApril 2, 2018 6:41 am ET

Last week’s FDIC enforcement action shows that banks need to handle their fintech partners carefully. Photo: Stephen Voss for The Wall Street Journal

The Federal Deposit Insurance Corp. has fined a pioneer of the fintech-bank partnership model more than $600,000 over alleged misdeeds by one of its marketplace-lending affiliates, a stark reminder that regulators are closely watching the burgeoning industry.

Cross River Bank, a New Jersey institution that works with more than a dozen marketplace lenders, found itself in the FDIC’s crosshairs after an examination report in 2015 found its partner Freedom Financial Asset Management LLC had misled consumers on the terms of its debt-consolidation services.

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