Our bank sends out a quarterly newsletter to children that usually contains things like puzzles, etc.

This quarter, somebody put in a kiddie recipe from a well-known website.

They referenced the source of the recipe (the website), but is that really ok? Or is this copywright infringement?

If you didn't obtain permission from the website you obtain the recipe from then it would be copyright infringement. That is, of course, unless they indicated that it was in the public domain.

My experience has been that if you note the author or source, you won't get any trouble.