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Cross River Bank and affiliate pay $1.1M CMP and $20M restitution

Teaneck, NJ
03/28/2018
Fine Amount: 
$1,135,250 plus restitution of $20 million
Penalty Type: 
Issued by: 

Cross River Bank, Teaneck, NJ (Bank), and institutional affiliate Freedom Financial Asset Management LLC (FFAM) have been issued Orders of Assessment of Civil Money Penalty and for Restitution by the FDIC.

The FDIC determined that the Bank committed violations of law and/or regulations, including, but not limited to: unfair or deceptive acts or practices in or affecting commerce in violation of Section 5 of the Federal Trade Commission Act (“Section 5”), 15 U.S.C. § 45(a)(1); Section 1026.17(c) of Regulation Z, 12 C.F.R. Part 1026, which implements the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq.; and Section 1005.10(e)(1) of Regulation E (“Regulation E”), 12 C.F.R. Part 1005, which implements the Electronic Fund Transfer Act (“EFTA”), 15 U.S.C. § 1693 et seq.

The FDIC also determined that the Bank engaged in unsafe or unsound banking practices by failing to ensure an adequate compliance management system (“CMS”) was in place, including sufficient resource allocation, and operated without effectively overseeing and supervising the Bank’s products and services offered in conjunction with third parties.

The FDIC determined that FFAM, in its role in originating and servicing Consolidation Plus Loans (“C+ Loans”) and Freedom Plus Loans to consumers, committed violations of law and/or regulations, including, but not limited to, engaging in unfair or deceptive acts or practices in or affecting commerce in violation of Section 5 of the Federal Trade Commission Act (“Section 5”), 15 U.S.C. § 45(a)(1); Section 1026.17(c) of Regulation Z, 12 C.F.R. Part 1026, which implements the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq.; and Section 1005.10(e)(1) of Regulation E (“Regulation E”), 12 C.F.R. Part 1005, which implements the Electronic Funds Transfer Act (“EFTA”), 15 U.S.C. § 1693 et seq.

FFAM deposited $20 million in a segregated account from which restitution payments will be made under both orders, with the Bank responsible for any restitution that FFAM fails to make..

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