FDIC Announces Settlement with Cross River Bank for Unfair and Deceptive Practices

On Wednesday, March 28, 2018, the FDIC announced settlements with Cross River Bank, and its institution-affiliated party, Freedom Financial Asset Management, LLC for unfair and deceptive practices in violation of the FTC Act related to the marketing and origination of Consolidation Plus Loans. The FDIC also found the bank and its institution violated TILA and EFTA. The settlement will require the parties to pay civil money penalties to consumers, though an exact amount has not yet been determined.


The FDIC determined Cross River Bank and FFAM violated federal law prohibiting unfair and deceptive practices, by, among other things:


  • Requiring borrowers to sign loan documents without knowing the essential terms and conditions of the loan;
  • Failing to inform borrowers that certain major creditors will not negotiate debts with FDR and including related debt settlement fees into C+ Loans, when in fact, borrowers had to negotiate such debts themselves;
  • Misrepresenting to consumers that the C+ Loans would result in the settlement of all their debts within 30 to 45 days or 30 to 90 days, which was not true for nearly half of the consumers; and
  • Misrepresenting that the consumers' creditworthiness would improve by obtaining a C+ Loan.