August 18, 2020
Settlement in CO Validates Lending Model & Promotes Responsible Partnerships
Settlement Validates Cross River Lending Model, Removes Cloud of Uncertainty and Allows Responsible Lenders to Continue to Provide Access to Credit to Consumers in Need
Resolves Issue of “True Lender” and Creates a Regulatory Framework That Can Be Replicated in States Across the Country
FORT LEE, N.J. - Cross River Bank (“Cross River”), a leading innovator and provider of banking services for technology companies, today announced, together with its partners, that they have entered into an agreement with the state of Colorado to settle the litigation over “true lender” and further validate the bank partnership model. Cross River praised Attorney General Phil Weiser for his lead in resolving the “true lender” issue in a manner that creates certainty for all parties while ensuring consumer protection.
“This agreement serves to confirm the validity of the consumer lending model Cross River has been utilizing since inception,” said Gilles Gade, Founder, President and CEO of Cross River. “As one of the largest lenders of Paycheck Protection Program loans during the COVID-19 pandemic, Cross River demonstrated that responsible innovation creates safe borrowing opportunities for consumers otherwise left behind.”
Although not initially named in the litigation, Cross River intervened on behalf of its partner Marlette Funding. As an FDIC-insured, New Jersey state-chartered bank, Cross River has partnered with technology companies since 2010, originating loans for more than a dozen marketplace lending platforms (“MPLs”). Cross River not only originates loans but owns the end-to-end process and life cycle of each loan. The Colorado resolution respects the supremacy of federal law in regulating bank lending while recognizing state authority to require licensing and reporting. This regulatory framework serves as a model for responsible lending programs to be replicated in states across the U.S.
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