![]() In addition to the payment of restitution to harmed consumers and civil money penalties, the FDIC Orders also require Cross River Bank and FFAM to take affirmative steps to ensure compliance with the FTC Act, as well as TILA and EFTA. The restitution plan must be submitted to the FDIC for review and non-objection, and restitution calculations will be verified by an independent third-party. According to the FDIC, consumers who are eligible for relief under the settlement are not required to take any action to receive restitution. The FDIC Orders require Cross River Bank and FFAM to develop and implement a restitution plan that covers borrowers who, from 2013 to the present, received loans originated by the bank through FFAM, and were harmed by the practices identified as being unfair and deceptive. Cross River Bank and FFAM Required to Develop and Implement a Restitution Plan Misrepresenting that the consumers’ creditworthiness would improve by obtaining a C+ Loan.Īs the originator of these loans, Cross River Bank is responsible for ensuring the C+ Loans program operates in compliance with all applicable laws.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.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.Requiring borrowers to sign loan documents without knowing the essential terms and conditions of the loan.The FDIC determined that Cross River Bank and FFAM violated federal law prohibiting unfair and deceptive practices, by, among other things: Cross River Bank and FFAM Violated Federal Law Prohibiting Unfair and Deceptive Practices Consumers are charged a settlement fee of up to 25% of each debt enrolled in Freedom Debt Relief’s program. C+ Loans were marketed as a way for consumers to quickly resolve their outstanding debts. C+ Loans are offered exclusively to consumers who contract with Freedom Debt Relief, an FFAM-affiliated debt settlement company. Additionally, the FDIC Orders assess civil money penalties of $641,750 against the bank, and $493,500 against FFAM.Īccording to the FDIC, Cross River Bank originates C+ Loans, an unsecured debt consolidation loan product, through FFAM. Although the exact amount of restitution has not yet been finally determined, $20 million has been placed in a segregated account for the purpose of providing restitution to harmed consumers. The FDIC Orders require restitution to harmed consumers. $20 Million Placed in Segregated Account for Restitution to Harmed ConsumersĪs part of the settlement, Cross River Bank and Freedom Financial Asset Management (“FFAM”) stipulated to the issuance of respective Consent Orders, Orders for Restitution, and Orders to Pay Civil Money Penalties (the “FDIC Orders”). ![]() ![]() ![]() Additionally, the FDIC found the bank and Freedom Financial Asset Management violated the Truth in Lending Act (“TILA”) and Electronic Fund Transfer Act (“EFTA”). On March 28, 2018, the Federal Deposit Insurance Corporation (“FDIC”) announced settlements with Cross River Bank, Teaneck, New Jersey, and its institution-affiliated party, Freedom Financial Asset Management, LLC, San Mateo, California, for unfair and deceptive practices in violation of Section 5 of the Federal Trade Commission (FTC) Act related to the marketing and origination of Consolidation Plus Loans (“C+ Loans”). FDIC Announces Settlements with Cross River Bank and Freedom Financial Asset Management ![]()
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