Bank Accounts for Payday Loan, Check Cashers and MSB Lenders

Great news today for consumers and small dollar lenders regarding bank accounts:

Financial Institution Letter
January 28, 2015

Statement on Providing Banking Services

The FDIC encourages insured depository institutions to serve their communities and recognizes the importance of the services they provide. Individual customers within broader customer categories present varying degrees of risk. Accordingly, the FDIC encourages institutions to take a risk-based approach in assessing individual customer relationships rather than declining to provide banking services to entire categories of customers, without regard to the risks presented by an individual customer or the financial institution’s ability to manage the risk. Financial institutions that can properly manage customer relationships and effectively mitigate risks are neither prohibited nor discouraged from providing services to any category of customer accounts or individual customer operating in compliance with applicable state and federal law.

The FDIC is aware that some institutions may be hesitant to provide certain types of banking services due to concerns that they will be unable to comply with the associated requirements of the Bank Secrecy Act (BSA). The FDIC and the other federal banking agencies recognize that as a practical matter, it is not possible for a financial institution to detect and report all potentially illicit transactions that flow through an institution.1 Isolated or technical violations, which are limited instances of noncompliance with the BSA that occur within an otherwise adequate system of policies, procedures, and processes, generally do not prompt serious regulatory concern or reflect negatively on management’s supervision or commitment to BSA compliance. When an institution follows existing guidance and establishes and maintains an appropriate risk- based program, the institution will be well-positioned to appropriately manage customer accounts, while generally detecting and deterring illicit financial transactions.

Any FDIC-supervised institution concerned that FDIC personnel are not following the policies laid out in this statement may contact the FDIC’s Office of the Ombudsman (OO) at the following dedicated toll-free number, 1-800-756-8854, or dedicated email address, bankingservicesOO@fdic.gov. Communications with the OO are confidential. The FDIC also has an independent Office of Inspector General (OIG) that is charged with addressing allegations of waste, fraud, and abuse related to the programs and operations of the FDIC. Individuals or institutions may contact the FDIC OIG through its Web site at www.fdicoig.gov by using the “Hotline” button, by phone at 1-800-864-3342, or by email at ighotline@fdic.gov.

Doreen R. Eberley
Division of Risk Management Supervision

Here’s a link to the FIL and the “Letter:” https://www.fdic.gov/news/news/financial/2015/fil15005.html


Comments ( 3 )
  • Mark says:

    Operation Choke Point is simply President Obama’s strategy for outlawing businesses that 30+ state legislatures have determined are legal.

  • Payday Loan Industry says:

    “The FDIC will now require bank examiners to put any recommendation to end a banking relationship in writing. The bank examiner also must explain what law or regulation they believe is or was being violated.”

    During the Operation Choke Point investigation by Congress, emails revealed that FDIC investigators were influencing banks decisions on who to do business with – STRONGLY communicating to banks about the businesses the regulators don’t like, and pressuring banks to cut credit or close those accounts, effectively discouraging entire industries.

    Industries affected include guns, consumer lenders, auctions…

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