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Last update: 10/20/14

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ICBA Appreciates FDIC’s Clarification for Institutions Establishing Account Relationships with Third-Party Payment Processors

Washington, D.C. (July 29, 2014)—Camden R. Fine, president and CEO of The Independent Community Bankers of America® (ICBA) released this statement following the Federal Deposit Insurance Corporation’s (FDIC) clarification to its supervisory approach to payment processing relationships with merchant customers that engage in higher-risk activities.

“ICBA appreciates the FDIC’s latest clarification of its supervisory approach for institutions maintaining account relationships with third-party payment processors (TPPPs). We hope that this clarification will result in the FDIC and its field examiners ceasing to apply unwarranted scrutiny to bank relationships deemed ‘high risk’ or that supposedly create ‘reputational risk.’ Community banks are the best judge of their own reputation risk and have every incentive to safeguard their own reputations through proper initial and ongoing screening of customers.

“The FDIC list was used in conjunction the Justice Department’s Operation Choke Point efforts. ICBA has been the leading advocate on the Operation Choke Point concerns on behalf of community banks—submitting letters and testifying on the issue.

“ICBA commends The End Operational Choke Point Act of 2014 (H.R. 4986) introduced by Rep. Blaine Luetkemeyer (R-Mo.), which would preserve the ability of banks to serve legal and legitimate business customers without undue pressure from law enforcement or examiners. This legislation, combined with today’s FDIC announcement is a step in the right direction.

“ICBA will remain vigilant on this important issue. The association will continue to request the immediate suspension of the Justice Department’s Operation Choke Point initiative, and will request that the agency re-focus its resources directly on the businesses that may be violating the law.”

About ICBA
The Independent Community Bankers of America®, the nation’s voice for more than 6,500 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services.

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