FDIC resolves lawsuit brought by payday lenders over termination of bank accounts

A case involving payday lenders and access to bank accounts has been resolved with the Federal Deposit Insurance Corp. (FDIC) agreeing to take certain actions, the agency said Wednesday.

In a release, the FDIC said it reached an agreements with lenders Advance America, Cash Advance Centers, Inc.; Check Into Cash, Inc.; and Northstate Check Exchange. The entities had sued the FDIC alleging terminations of payday lender bank accounts. The agency said that, in exchange for the plaintiffs’ agreement to dismiss the lawsuit, the FDIC is issuing:

  • a statement summarizing the FDIC’s longstanding policies and guidance regarding the circumstances in which the FDIC recommends that a financial institution terminate a customer’s deposit account and reiterating preexisting public guidance to financial institutions about providing banking services and carrying out Bank Secrecy Act (BSA) obligations; and
  • a cover letter transmitting the statement to the plaintiffs that reiterates prior correspondence from the FDIC chairman, summarizes applicable FDIC policy, and notes that the FDIC is conducting additional training of its workforce.

“Neither the summarizing statement nor the cover letter represents a change in the FDIC’s policies or guidance, and all of the FDIC’s existing applicable regulations and guidance documents remain in full force and effect,” the agency said.

FDIC Resolves Payday Lender Lawsuit

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