The Federal Deposit Insurance Corp. has failed to stop banks from automatically severing relationships with clients that process payments for pawnshops, payday lenders and other purportedly high-risk vendors, lawmakers said Tuesday. The criticism, forwarded during a House Financial Services Subcommittee on Oversight and Investigations hearing, followed testimony from FDIC Chairman Martin Gruenberg on how his agency has sought to lessen the impact of a 2011 list of high-risk third-party payment processors (TPPPs) seen by banks as reason to turn away the businesses. After rescinding the list last year, the FDIC in January ordered its examiners to put in writing any...
A group of Republican lawmakers are petitioning regulators to more thoroughly distance themselves from a federal strategy that reportedly pressured financial institutions to terminate their relationships with third-party payment processors.
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