WASHINGTON (1/29/15)--In a move that American Banker said was being hailed as the beginning of the end for Operation Choke Point, the Federal Deposit Insurance Corp. (FDIC) issued a Financial Institution Letter Wednesday meant to encourage institutions under its supervision "to serve their communities" and to assess risk of individual customer relationships rather than take a wholesale approach of declining to provide banking services to entire categories of customers.
In a release, the agency notes that it has reinforced its policies on managing customer relationships to FDIC examiners and other supervisory staff.
The Credit Union National Association is seeking similar guidance from the National Credit Union Administration for credit unions and for NCUA examiners.
The FDIC letter also says that a financial institution should assess its own ability to manage any customer risk. In a release, the agency notes that financial institutions that "properly manage customer relationships and effectively mitigate risks are neither prohibited nor discouraged from providing services to any category of customer accounts or individual customers operating in compliance with applicable laws."
"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," the FDIC says. The agency also states that FDIC examiners must provide notice in writing for any case in which an institution is directed to exit a customer relationship.