FDIC Supervisory Approach to Payment Processing Relationships

On Friday of last week, the FDIC issued a clarifying Financial Institution Letter FIL-43-2013 related to facilitating customer payment processing, and the recognition that the regulatory risks of facilitating “high-risk activities” of business customers lies with the bank. Of note is this guidance only footnotes that higher-risk activities are typically characterized by high rates of return, high rates of unauthorized transactions, consumer complaints, or evidence of state or federal regulatory or criminal actions against the business customer. We will not be surprised to see this clarification expanded to encompass the CFPB efforts to solicit and record customer complaints and the push to require deeper exploration of your business customers. We believe that the inherent responsibility for expanded monitoring of available market information is a solution we will deliver with future releases of VendorINSIGHT®.

FDIC Supervisory Approach to Payment Processing Relationships With Merchant Customers That Engage in Higher-Risk Activities

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