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FDIC Risk Memo, RBS Bad Assets, Dodd-Frank: Compliance

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Banks should make case-by-case decisions on whether to deal with potentially risky customers instead of applying broad judgments based on business type, the Federal Deposit Insurance Corp. said in a letter to banks released Wednesday.

The new directive reflects a retreat from efforts to steer lenders away from high-risk merchants, which drew criticism from Republican lawmakers who said the FDIC targeted legitimate businesses. The FDIC said examiners must tell banks in writing when directing them to drop a customer and urged lenders to contact the agency when examiners overstep their authority.