FDIC Settles Payday Lending Lawsuit and Issues Summarizing Policy Statement
On May 22, the Federal Deposit Insurance Corporation (“FDIC”) announced that it had resolved the litigation of Advance America et al. v. FDIC et al. in the U.S. District Court for the District of Columbia. In that case, the plaintiffs alleged that the FDIC and the Office of the Comptroller of the Currency overstepped their regulatory authority in connection with a 2013 initiative by the U.S. Department of Justice known as “Operation Choke Point.” Under Operation Choke Point, federal regulators investigated banks servicing targeted business sectors, including payday lending. Advance America Cash Advance and its co-plaintiffs asserted that FDIC officials acted to cut off payday lending businesses’ access to U.S. banks and financial services.