After claiming it was hiring an outside law firm to investigate allegations of employee misconduct, the Federal Deposit Insurance Corporation received thanks from Rep. Blaine Luetkemeyer (R-Mo), Chairman of the Financial Institutions and Consumer Credit Subcommittee, who credited both it and the Office of the Comptroller of Currency for "swift responses."
"I’m happy see the regulators’ willingness to ensure regulation is never again borne of personal biases or political motivations," Luetkemeyer said in a press release.
Allegations against FDIC employees stem from a suit brought by payday lenders (Advance America, et al. v. Federal Deposit Insurance Corporation) and includes accusations that the banking regulator attempted to coerce banks into cutting off relationships with payday lenders through threats that included lower ratings and more intrusive examinations. Payday lenders argue these actions came as part of a larger, partisan effort against the industry, called "Operation Choke Point," by the U.S. Department of Justice under President Obama.
Though FDIC Chairman Jelena McWilliams said in letter to Luetkemeyer that it had retained an outside law firm to "better ascertain the effectiveness" of the FDIC response to claims of misconduct, she also noted that examiner training was being updated to use case studies based on the allegations. "I am troubled that certain FDIC employees acted in a manner inconsistent with FDIC policies in what has been generically described as ‘Operation Choke Point,’" McWilliams said.
Luetkemeyer originally called on McWilliams and Comptroller Joseph Otting to investigate past misconduct, following the court’s unsealing of various emails submitted as evidence in Advance America. By his own account, Luetkemeyer, a representative from Missouri’s 3rd district, formerly served as a bank regulator for the state of Missouri, and has "lead the charge" against Choke Point over the last five years.
The gratitude from Luetkemeyer’s office comes even as Otting told him the OCC had no part of Operation Choke Point and that "pleadings recently submitted by the plaintiffs [in Advance America] do not establish otherwise."
"I know we are both committed to our nation having a safe and sound banking system that treats all customers fairly," Otting wrote in his letter Luetkemeyer. "To be clear, the OCC has no policy or program that targets any business operating within state and federal law, and I am committed to ensuring that it does not have such policy or program in the future."
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