Payment Processor Relationships Revised Guidance / FIL-3-2012

The Federal Deposit Insurance Corporation (FDIC) issued a revised guidance in 2012, addressing potential risks associated with relationships with third-party entities that process payments for telemarketers, online businesses, and other merchants. The guidance emphasizes that these relationships can pose increased risk to institutions and require careful due diligence and monitoring.

“Financial institutions should ensure that their contractual agreements with payment processors provide them with access to necessary information in a timely manner. These agreements should also protect financial institutions by providing for immediate account closure, contract termination, or similar action, as well as establishing adequate reserve requirements to cover anticipated charge backs.”