The federal banking agencies are defending themselves against critics who say that payday loan shops, check cashers, firearms sellers and other frowned-upon merchants are losing their bank accounts due to overzealous regulation.

At a congressional hearing Tuesday, witnesses from the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Federal Reserve Board will testify that it's ultimately up to individual banks, not their regulators, to make decisions about particular business relationships. American Banker obtained copies of the three agencies' written testimony Monday.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.