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The Green SheetGreen Sheet

Monday, March 3, 2014

DOJ probes PNC's merchant services practices

PNC Financial Services Group Inc., a leading provider of merchant services and one of First Data Corp.'s top five alliance partners, revealed today that it has been subpoenaed by the Consumer Protection Bureau of the U.S. Department of Justice. The Bureau is "seeking information concerning the rate of return rate for certain merchant and payment processor customers" that have depository relationships with PNC, the company stated in its filing today with the U.S. Securities and Exchange Commission.

"We believe the subpoena is intended to determine whether, and to what extent, PNC may have facilitated fraud committed by third parties against consumers. We are cooperating with the subpoena," the statement concluded.

A spokesman for PNC, Fred Solomon, declined to comment beyond the statement, which appeared in the Pittsburgh-based banking company's latest 10K filing with the SEC. PNC is no stranger to federal investigators. In its latest 10K filing, the company also discussed subpoenas it had received from the U.S. Attorney's Office for the Southern District of New York regarding sub-prime lending and foreclosure activities by National City Corp., a Cleveland-based bank PNC acquired in 2008.

In December 2013, PNC agreed to pay $35 million to settle fair-lending violations by National City involving minority borrowers. That marked the first fair-lending case to be pressed jointly by the Justice Department and the Consumer Financial Protection Bureau. end of article

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