A federal judge on Friday refused to dismiss the suit against the Federal Deposit Insurance Corp., the Federal Reserve and the Office of the Comptroller of Currency. U.S. District Judge Gladys Kessler in Washington threw out some claims while allowing others to go forward.

The lenders group, in a complaint filed last year, said its members had been unfairly targeted in the government’s anti- fraud “Operation Choke Point” initiative. The association claims the probe -- also linked to FDIC concerns over banks lending to high-risk businesses, including ammunition dealers, online gambling and pornography merchants -- led regulators to deny payday lenders their constitutional rights to hold bank accounts and pursue their chosen line of business.

The judge said in her decision it was clear payday lenders had suffered harm to their businesses.

Payday lenders offer small, short-term loans originally meant to tide the borrower over until the next paycheck. Consumer advocates have long argued such arrangements trap poor borrowers in a cycle of debt in which they take out new loans to cover older ones.

Measured as annual percentage rates, payday loan interest can sometimes exceed 500 percent, according to the Consumer Financial Protection Bureau.

Operation Choke Point was the Justice Department’s effort targeting fraud by businesses such as payday lenders. The FDIC, which aided the investigation, separately issued a public list of risky merchant categories, which it later withdrew amid criticism from Republican lawmakers and the industries named. 

The other financial regulators were also accused of subjecting certain types of businesses to unfair treatment. Representatives of the Fed, OCC and FDIC declined to comment on the court decision.

Charles Cooper, a lawyer for payday lenders, said he was pleased that the ruling validated the legal basis of the suit’s claims.

“Government agencies violate the Constitution when they use regulatory coercion and back-room administrative strong-arming to deprive law-abiding Americans of their bank accounts, their livelihoods, and their right to due process of law,” Cooper said in a statement.

The Alexandria, Virginia-based lenders group has more than 40 member businesses, according to its website. At a brick-and- mortar lender, payday loans typically are secured by post-dated checks. Online borrowers furnish a bank account number for direct debits.

The parties are due back in court for a conference on Oct. 22.

This month, the FDIC’s inspector general concluded an investigation into the agency’s involvement in Choke Point, saying in a report that the probe uncovered no evidence that the FDIC used its 2011 high-risk businesses list to target financial institutions for engaging with such merchants.

“With the exception of payday lenders, we found no instances among the financial institutions we reviewed where the FDIC pressured an institution to decline banking services to a merchant on the high risk list,” the inspector general said, adding that the agency’s concerns with payday lenders preceded Choke Point.

Doreen Eberley, a senior risk-management official at the FDIC, wrote in a Sept. 10 letter to the inspector general that her agency “neither prohibits nor discourages banks from providing banking services to entire categories of merchants” -- a point she said they reinforced with FDIC staff and the banks.

One congressional report reached a different conclusion. House Republicans said in December that the regulator pressed banks to cut ties with legally run payday lending operations and “misled” Congress about the depth of its involvement. The FDIC said its action was an unintentional error and that banks are neither prohibited nor discouraged from providing services to any customer in compliance with applicable laws.

The case is Community Financial Services Association of America Ltd. v. Federal Deposit Insurance Corp., 14-cv-00953, U.S. District Court, District of Columbia (Washington).