WASHINGTON — House Judiciary Committee members plan to roll out legislation after the August recess to eliminate an Obama era initiative that pressured financial institutions to drop accounts with businesses the administration found to be reprehensible.
Known as Operation Choke Point, the Obama Justice Department began pressuring financial institutions in 2013 to deny accounts for legal business operations like firearms dealers, payday lenders, porn merchants and drug paraphernalia vendors. The initiative essentially “choked” off these industries from mainstream banking institutions, sending them to cash only or smaller financial firms willing to take their business.
Missouri Republican Rep. Blaine Luetkemeyer reintroduced the bill last month to end Operation Choke Point. Luetkemeyer expects a hearing and then a markup of the bill after the August recess. (RELATED: Lawmaker Reintroduces Bill To Eliminate Operation Choke Point)
“Basically, what’s happening is the DOJ and or the FDIC are intimidating the banks and cutting off financial services to certain business or entire industries of business that the FDIC and the DOJ don’t think morally have the right to exist. That’s their words not mine. Those are in their emails, and the reason that they’re putting the pressure on the banks to do this,” Luetkemeyer told TheDC Monday night.
The Missouri Republican explained further, “The bill was incorporated in the CHOICE Act. And we want to see how far it goes. So, we’re kind of get a little direction from the Senate. If they include it in their financial reform bill, then it won’t be necessary, but we filed a bill to be able to offer it if we see that the CHOICE Act is going to stall over [in the Senate].”
House Judiciary Chairman Bob Goodlatte, Luetkemeyer and California Republican Rep. Darrell Issa met with members of industries harmed by Operation Choke Point last Friday. Jamie Fulmer senior vice president of public affairs at Advance America, a payday lending firm, was one of the attendees at the round table told The Daily Caller last Friday how the Obama era initiative hurt his company’s business.
“Since 2013 our company has lost 21 banking relationships and so, you know, at the core, the issue is that it was not based on any fundamental reason other than a high-ranking official at several regulatory agencies that found personal disfavor with you. They would use their authority and get these regulatory entities to leverage their regulatory authority over the banks and force them to cease banking relationships,” Fulmer said.
He added, “Every time we lose a bank it creates a new whole host of problems and underscored by the fact that at the end of last year in November we lost our largest remaining national bank, which was U.S. Bank, which roughly banked about 60 percent of our centers. We were given, without notice without warning, three months to terminate these accounts.”
— Blaine Luetkemeyer (@RepBlainePress) June 23, 2017
Fulmer was among several individuals from industries at the roundtable on Capitol Hill last Friday discussing with lawmakers how Operation Choke Point harmed their businesses.
“For us, it’s a fundamental business issue. Without banking services, we can’t meet our depository needs in our 2,000 centers across the country. We have difficulty making our payroll payments to our employees as well as a payment processing to our vendors and landlord. Things like that,” said Fulmer. “You know we’ve lost five banking relationships in the last year, and while a company of our size has been able to cobble together a complex network of workarounds to keep our doors open, it is very uncertain whether or not these work-arounds are sustainable.”
California Republican Rep. Darrell Issa told TheDC on Monday why pushing these businesses to cash only circumstances makes it more difficult to track those who end up committing crimes and terrorist acts.
“In the global war on terror or one of the most important tools of the of the bad people is can. We monitor money in order to have tractability of terrorism,” Issa said. “By taking people out of banking relationships, we force them into a cash underground economy, so it’s a national security issue — rather than to take at risk companies out of banking but actually to put them into banking.”