Conversations recorded by a Wisconsin gun store owner provide perhaps the clearest glimpse yet into how the federal government uses regulators to target legal firearm and ammunition sellers.
“Our hands are tied by it,” a regional manager with Heritage Credit Union told Hawkins Guns owner Mike Shuetz of federal regulations which forced the institution to close Shuetz’s bank accounts in November.
Recordings of Shuetz’s conversations with the manager and a bank teller, which were published online by the U.S. Consumer Coalition, make it clear that the National Credit Union Administration (NCUA) examined the credit union’s books and forced it to close Shuetz’s account — a move he blames on a Department of Justice initiative called Operation Choke Point.
Schuetz’s saga began on Nov. 13, when he says Heritage Credit Union informed him that it would have to close his bank accounts.
“I received a call from Heritage Credit Union in Hawkins, where I set up my business account for Hawkins Guns. They told me I had to close the account because they do not service companies that deal in guns,” wrote Shuetz on Facebook at the time.
Promising to get to the bottom of the account closure, Shuetz, who was in both the U.S. Army and Marine Corps and worked as a probation and parole officer, went to the credit union and asked questions.
He also recorded answers.
During those conversations, the Heritage Credit Union regional manager confirmed for Shuetz that NCUA examiners forced the account closures.
“The examiners from NCUA — that’s who governs us — it’s a federal government agency. They came in and did an exam on everything,” the manager told Shuetz. (RELATED: Gun Seller Dropped By Bank Refuses Their Attempt ‘To Kiss And Make Up’)
“There was about a dozen crawling of them crawling around the building. And they were just hammering us.”
“So they came in, looked at our books, looked at everything and said “here are some accounts that we feel that we’re going to regulate you on,'” the manager explained, adding “so they kind of put the screws to us as far as what we could and couldn’t do.”
“Our hands were tied by it,” he said.
“We never used to have to do that stuff,” the manager told Shuetz, explaining that after a recent merger, “our asset size grew to over $250 million, and we’re your that size it triggers NCUA examiners then coming in and looking at you closer.”
Numerous gun and ammunition dealers, payday lenders, and pawn shops have claimed they were unfairly targeted by the regulation by Operation Choke Point. Ostensibly designed to fight consumer fraud, Operation Choke Point essentially threatens onerous oversight on financial institutions which do business with companies in industries listed as “high-risk.”
Gun and ammunition dealers are on that list.
But so far, few bankers have spoken up about how federal regulations force them to avoid doing business with companies in certain industries.
“We’re really not anti-gun as a company, but our hands are tied,” the Heritage Credit Union manager told Shuetz, adding that he is personally “very pro-gun” and that he has a concealed carry license.
“This is just a back door way for those wanting to infringe upon your rights to keep and bear arms and is nothing more than discrimination to gun owners,” Shuetz wrote on Facebook when he first learned of Heritage Credit Union’s decision back in November.
An email request for comment from the NCUA was not immediately returned.
Update: NCUA spokesman John Fairbanks denied that Operation Choke Point factored into the decision to close Shuetz’s bank account.
“NCUA cannot comment on specifics of any matter involving credit union supervision,” Fairbanks said. “NCUA does not have a policy specific to any business, nor do we instruct a credit union about what individuals or businesses it can serve. The decision to open, close or decline an individual or business account generally lies with the credit union. As the provider of insurance coverage for the accounts of nearly 100 million members in 6,500 credit unions, NCUA requires all those credit unions to evaluate risks posed by accounts and maintain the necessary capacity to effectively manage those risks.”