Only July 30, The House Financial Services Committee marked up and passed out of committee H.R. 766, the Financial Institution Customer Protection Act, which was sponsored by Representative Blaine Luetkemeyer (R-MO). If this bill becomes law, the Federal Deposit Insurance Corporation (FDIC) would be required to inform banks that they are not prohibited nor discouraged from servicing customers in the firearms and ammunition industries.  H.R. 766 would also provide bank customers with the tools they need to help enforce these requirements.  The need for this legislation shows the severity of abuses taking place under Operation Choke Point (OPC), which the NRA has reported on here and here.    

This legislation would institute numerous reforms to bring more transparency and accountability to federal oversight of banks, all aimed at preventing the sort of unchecked abuse at the heart of OPC. For example, the bill would require regulators that suggest or order a bank to terminate a customer’s account to have material reasoning, with reference to any specific laws or regulations the enforcement agency believed were being violated. Moreover, no such reason could be based solely on “reputational risk,” the supposed basis for including firearm and ammunition businesses within the scope of OPC’s “high risk” target list. Regulating agencies would also have to submit annual reports to Congress documenting any such requests or orders. Finally, the bill would make important amendments to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, which agencies have cited as authorization for OPC, to clarify the law’s scope so as conclusively to preempt this dubious justification.

In February, Rep. Luetkemeyer published excerpts of a FDIC whistleblower’s letter, which further substantiate the illegitimate ends of OPC, and proving the necessity of the bill. The individual wrote: “I am an employee of the Federal Deposit Insurance Corporation (FDIC). I was proud of my job and the FDIC’s mission before Operation Choke Point. During the past two years, however, we have been told to examine banks much more harshly, if they deal with a class of customers prohibited by Choke Point.” Even with such evidence, some may have difficulty believing (or accepting) the level of corruption in such regulatory over-reach, but it plainly does exist. 

Shortly after H.R. 766 passed out of the House Financial Services Committee, Rep. Luetkemeyer reported, “I am pleased a group of bipartisan Members of the Financial Services Committee showed there is a need to curb the abuse of authority seen in Operation Choke Point. This legislation needs to be codified into law so that federal agencies don’t fall into the illegal and abusive practices seen out of the FDIC and Justice Department. I hope this legislation is quickly brought to the floor so we can halt this unconstitutional and unprecedented program and return order and reason to financial institution examination processes.”

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