Five committee and subcommittee chairmen from the House of Representatives today called on the heads of the executive branch agencies most closely connected with Operation Choke Point to repudiate the initiative and make it clear that financial institutions can serve legal businesses without threat of enhanced supervision.
The letter was signed by House Financial Services Committee Chairman Jeb Hensarling (R-TX), House Judiciary Chairman Bob Goodlatte (R-VA), Regulatory Reform, Commercial and Antitrust Law Subcommittee Chairman Tom Marino (R-PA), Financial Institutions and Consumer Credit Subcommittee Chairman Blaine Luetkemeyer (R-MO), and Courts, Intellectual Property & the Internet Subcommittee Chairman Darrell Issa (R-CA). It was sent to Attorney General Jeff Sessions, Federal Reserve Board Chair Janet Yellen, and Acting Comptroller Keith Noreika, all of whose agencies took part in Operation Choke Point during the Obama administration.
The abusive tactics of Choke Point, which were detailed in a CEI report in 2014, are still affecting businesses today. The letter recounts testimony given in June this year to the House Judiciary Committee that reveals how badly affected some businesses, their owners, employees, and customers were by the overreach of regulators on personal crusades:
One of the participants – a veteran and a former law enforcement professional – described how the bank came to him and said that, the government “came in like a bunch of thugs” and pressured them to stop serving his small firearms business. Without access to banking services, his business faltered. He concluded, on the verge of tears, by stating that there was “no fix” for what happened to him…Participants from other industries told of losing access to banking services as recently as April 2017.
Operation Choke Point circumvented the constitutional, legislative, and regulatory processes to ensure a de facto ban on disapproved activities such as firearms sales, pornography, and payday lending.
The letter urges the regulators to ensure that, “Financial institutions should be given explicit assurance that they may serve these unfairly targeted industries just like any other legitimate businesses. Institutions should also be encouraged to restore long-standing relationships with lawful, targeted industries.”
While this would provide significant relief to many businesses under threat of being cut off from banking services, the question still remains over how much the Consumer Financial Protection Bureau is using its supervisory power to target banks. As CFPB Director Cordray is not beholden to Congress thanks to the Bureau’s unconstitutional structure, that question may only be answered when President Trump is able to appoint a successor. That is all the more reason for the President to fire Director Cordray for his many abuses of power.