A 2013 initiative instituted by the Department of Justice (DOJ) to investigate banks who do business with firearm dealers, payday lenders, and other companies believed to be at higher risk for fraud and money laundering has been cancelled.
The program, known to critics as Operation Choke Point, was ended by the Trump Administration DOJ at the request of U.S. Reps. Blaine Luetkemeyer (R-MO), Jeb Hensarling (R-TX), Bob Goodlatte (R-VA), Tom Marino (R-PA), and Darrel Issa (R-CA).
“After years of fighting against the Obama Administration’s Operation Choke Point initiative, I applaud President Trump’s Department of Justice for ending this ill-advised program,” Luetkemeyer said. “I want to thank Chairmen Hensarling and Goodlatte and Reps. Marino and Issa for their support. While I am pleased the Department of Justice has stood up and made the right decision, it is my hope the federal banking regulators follow suit without delay.”
Luetkemeyer also introduced a bill, the Financial Institution Customer Protection Act (H.R. 2706), to prohibit future administrations from initiating a similar program.
The bill would dictate that agencies such as the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, among others, could not request or order a financial institution to terminate a banking relationship unless the regulator has material reason. Any account termination requests or orders would be required to be made in writing and rely on information other than reputational risk.
In addition, the legislation strikes the word “affecting” in the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), replacing it with “by” or “against.” This is to ensure that the DOJ’s once broad interpretation of the law is limited and the original intent of the statute is restored.