By: Sen. Mike Crapo –
Last summer, news reports surfaced regarding a U.S. Department of Justice-led initiative that targets certain industries’ ability to access banking services without first showing the companies are not breaking the law. Rather than targeting bad actors for illegal activity, this effort, known as Operation Choke Point, is causing banks to deny or terminate credit lines due to fear of DOJ subpoenas or unjustified regulatory action by federal banking regulators. Legitimate industries – legal, but not acceptable, apparently, to the administration – are now experiencing difficulty finding essential banking services. This commerce-stifling, unjust federal overreach must stop.
Small businesses, banks and payments processors have all been targets of this expansive regulatory approach. The U.S. Chamber of Commerce has stated that enforcement agencies have the tools to root out fraud and predation directly, and the chamber supports their efforts to do so. But under Operation Choke Point, government authorities punish entire categories of lawful businesses by instilling fear in the institutions that bank with them. This has left banks with little choice but to terminate longstanding relationships with customers because of inappropriate explicit or implicit pressure.
Now, who are these disfavored industries? One of them is the firearms and ammunition industries in the United States. I have heard from several Idaho business owners involved in the guns and ammunition business who experienced difficulty finding essential banking services as a result of this fear and uncertainty on the part of the banks.
At the urging of many members of Congress, the Federal Deposit Insurance Corporation updated its regulatory guidance and retracted the target list. The withdrawal of the list of targeted businesses was a good first step, but we must eliminate this inappropriate DOJ program.
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