Ending Operation Choke Point

Yesterday The Daily Signal posted an article about five Republican Congressmen who have asked Attorney General Jeff Sessions to end Operation Choke Point.

The article explains:

As reported extensively by The Daily Signal, the Obama Justice Department, under Attorney General Eric Holder, designed Operation Choke Point in 2012 to “attack internet, telemarketing, mail, and other mass market fraud against consumers, by choking fraudsters’ access to the banking system.”

The program works by using federal banking regulators to pressure banks out of doing business with entire industries the government declares to be “high risk,” choking their access to the U.S. banking system.

But instead of simply targeting illegal, fraudulent businesses, the program also affected legal business owners, who complained they were being unfairly denied credit and losing access to third-party payment processors central to running their businesses.

Over the past two years, The Daily Signal documented multiple cases of banks’ denying legal business owners access to banking services.

I reported in June of 2014 (here) that Mark Cohen, owner of Powderhorn Outfillters, a store in Hyannis, Massachusetts, that sells guns was denied a loan by TD bank because of the fact the he sold guns.

I quoted a Breitbart.com article, which reported:

Cohen explained what happened in an interview with The Daily Caller on Friday.

“This year I went to apply for a line of credit, and the bank manager came by the store,” said Cohen, adding that he’s known the bank manager for over 20 years.

“Mark, I apologize,” she said, according to Cohen, “your credit history is great, but the bank is turning you down because you sell guns.”

That is only one example of how Operation Choke Point was used to interfere with honest businessmen trying to earn a living. Payday lenders were also targeted by Operation Choke Point, and Community Financial Services Association of America, which represents some of the nation’s largest short-term lenders, such as Advance America, filed a lawsuit.

The Daily Signal provides a few details about the lawsuit:

The suit named the Federal Deposit Insurance Corp. (FDIC), the government agency responsible for creating a “high risk list” of industries to target. That list grouped categories such as “racist materials” and “credit card schemes” with “firearms” and “tobacco” sales.

In July, the U.S. District Court for the District of Columbia ruled that payday lenders may press forward with their lawsuit against the FDIC and begin the discovery phase. That phase allows the plaintiffs to depose government officials under oath and examine documents and emails related to the program.

“We are thrilled by the court’s order to enter the discovery phase, as this illegal federal program has been unduly harming legal entities for years,” Dennis Shaul, CEO of the Community Financial Services Association, said in a July press release. “It is high time that the government’s unlawful and unjust crusade against lawful and licensed businesses be stopped.”

The article also reports the following:

In April 2016, one of President Barack Obama’s top Justice Department officials behind Operation Choke Point admitted the program had “unintended but collateral consequences” on banks and consumers.

No kidding. Actually, I am not convinced the consequences were unintended.

 

The Obama Administration’s War On Guns

The Daily Signal posted an article today about the efforts of Senators Ted Cruz of Texas and Mike Lee of Utah to unravel the government’s Operation Choke Point.

The article reports:

“Under President Obama’s reign, the DOJ has abandoned its longstanding tradition of staying out of politics and has instead become a partisan arm of the White House,” Cruz said. “The Obama administration initiated Operation Choke Point to punish law-abiding small businesses that don’t align with the president’s political leanings. The DOJ should not be abusing its power by trying to bankrupt American citizens for exercising their constitutional rights.”

The bill, called the Financial Institution Customer Protection Act, bans federal agencies that oversee banks from requesting or ordering banks to terminate customer accounts “unless the regulator has material reason.”

The measure also requires banking regulators to put in writing any “formal or informal” requests for account termination, and requires those regulators to file an annual report to Congress regarding those requests. To scale back Operation Choke Point or any similar initiatives, the bill also amends the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

I have written articles about the impact of Operation Choke Point before. You can use the search engine at the top of the page to find them. Operation Choke Point is an obvious example of government overreach. Gun ownership is a right guaranteed by the U.S. Constitution, and the government has no right to interfere with that right. Operation Choke Point is one of several back door methods the Obama Administration used to attempt to take guns away from lawful gun owners. Had they come up with a plan to take guns away from unlawful gun owners, I might have been willing to listen.

The article further reports:

An identical version of the bill passed the House of Representatives 250-169 in February with bipartisan support.

According to government documents, Operation Choke Point was designed by the Justice Department in 2012 to “attack Internet, telemarketing, mail, and other mass market fraud against consumers, by choking fraudsters’ access to the banking system.”

The Justice Department carried out the program by using its investigative powers and partnering with federal regulating agencies such as the Federal Deposit Insurance Corporation (FDIC) that provide formal guidance to banks.

Since the program’s inception, many gun sellers, pawn shops, and short-term lenders reported their bank accounts being shut down.

…If the bill passes the Senate, it will then head to Obama’s desk for approval.

Hopefully one of the first things the next President will do (regardless of who is elected) will be to cut back on some of the abuses of power that have gone on during the Obama Administration.

The Quiet Government War Against Guns

According to a Breitbart.com article posted on January 8, 2014, Operation Choke Point is an outgrowth of the President’s Financial Fraud Task Force, established by President Obama by Executive Order in 2009.

Breitbart reports:

It (Operation Choke Point) also appears to have been kicked off in secret by the Department of Justice, FDIC, and the CFPB in early 2013 without the requisite statutory authority. Officials at the Department of Justice have withheld information about the program from Congress, though they have eagerly shared details with federal financial institution examiners authorized to supervise and discipline the nation’s banks and related financial institutions.

In an article posted yesterday, the Daily Caller describes Operation Choke Point as follows:

Operated under a cloud of secrecy by the Department of Justice and in coordination with the Federal Deposit Insurance Corporation, Operation Choke Point forces banks to keep a closer eye on companies in industries that are deemed “high risk”, including gun and ammunition dealers, coin dealers, payday lenders, and debt consolidation service providers.

Sounds harmless enough, right? Well, the story at the Daily Caller was about a Massachusetts gun shop owner who was denied a loan from TD Bank because he owned a gun shop.

This is the story:

Mark Cohen, who owns Powderhorn Outfitters, a Hyannis, Mass. gun retailer, said that his longtime bank, TD Bank, refused to extend a line of credit because of the business he is in.

Cohen explained what happened in an interview with The Daily Caller on Friday.

“This year I went to apply for a line of credit, and the bank manager came by the store,” said Cohen, adding that he’s known the bank manager for over 20 years.

“Mark, I apologize,” she said, according to Cohen, “your credit history is great, but the bank is turning you down because you sell guns.”

Cohen told his friend and lender that he would have no choice but to close his accounts with the bank since they couldn’t provide the services his company needs.

…Cohen believes that TD Bank didn’t want to do business with his gun store because of a government initiative called Operation Choke Point.

TD Bank has since tried to make amends, but Mr. Cohen has said that he will no longer do business with them. There is no law against legally selling guns, and there is no indication or charge that Mr. Cohen was doing anything illegal. We currently have an out-of-control federal government. We have November 2014 and November 2016 to shut it down. If we elect people who will continue in the direction we are going, we deserve what we get.

Enhanced by Zemanta

Crony Capitalism At Work

It is not news that the Obama Administration practices Crony Capitalism, but sometimes it is news to see how far the Administration will go to destroy a business or industry they have decided they do not like.

Breitbart.com posted a story today about the Obama Administration’s war on the private lending industry: third party payment processors (“TPPPs”), payday lenders, and online lenders. The war, referred to in the Administration as ‘Operation Choke Point,’ is designed to destroy these three industries.

The article at Breitbart.com explains:

According to the Wall Street Journal, the federal initiative now known as ‘Operation Choke Point’ is an outgrowth of the President’s Financial Fraud Task Force, established by President Obama by Executive Order in 2009. It also appears to have been kicked off in secret by the Department of Justice, FDIC, and the CFPB in early 2013 without the requisite statutory authority. Officials at the Department of Justice have withheld information about the program from Congress, though they have eagerly shared details with federal financial institution examiners authorized to supervise and discipline the nation’s banks and related financial institutions.

…The members of Congress warned Holder and Gruenberg that these actions were undertaken by their respective agencies without statutory authority. “Your actions to ‘choke off’ short-term lenders by changing the structure of the financial system are outside your congressional mandate,” they wrote. “With the enactment of the Dodd-Frank Act, Congress acknowledged the need for short-term credit products and did not try to limit online lender’s or storefront operators’ ability to offer such products.”

The article goes on to explain some of the efforts by Congress to obtain information on the program and to fulfill their constitutional responsibility of oversight. Generally speaking, they have been blocked at every turn.

The article concludes:

The Obama administration, by treating Congress with disdain and failing to provide evidence of the statutory authority for its actions, is signaling that it has no intention of stopping. Up next for the administration is the expansion of the tactics used in ‘Operation Choke Point’ to a whole host of industries the Obama administration does not like and has identified for targeting, including manufacturers of guns and ammunition.

When will we get our real constitutional government back?

Enhanced by Zemanta