Rep. Luetkemeyer Calls for Investigation after Unsealed Court Docs Reveal Operation Choke Point May Not Be Dead
Maybe Operation Choke Point isn’t over after all. Rep. Blaine Luetkemeyer [R-Mo.] is calling for an investigation into the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency — two national banking regulators — after unsealed court documents revealed “blatant discrimination and bias” from officials at the agency. More details here.
WHAT IT MEANS, FROM SCOTT WORTMAN OF BLANK ROME: At first blush, Operation Choke Point sounds like a baseless conspiracy theory or some dystopian work of fiction about an omnipotent autocratic government with leanings towards totalitarianism. Unfortunately, Operation Choke Point was neither a baseless conspiracy or a work of fiction. Instead, rather than reducing the significant chokehold (pun intended) on many American businesses already abiding by ambiguous, arbitrary and onerous regulations, Operation Choke Point undermined legitimate businesses through eliminating access to banking systems and payment processors. This was not merely a breach of norms of collegiality and mutual respect that should characterize interactions between regulators and businesses providing the foundation of our economy, it was an affront to the values underlying our Constitution and the guarantee of procedural due process of law.
Consistent with statements from Rep. Luetkemeyer, the unsealed documents from the Advance America et al. v. Federal Deposit Insurance Corp. et al. unequivocally demonstrate the federal government’s coercion of banks to terminate their relationships with “objectionable” businesses, which includes members of the accounts receivable management industry. Indeed, the government’s internal communications show the effectiveness of threats against bank directors, including asking banks whether they were aware that individual directors could be subject to criminal prosecution.
That said, in my opinion, the unsealed documents do not seem to provide evidence of a continuation of Operation Choke Point. Still, since this is Halloween time, should Operation Choke Point rise from the dead, the industry should be ready to act. Likewise, if any bank is still instituting illegal methods learned from Operation Choke Point, I would refer the bank to the August 21, 2017 letter from the Office of the Comptroller of the Currency, specifically rejecting the illegal tactics and goals as a prime example of government overreach.
"Rep. Luetkemeyer Calls for Investigation after Unsealed Court Docs Reveal Operation Choke Point May Not Be Dead," was published in AccountsRecovery.net's ARM Compliance Digest on October 25, 2018.