Operation Choke Point
Missouri Member of Congress Blaine Luetkemeyer has contacted the Chairman of the Federal Deposit Insurance Corporation as well as the FDIC Inspector General concerning Operation Choke Point.
Operation Choke Point is a formerly covert Department of Justice initiative to coerce banks to deny banking services to numerous categories of business based on a perception that those types of businesses could present a higher risk of fraud and money laundering. In the financial-services sector those merchant categories include money-transfer networks, pawn shops, and payday lenders.
Luetkemeyer's letters sent earlier this month were in response to a report of FDIC staff accessing emails and documents from the OIG, a report confirmed on June 13 by the FDIC. Congressman Luetkemeyer stated that the breach raised "serious concerns for the independent nature in which the OIG investigation into Operation Choke Point was conducted." He further called Operation Choke Point "an unparalleled abuse of authority"
He further stated "anything that calls into question the ability of an inspector general to conduct independent investigations would only add to the environment of mistrust that has been fostered" by Operation Choke Point.
While ferreting out fraud and money laundering in the financial system is an admirable goal, most business in these categories are legitimate and provide valuable consumer financial services. The problem with Operation Choke Point is that it paints all the businesses in these categories with the same broad brush.
This adversely affects vulnerable consumers. Money transfer services are the only way for many consumers without bank accounts to make safe and reliable C2C or C2B payments. Explain Operation Choke Point to a serviceman who finds that the payday lender that has set up shop near his base is suddenly closed because its source of cash has been chocked off leaving him no way to buy a bus ticket home to see his girlfriend and family. Explain it to the senior citizen who can't find a pawn broker to purchase her old, now-meaningless jewelry, so she can raise some cash. Many of these companies are small, entrepreneurial businesses. We should be encouraging the creation of small, neighborhood businesses like these, not discriminating against them.
To read Luetkemeyer's letters, visit www.efta.org.