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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.
Operation Choke Point was an initiative under the administration of former President Barack Obama that sought to cut off access to financial services for certain types of companies, including payday lenders and debt collectors, that were thought to be at a higher risk for illegal activities such as fraud and money laundering. The initiative was officially terminated in August 2017, but officials at the FDIC and OCC who were appointed during the Obama administration may have been secretly continuing to carry out the initiative’s mission.
Rep. Luetkemeyer sent letters yesterday to Jelena McWilliams, the chairman of the FDIC, and Joseph Otting, the Comptroller of the Currency, to investigate and take necessary action against anyone who has “abused their power,” Rep. Luetkemeyer said in a release.
“As a former examiner, I find it appalling that senior regulators would not only allow but encourage this type of irresponsible behavior. The intimidation tactics and implicit bias employed by these unelected bureaucrats stands in direct opposition to the important missions of the agencies,” said Rep. Luetkemeyer, chairman of the House Financial Services Committee’s Financial Institutions and Consumer Credit Subcommittee, in a statement. “The abuse of power is truly astounding, but I hope that Chairman McWilliams and Comptroller Otting will do what their predecessors consistently declined to do and restore the integrity of their agencies.”
Documents were unsealed on Friday in the case of Advance America v. Federal Deposit Insurance Corp., in which the plaintiffs were seeking a motion for summary judgment. In the motion, the plaintiffs detail how staffers at the agencies continued to employ the tactics of Operation Choke Point.
Collection agencies nationwide found themselves caught up in Operation Choke Point as banks would close accounts or refuse to open accounts for companies engaging in debt collection. Agencies were forced to scramble to find financial institutions willing to open accounts and allow the agencies to make deposits and withdrawals.
“Simply put, the evidence proves that your predecessor and the senior staff at the OCC and the FDIC, many of whom remain in place today, fostered a culture where political opinion and personal belief trumped the agencies’ mission to protect consumers of and promote safety and soundness in the banking system,” Rep. Luetkemeyer wrote in his letter to Comptroller Otting.
