House Republicans are blasting a Department of Justice program they say is crippling legitimate businesses whose products and services are politically deemed unacceptable by the Obama administration.
Operation Choke Point, launched last year as an anti-fraud action by DOJ in cooperation with several other federal agencies, is designed to "sensitize" banks to the risks of providing services to "undesirable" businesses, including ammunition dealers, porn producers, check-cashing firms, payday loan firms, telemarketers, online firearms and fireworks dealers, and others, according to The Hill.
However, Republicans say the DOJ is using Operation Choke Point to strong-arm banks into denying services to certain businesses and, in effect, putting them out of business.
Rep. Blaine Luetkemeyer, D-Mo., has offered up the End Operation Choke Point Act to block the DOJ from running the program.
"Indefensible and irresponsible," Luetkemeyer said. "If you don't like a given industry, bend your authorities and force that industry out of the financial services space, making it impossible for them to survive."
"It seems like this was political from day one," Rep. Stephen Fincher, R-Tenn., told The Wall Street Journal.
Rep. Patrick McHenry, R-N.C., accused the DOJ of running a "government hit list" of businesses based on a footnote to an FDIC regulatory guidance
to banks, which spells out what sorts of businesses are riskiest.
Rep. Darrell Issa, R-Calif., issued a report in May concluding that the DOJ has unfairly focused the operation on payday lenders, the Huffington Post
Three congressional hearings are concerned with Operation Choke Point, and William M. Isaac, former head of the FDIC, has termed the operation "Orwellian" and "frightening."
Commenting on The Hill, Isaac said, "Operation Choke Point is one of the most dangerous programs I have experienced in my 45 years of service as a bank regulator, bank attorney and consultant, and bank board member. Operating without legal authority and guided by a political agenda, unelected officials at the DOJ are discouraging banks from providing basic banking services — deposit accounts, payments processing services, and payroll accounts — to lawful businesses simply because they don’t like them. Bankers are being cowed into submission by an oppressive regulatory regime."
The DOJ has denied politically motivated pressuring of banks, but so far has served more than 50 subpoenas on banks, and Rep. Spencer Bachus, R-Ala., said, "Subpoenas are expensive to comply with and can bring unwanted scrutiny. The natural reaction from a financial institution might be to sever relations with the merchant and be done with it."
© 2016 Newsmax. All rights reserved.