April 27, 2015

Ending Operation Choke Point

Guest column submitted by U.S. Senator Mike Crapo

Last summer, news reports surfaced regarding a U.S. Department of Justice-led (DOJ) initiative that targets certain industries' ability to access banking services without first showing the companies are not breaking the law.  Rather than targeting bad actors for illegal activity, this effort, known as Operation Choke Point, is causing banks to deny or terminate credit lines due to fear of DOJ subpoenas or unjustified regulatory action by federal banking regulators.  Legitimate industries-legal, but not acceptable, apparently, to the Administration-are now experiencing difficulty finding essential banking services.  This commerce-stifling, unjust federal overreach must stop.

Small businesses, banks and payments processors have all been targets of this expansive regulatory approach.  The U.S. Chamber of Commerce has stated that enforcement agencies have the tools to root out fraud and predation directly, and the Chamber supports their efforts to do so.  But under Operation Choke Point, government authorities punish entire categories of lawful businesses by instilling fear in the institutions that bank with them.  This has left banks with little choice but to terminate longstanding relationships with customers, because of inappropriate explicit or implicit pressure.

Now, who are these disfavored industries?  One of them is the firearms and ammunition industries in the United States.  I have heard from several Idaho business owners involved in the guns and ammunition business who experienced difficulty finding essential banking services as a result of this fear and uncertainty on the part of the banks. 

At the urging of many members of Congress, the Federal Deposit Insurance Corporation (FDIC) updated its regulatory guidance and retracted the target list.  The withdrawal of the list of targeted businesses was a good first step, but we must eliminate this inappropriate DOJ program. 

That is why I offered an amendment to address this concern during the Senate Budget Committee's markup of the Senate's version of the budget blueprint for Fiscal Year 2016.  The provision would begin the process of ending the Department of Justice's Operation Choke Point while protecting Second Amendment rights.  The committee approved this amendment by a vote of 13-9, and itwas contained in the balanced budget resolution passed by the U.S. Senate in March.    

President Ronald Reagan words from 26 years ago remain ageless counsel:  "I hope we once again have reminded people that man is not free unless government is limited.  There's a clear cause and effect here that is as neat and predictable as a law of physics:  as government expands, liberty contracts."  Americans must guard against and stop the increasingly creative and complex efforts to expand the federal government's reach into our lives while stifling our constitutional rights.  I will continue to work to stop this overly-aggressive enforcement effort that jeopardizes Second Amendment rights.    

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