September 07, 2017

Crapo Receives DOJ Commitment to End Operation Choke Point

Justice Department to End Program that Targets Objectionable Industries

Banking Committee Chairman Mike Crapo received a commitment from the Department of Justice that it has ended Operation Choke Point, an Obama-era initiative that targeted “high risk” industries and prevented them from fully participating in the economy. In some cases, the program targeted guns and ammunition businesses, effectively operating as an end-run around the Second Amendment. 

“I have heard from several Idaho business owners involved in the pawn broker, guns and ammunition sector who have experienced difficulty obtaining essential banking services as a result of fear and uncertainty on the part of banks due to the DOJ program,” Crapo said. “This commitment to end Operation Choke Point is welcome news, and I intend to follow through to ensure that the entire Department, along with federal financial regulators who participated in the program, receive the message that this fundamentally flawed initiative is over and that the government must cease its unmeritorious prosecutions.”

In 2013, news reports surfaced regarding a Department of Justice-led initiative, known as Operation Choke Point, which targets certain industries' ability to access banking services without first showing that the company is breaking the law. Rather than targeting bad actors for illegal activity, this effort has been causing banks to deny or terminate credit lines to legitimate, law-abiding businesses due to fear of DOJ subpoenas or unjustified regulatory action by federal banking regulators. 

In July, Senator Crapo and fellow Banking Committee and Judiciary Committee member Thom Tillis (R-North Carolina) sent a letter to the Department of Justice requesting a review of all options available to ensure lawful businesses are able to continue to operate without fear of significant financial consequences, and asked for a statement ensuring that Operation Choke Point would no longer be in effect. They recently received a response from the Department committing to end the program. In the letter, the DOJ committed that the Department “will not discourage the provision of financial services to lawful industries, including businesses engaged in short-term lending and firearms-related activity.” 

Crapo has previously offered amendments to end the program, and to prohibit the federal banking and credit union regulators from implementing or participating in the DOJ’s Operation Choke Point. The end of the program will not impact anti-fraud laws. All requirements of the Bank Secrecy Act and other anti-fraud statues will continue in force and effect just as they did before the initiation of Operation Choke Point.

 

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