2 hearings next week on Operation Choke Point

McHenry - Bachus
(Left) House Financial Services Subcommittee on Oversight and Investigations Chairman Patrick McHenry, R-N.C.; and House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law Chairman Spencer Bachus, R-Ala.

July 11, 2014 – The Justice Department’s Operation Choke Point initiative will be examined next week during two House subcommittee hearings, one of them focusing on the legality of the program.

The House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law, chaired by Rep. Spencer Bachus, R-Ala., will hold a hearing July 17 on the legal authority of the initiative. The House Financial Services Subcommittee on Oversight and Investigations, chaired by Rep. Patrick McHenry, R-N.C., will hold its hearing July 15.

The Justice Department’s Operation Choke Point initiative investigates whether credit unions and banks allow third-party payment processors, working on behalf of payday lenders, to illegally access consumer checking accounts.

A report from the House Oversight and Government Reform Committee last month says the Justice Department’s Operation Choke Point program pressured banks to cut off legal businesses the Obama administration considered “high risk.” The committee, chaired by Rep. Darrell Issa, R-Calif., also alleged that the department did not have “adequate legal authority” for the program.

Rep. Blaine Luetkemeyer, R-Mo., introduced H.R. 4986, a bill to curb the Justice Department’s ability to continue the program. In April, NAFCU joined with other financial services trades in a statement to the House Financial Services Committee warning that this program “could seriously deter the natural growth and development of e-commerce and stifle future economic growth.”

On Tuesday, NAFCU witness David Clendaniel, president and CEO of Dover Federal Credit Union in Dover, Del., will discuss the impact of overregulation on his institution in a hearing of the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, where Operation Choke Point will also be discussed. NAFCU continues to monitor this issue and the effects on credit unions.

 

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