June 26, 2014

Luetkemeyer files anti-'Choke Point' bill

June 27, 2014 – Rep. Blaine Luetkemeyer, R-Mo., introduced a bill, H.R. 4986, to curb the Justice Department's ability to continue its "Operation Choke Point" program, which NAFCU has raised concerns about.

Luetkemeyer said the Justice Department and federal banking regulators "are placing so much regulatory pressure on financial institutions that certain businesses not viewed favorably by the Attorney General and the Administration are eventually choked-off from the financial services they need to survive."

Operation Choke Point refers to the Justice Department's initiative to investigate whether credit unions and banks allow third-party payment processors, working on behalf of payday lenders, to illegally access consumer checking accounts. Luetkemeyer's bill would create a "safe harbor" for eligible financial institutions, including credit unions, to "promote nondiscriminatory access to financial products and services."

A report from the House Oversight and Government Reform Committee last month says the Justice Department's "Operation Choke Point" program acted to pressure 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.

In April, NAFCU joined with other financial services trades in issuing a joint statement on "Operation Choke Point" that was submitted to the House Financial Services Committee. The trades noted concerns that this program "could seriously deter the natural growth and development of e-commerce and stifle future economic growth."

NAFCU continues to monitor this issue and the effects on credit unions.