Banking and Finance Law Daily House votes to kill Operation Choke Point
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Thursday, February 4, 2016

House votes to kill Operation Choke Point

By J. Preston Carter, J.D., LL.M.

The House of Representatives today passed “The Financial Institution Consumer Protection Act of 2015” (H.R. 766), a measure intended to kill the Department of Justice program known as “Operation Choke Point.” Despite opposition by the Obama Administration and a number of consumer advocacy groups (see Banking and Finance Law DailyFeb. 3, 2016), the measure was approved by a vote of 250-169.

A Financial Services Committee press release quotes the bill’s sponsor, Rep. Blaine Luetkemeyer (R-Mo), as saying that passage of the measure is the first step toward ensuring that “federal banking agencies and DOJ can no longer intimidate financial institutions from offering financial services to licensed, legally-operating businesses that have been targeted not because of potential wrongdoing, but because of personal and political motivation.”

Proponents of the Operation Choke Point program contend that it was created to “choke out” companies that posed a high risk of payment fraud, money laundering, or other abuses by denying them access to the banking and payments system. Critics of the program claim that it pressured banks to deny services to legitimate businesses because they were engaged in activities deemed by regulators to be undesirable.

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