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Last year, we began reporting on the Obama administration’s “Operation Choke Point” and the use of federal financial services regulators to harass and intimidate banks and financial service providers who maintain relationships with legal but so-called “high risk” merchants or businesses. By leaning on the banks, the regulators hope to cause them to sever relationships with these businesses, thereby choking off their cash flow and forcing them out of the market.
These businesses include retailers of firearms and ammunition, a number of which have found their banking relationships abruptly severed with little or no explanation and without reference to anything the individual businesses did or did not do. Earlier this year, a congressional report based on examination of nearly 900 internal DOJ documents found that the operation’s adverse effect on legitimate businesses was not merely an unintended side-effect but the outcome of a deliberate attempt to target entire business sectors that, while legal, were deemed objectionable by regulators.
One of the main federal entities being used to “choke” firearm businesses is the Federal Deposit Insurance Corporation (FDIC). The FDIC was created during the New Deal in 1933 to guarantee the security of bank deposits, and has extensive supervisory and examination authority over banks and the many federal laws that banks must follow.
As we reported last October, a coalition of congressional representatives led by Rep. Blaine Luetkemeyer (R-Mo.) had requested internal investigators at the Department of Justice (DOJ) and the Federal Deposit Insurance Corporation (FDIC) to conduct formal inquiries into Operation Choke Point, as well as any officials and staff involved in the program.
On March 24, 2015, the Committee on Financial Services’ Oversight and Investigations Subcommittee held a hearing entitled “The Federal Deposit Insurance Corporation’s Role in Operation Choke Point” where the sole witness was the Honorable Martin J. Gruenberg, Chairman, Federal Deposit Insurance Corporation.
U.S. Rep. Sean Duffy (R-Wis.), Chairman of the Oversight and Investigations Subcommittee, asked a series of probing questions and referenced multiple supporting FDIC documents revealing that ammunition and firearm sales and dealers had, in fact, been targeted.
“The bottom line is, you’re putting innocent people out of business and all of the people at the FDIC who are implementing this program still work there. They haven’t been fired and they haven’t been reprimanded,” Rep. Duffy said. “These folks have no place in government – and if you allow them to stay – you have no place in government,” Duffy concluded.
Several other members, including Rep. Luetkemeyer, asked questions pertaining to Operation Choke Point as a whole.
Unfortunately, though predictably, Gruenberg’s responses were vague and non-committal, and displayed a disregard for the law-abiding businesses that are being forced out of existence due to their loss of financial support from banking institutions. The FDIC has clearly exerted pressure on financial institutions to cease relationships with what the FDIC deems as “prohibitive businesses.”
This is another clear example of overreach, by another Obama appointee, intended to curtail the Second Amendment.
In order to fight such abuse, Rep. Luetkemeyer has re-introduced NRA-supported H.R. 766–the “Financial Institution Customer Protection Act”. This legislation would institute numerous reforms to bring more transparency and accountability to federal oversight of banks; all aimed at preventing the sort of unchecked abuse of discretion at the heart of Operation Choke Point.
Please contact your U.S. Representative and ask him or her to SUPPORT H.R. 766