WASHINGTON—The Justice Department has announced an end to the Operation Choke Point initiative, which was launched under President Barack Obama to fight consumer fraud by denying fraudulent businesses access to banking services.
NAFCU noted that it had raised concerns that the program could deter the development of e-commerce and stifle economic growth. The initiative also held financial institutions and third-party processors accountable if they continued to serve a client operating in a fraudulent manner.
Assistant Attorney General Stephen Boyd sent a letter earlier this month to House Judiciary Committee Chairman Bob Goodlatte (R-VA) who has repeatedly called for the program's end, which called the initiative "misguided" and stated that it is "no longer in effect," NAFCU noted.
Earlier this year, NAFCU backed a bill introduced by House Financial Services Subcommittee on Financial Institutions and Consumer Credit Chairman Blaine Luetkemeyer (R-MO) that essentially blocked the initiative. Under Luetkemeyer’s bill, federal regulators would have been required to give material reason for ordering financial institutions to terminate account relationships.
CUNA applauded the DOJ’s decision.
“The end of Operation Choke Point removes a potential barrier for credit unions and other financial institutions to ensure consumers have access to safe and affordable financial services,” said CUNA President/CEO Jim Nussle. “Operation Choke Point and its broad enforcement tactics created unnecessary risks for consumers and the economy by limiting access to these services. Credit unions will continue to serve their members while strictly following all laws and regulations.”