The Justice Department has decided to end former President Barack Obama’s Department of Justice (DOJ) and the Federal Deposit Insurance Corporation’s (FDIC) controversial Operation Choke Point, which wanted to put an end credit to shady businesses.
Republicans fought against it because they claimed that the administration used the program to target legitimate businesses, including gun dealers.
Fox News reported:
Just days after top House Republicans had pressed Attorney General Jeff Sessions to shutter Operation Choke Point, the department confirmed in a response letter that the program is dead.
“All of the Department’s bank investigations conducted as part of Operation Chokepoint are now over, the initiative is no longer in effect, and it will not be undertaken again,” Assistant Attorney General Stephen Boyd said in the Aug. 16-dated letter, calling it a “misguided initiative” from the prior administration.
House Judiciary Committee Chairman Bob Goodlatte, R-Va., and the other GOP lawmakers had written to the DOJ last week asking the administration to formally “repudiate” the program’s guidelines.
The operation came under fire almost as soon as it began a few years ago. Reason points out that the operation never received “proper statutory authority by either the administration or Congress.” A Wall Street Journal article in 2013 confirmed that the administration “deliberately withheld” details of the operation from Congress.
By labeling certain industries as being at a high risk for fraud, the feds were able to increase oversight requirements for some accounts to such a high level that it became unprofitable for banks to work with certain clients, explained Iain Murray, the Competitive Enterprise Institute’s vice president of strategy, in a 2014 post at National Review Online.
As Murray pointed out, the Obama administration’s own guidance document for the program included a list of industries targeted with greater scrutiny, including payday loans, credit repair services, fireworks, firearms, ammunition, “As Seen on TV” products, gambling, home-based charities, pornography, online pharmaceuticals, and sweepstakes. Targets of Operation Choke Point—such as porn star Teagan Presley, who was profiled by Vice News in 2014—often didn’t have any idea why their bank accounts were being frozen or closed.
“The very premise is clearly chilling—the DOJ is coercing private businesses in an attempt to centrally engineer the American marketplace based on it’s own politically biased moral judgment,” wrote Reason’s Elizabeth Nolan Brown in 2014.
Republicans on the Financial Services Committee discovered a list that the FDIC compiled “of ‘high-risk’ industries that produce ‘questionable or fraudulent goods and services.'” The committee members noticed that the list included those types of businesses, but “industries such as ‘firearms sales’ and ‘ammunition sales'” also made the list.DONATE
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