Recently released documents from a lawsuit involving the Obama administration’s “Operation Choke Point” are casting more light on federal financial regulators’ unlawful shakedown of disfavored businesses and their financial institutions.
The documents also show how tempting and easy it could be for state bureaucrats to launch similar operations, so long as their legislatures empower them with broad regulatory authority.
Now, just such a scheme is coming to light in New York, where the National Rifle Association has sued Democratic Gov. Andrew Cuomo and the state Department of Financial Services for allegedly threatening banks and insurers into severing business ties with the association.
While the Justice Department deserves credit for denouncing Operation Choke Point in August 2017, it will be interesting to see how the Operation Choke Point and NRA lawsuits proceed and whether the courts will rein in the various regulators’ abuses of power.
During Operation Choke Point, Obama administration officials targeted disfavored businesses, including firearms dealers and short-term money lenders, by disparaging them and intimidating banks with whom they did business.
In a memo, the Federal Deposit Insurance Corporation, an independent agency tasked with maintaining “public confidence in the nation’s financial system,” listed those lawful businesses as “‘elevated-risk’ merchants.” And in 2013, Justice Department officials mailed that list to financial institutions, along with administrative subpoenas, to “warn” them of those “high-risk merchants/activities.”
In 2014, an industry coalition of payday lenders sued the Federal Deposit Insurance Corporation, claiming that it violated their due-process rights through intimidating their business partners, even threatening “some banking officials with criminal prosecution if they persisted in banking payday lenders. And when the banks inevitably yielded to this unbearable pressure,” the lenders argued, “the [Federal Deposit Insurance Corporation] then immediately demanded that the decision be portrayed as a voluntary action to whitewash the agency’s backroom pressure tactics.”
In August …read more
From:: Daily Signal – Feed