House Passes Bill to End Operation Choke Point, White House Will Likely Veto
Feb. 8, 2016
Operation Choke Point, an Obama administration effort opponents have characterized as a way to undermine industries it feels are harmful to consumers by pressuring banks and payment providers, is under attack itself after a bill seeking its end passed in the U.S. House of Representatives on Thursday. Operation Choke Point, which began in 2013, leveraged the government’s regulatory power over merchant banks, acquirers and payment processors, forcing them to drop clients engaged in industries like payday lending, firearms and other “high-risk” sectors—especially online—like gambling and adult entertainment. Many Republicans felt the effort was an abuse of executive power and provided a way for the president to end industries he didn’t particularly like, but still were legal.
H.R. 766 , “The Financial Institution Customer Protection Act” sponsored by Rep. Blaine Luetkemeyer (R-Mo.), was passed by a 250-169 vote with all House Republicans and 10 Democrats voting in favor. Luetkemeyer said the legislation would prevent federal regulatory agencies with financial oversight including the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, among others, from suggesting or even ordering a financial institution to terminate a banking relationship without a “material reason.”
“Together,” Luetkemeyer said in a statement, “the first step has been taken to ensure 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.”
The White House responded with its own statement suggesting such a law would be “overly burdensome” to law enforcement efforts and that if it made it to his desk, President Obama’s “senior advisors would recommend that he veto the bill.”