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The Federal Deposit Insurance Corp. told an Ohio bank early last year that doing business with payday lenders is generally unacceptable, according to a letter released Friday by House Republicans.
October 17 -
The House Oversight Committee has turned its focus from the Justice Department's Operation Choke Point to FTC investigations that target payment processing firms.
October 3 -
A trade group for payment processors is accusing the Federal Deposit Insurance Corp. of improperly pressuring banks to cut ties with merchants in the pornography business.
October 3
WASHINGTON House Republicans are seeking an investigation by an independent watchdog into the Federal Deposit Insurance Corp.'s role in the Justice Department's "Operation Choke Point," which aims to combat illicit businesses by forcing them out of the banking system.
In a letter sent Thursday to the FDIC's office of inspector general, 35 House GOP members said the FDIC has inappropriately assisted the Justice Department in its crackdown, resulting in banks severing relationships with legitimate businesses.
"It has become clear there is a blatant misuse of power that is happening in the FDIC and the Department of Justice, among others," said Rep. Blaine Luetkemeyer, one of the letter's signers, in a press release.
The lawmakers argue that DOJ and FDIC are targeting specific businesses, including payday lenders, pawnbrokers, firearm manufacturers and tobacco retailers, in an effort to deny them banking services. They specifically claim the FDIC has put pressure on banks to cut ties with lines of business instead of targeting individual bad actors.
"There is no doubt in our minds that FDIC and DOJ officials have abused their authority to advance a political and/or moral agenda," the letter says.
The letter, which was signed by members of the House Financial Services Committee, Oversight and Government Reform Committee, and Judiciary Committee among others, request that the FDIC watchdog "launch a comprehensive investigation on Operation Choke Point and the individuals within the FDIC charged with creating and carrying this unprecedented initiative."
