Operation Choke Point was real, and it exceeded legal limits. Overwhelming evidence, in the form of more than 900 pages of newly unsealed emails and depositions, proves government officials illegally targeted lawful businesses in an ideological crusade based on personal disdain. If there were
The small-dollar lending industry has long known that government bureaucrats with a partisan agenda were determined to bring the industry to its knees, but this illegal campaign went farther than anyone could have imagined — with those at the very highest levels of the Department of Justice, FDIC and Office of the Comptroller of the Currency targeting customers of regulated banks based on their personal bias.
The emails and depositions newly unsealed in a lawsuit against the government show that through Operation Choke Point, senior federal officials — most notably at the FDIC — fostered a culture of open criticism and disdain for the small-dollar lending industry. At the same time, they publicly denied any knowledge or involvement of the program. In 2015, former FDIC Chairman Martin Gruenberg
Those involved in Operation Choke Point demonstrated a blatant disregard for the rule of law and due process, as well as the U.S. regulatory system, and the effect of their actions will resonate for years to come. All Americans should demand answers and corrective action, including the immediate removal of all those involved from their current positions — including both Gruenberg and Lowe, who still serve in FDIC leadership.
Now, in new attempts to downplay the true nature of Operation Choke Point,
A dangerous precedent has been set here. If government regulators under one administration can target businesses they personally disfavor, any subsequent administration can do the same. Personal prejudices cannot be the standard for regulation, and the government should never disregard due process or regulatory procedures to choke off lawful businesses. Fortunately, the Community Financial Services Association, which I run, could afford the cost of a lawsuit and seek redress in the courts. CFSA was an original party to the lawsuit brought against the government and we participated in the preparation leading up to its filing in 2014. Our reasons for pursing a legal challenge to the actions of the FDIC and OCC were simple. First, we were seeking justice for our members who were harmed. Second, we were convinced there was a deliberate pattern of terminations of banking relationships that we wanted to bring to light. Third, if there was indeed a pattern, we’d be rendering a genuine public service by establishing the principle that no agency or group of people within an agency should be allowed to abuse their authority by exercising it in an unlawful or prejudicial manner. The last reason is essential because if it were true that bank regulators, who hold immense power over banks and their customers, could exercise personal preferences through regulation, there would be no end to the ideological games that could be played.
We don’t yet know how many more victims of this scheme exist, nor do we know how many are still being injured by regulators who are assuming a power they have no right to use. The ordinary citizen or lawful business shouldn’t have to bear the burden of paying to redress the illegal acts of regulators. Now that the recently unsealed court documents reveal the true lengths of this secretive campaign, no amount of rationalization can excuse it. The proof is in their own words — they intended to end banking relationships and then tried to cover it up. Democrats and Republicans alike must come together to hold those who arranged such a scheme responsible so such an abuse of power can never happen again.