'Choke Point' choking out legitimate businesses, says Heritage

Friday, March 27, 2015
 | 
Chris Woodward (OneNewsNow.com)

Concerns continue to be raised over a government program known as Operation Choke Point. 

Started by the U.S. Justice Department, the idea is ostensibly to weed out consumer fraud by blocking high-risk industries from banking services.

The Federal Deposit Insurance Corporation (FDIC), which is where the idea originated, works closely on Choke Point with the Justice Department.

handgun with clip and ammoIt may sound like a good idea - cracking down on shady business - but Operation Choke Point has its critics.

Many critics claim Choke Point has targeted "legal and legitimate" businesses as well, says Kelsey Harkness of The Heritage Foundation's Daily Signal news organization.

Those businesses include licensed gun dealers, ammunition manufacturers, and payday lenders among others. 

"People in these industries have been squeezed out from some of the most basic of financial services that a business needs to survive," reports Harkness. 

Many of those small business owners are U.S. military veterans, such as a Louisiana husband and wife who had difficulty finding a willing payment processor for their new firearms business. 

In a March 19 story about that family, Harkness explained that the FDIC created guidelines in 2011 that labeled firearms and ammunition sellers “high risk” industries, "pinning them right alongside pornography and other blatantly illegal enterprises like Ponzi schemes and racist materials."

The Justice Department, she wrote, used the FDIC's "high risk" list for Choke Point. 

Some U.S. House and Senate members have been pushing to end Operation Choke Point.

A House subcommittee held a hearing this week, on Tuesday, in which FDIC chairman Martin Gruenberg testified.

Congressman Sean Duffy (R-WI) suggested Gruenberg step down after Duffy felt his questions about employee bias and the FDIC overstepping its authority were not answered.

Harkness says there are also emails [PDF] showing some FDIC bank examiners showed a personal vendetta or political problem with certain industries, such as payday lenders.

"That's not supposed to be the role of an FDIC bank examiner," Harness complains.

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