By a bipartisan 250-to-169 vote, the House today approved a bill that would end the Justice Department’s Operation Choke Point initiative, which sought to curtail disfavored businesses by working through regulators to pressure financial institutions to end customer relationships with these businesses. The legislation would require regulators to present a material reason for ordering the termination of a customer relationship.
“Banks already keep records and report suspicious activities to law enforcement; however, some recent programs instituted by federal banking agencies make banks responsible for policing customers,” ABA said in a memo to House members this morning. “Banks should not be judge and jury on whether customers are operating legally. Combating financial fraud works best when we work together with our regulatory agencies and law enforcement.”