A group of Republican lawmakers wrote to the heads of the Department of Justice, Federal Reserve and OCC today asking them to clarify their position on the DOJ’s Operation Choke Point, an Obama-era policy that seeks to curtail disfavored businesses by working through regulators to pressure banks to end customer relationships.
While the FDIC has encouraged banks to evaluate business relationships on an individual basis rather than simply severing ties with all businesses in industries deemed to be high-risk, there has still been a lack of action among the agencies to formally rescind existing Choke Point guidance, the lawmakers noted. They added that despite these steps by the FDIC, many banks remain are still reluctant to begin serving industries previously targeted by Operation Choke Point.
The lawmakers called on DOJ and the agencies to give banks explicit assurance that they are free to serve the industries in question and restore longstanding relationships with customers that were curtailed as a result of the policy. “As highly regulated and risk-averse entities, banks may be hesitant to resume providing services to legitimate businesses unfairly targeted by Operation Choke Point absent explicit directives countermanding the Obama Administration’s previous guidance,” they wrote.