Although the Justice Department has ended its controversial “Operation Choke Point” initiative, the House tonight overwhelmingly passed a bill that would prevent it from being resurrected. The House voted 395 to 2 to pass the ABA-backed H.R. 2706, which would prevent federal banking agencies from requesting or ordering a bank or credit union to terminate a customer account without a material reason. Under the bill, that reason could not be based solely on reputation risk.
Certain FDIC staff advanced Justice Department efforts to pressure banks to end relationships with companies that were out of favor politically but otherwise legal, including payday lenders — activities criticized by the FDIC’s inspector general. The Justice Department formally ended Choke Point in 2017 after President Trump took office.
