The Justice Department is ending a controversial Obama-era program that discouraged banks from offering credit to certain businesses, including gun dealers.
In a letter dated Aug. 16, Assistant Attorney General Stephen Boyd called ‘Operation Choke Point’ a “misguided initiative” and said it’s no longer in effect.
The program, launched under former Attorney General Eric Holder, attempted to cut off credit to “high risk” customers, including short-term lenders and firearms dealers. Critics said it hurt legitimate businesses.
“We share your view that law abiding businesses should not be targeted simply for operating in an industry that a particular administration might disfavor,” Boyd wrote in his letter. “Enforcement decisions should always be made based on the facts and the applicable law.”
The letter was a response to five Republican lawmakers who wrote to Attorney General Jeff Sessions and others asking that the program be rescinded.
“Operation Choke Point was an Obama Administration initiative that destroyed legitimate businesses to which that Administration was ideologically opposed (e.g., firearms dealers) by intimidating financial institutions into denying banking services to those businesses,” said House Judiciary Committee Chairman Bob Goodlatte and the other GOP lawmakers in the letter.
They said they convened a roundtable discussion in June with people affected by the program. One veteran and former law enforcement professional “described how the bank came to him and said that, the government ‘came in like a bunch of thugs’ and pressured them to stop serving his small firearms business.”
The man’s business ended up failing, according to the lawmakers. “He concluded, on the verge of tears, by stating that there was ‘no fix’ for what happened to him.”
Still, Karl Frisch, a Democratic strategist, and the executive director at Wall Street watchdog group Allied Progress slammed the decision, saying it’s “a massive giveaway to predatory payday lenders and other shady financial scam-artists.
“Operation Choke Point has been incredibly effective at cracking down on the flow of money to fraudulent merchants that violate the law and target vulnerable consumers,” Frisch said.