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ICBA Applauds New Legislation on Operation Choke Point

Legislation introduced by Rep. Luetkemeyer would protect industry from overzealous initiative

Washington, D.C. (June 30, 2014)—The Independent Community Bankers of America® (ICBA) today applauded legislation, H.R. 4986, introduced by Rep. Blaine Luetkemeyer (R-Mo.) to rein in Operation Choke Point. The ICBA-advocated legislation is designed to protect private industry from overzealous Justice Department intimidation under Operation Choke Point—an initiative that targets third-party payment processors and their financial institutions, including community banks, that process payments for businesses considered engaged in higher-risk, legal activities.

“Too often Operation Choke Point is unduly pressuring banks to drop long-standing customers due to a political agenda and not the rule of law,” said ICBA President and CEO Camden R. Fine. “Quiet pressure of this sort from an all-powerful government cannot be tolerated in a free society. ICBA thanks Rep. Luetkemeyer for spearheading this important legislation, which would help community banks continue to serve their customers and communities without unnecessary and intimidating intervention, and help focus law enforcement on prosecuting wrongdoers directly.”

Rep. Luetkemeyer’s bill would create a new safe harbor for financial institutions, including community banks. It aims to promote nondiscriminatory access to financial products and services provided the merchant is licensed, registered as a money services business, or has obtained a reasoned legal opinion demonstrating the legality of its business. Notably, the safe harbor does not require a financial institution to do business with any merchant and does not place the burden of determining the legality of business with the financial institution.

The legislation also seeks to rein in the DOJ’s over-aggressive subpoena authority by changing the manner in which it can seek a subpoena under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

Additionally, the legislation promotes cooperation between banks and law enforcement to enable law enforcement to exercise its responsibility to prosecute illegal wrongdoing directly against the perpetrators of that wrongdoing, instead of taking action that results in cutting off bank services to legal businesses.

To see Fine’s most recent commentary on the Operation Choke Point initiative, see his recent Finer Points blog post here. For more information about community banks, visit www.icba.org.

About ICBA
The Independent Community Bankers of America®, the nation’s voice for more than 6,500 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services.