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CUNA backs bill limiting DOJ’s Operation Choke Point

Thu, Jun 8, 2017

CUNA wrote this week to support a bill placing limits on Operation Choke Point, an initiative CUNA believes uses broad enforcement tactics that could create unnecessary risks to consumers and the economy. The Financial Institution Consumer Protection Act of 2017 (H.R. 2706) was introduced by Rep. Blaine Luetkemeyer (R-Mo.).

Operation Choke Point is a Department of Justice initiative that allows investigations of financial institutions and payment-processing companies to determine if they have enabled fraudulent activity by serving certain customers or members.

“Credit unions are committed to maintaining the ability to serve their members while strictly following all laws and governing regulations,” wrote CUNA President/CEO Jim Nussle. “H.R. 2706 is a reasonable approach to preventing fraud and maintaining financial integrity without overreaching.

Specifically, H.R. 2706 would:

  • Limit federal banking regulators’ ability to discourage or restrict depository institutions from entering into or maintaining a financial services relationship with specific customers unless certain criteria are met; and
  • Limit regulators’ ability to pressure financial institutions to terminate customer accounts, requiring regulators to have a material reason for termination that is not based solely on the reputational risk posed by the customer before pressuring the financial institution to close the account.

The bill passed the House in the last Congress by a 250-169 vote. CUNA also backed a Senate version of the bill in the last Congress.