President Obama has threatened to veto legislation that would end the Department of Justice’s controversial Operation Choke Point, a program designed to pressure banks to end relationships with payday lenders and other types of “high-risk” money services businesses, including online gambling sites.
The bill (HR 766), sponsored by U.S. Rep. Blaine Luetkemeyer (R-Mo.), passed the U.S. House of Representatives on Feb. 4 with overwhelming GOP support and only 10 Democratic votes, according to Congress.gov, an online bill tracker. The bill has gone to the Senate. Luetkemeyer said his bill would prevent the federal government from intimidating financial institutions from offering services to legal businesses.
The goal of Operation Choke Point, launched in late 2012 by the DOJ’s Civil Division, was to protect consumers from fraud perpetrated by fraudulent merchants, financial institutions and third-party payment processors.
Last year year, a federal judge dismissed nine of 12 counts in an Operation Choke Point-related action brought by Community Financial Services, a trade organization that represents payday lenders.
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