‘We’re gonna punish our enemies and we’re gonna reward our friends who stand with us on issues that are important to us,’ – Obama, 2010.
Apparently it’s not just enemies Obama and his Alphabet Arsenal are going after. It seems the DOJ has quietly begun enforcing a federal initiative that is pressuring banks to terminate bank accounts of legal, but “morally questionable” businesses.
As part of an Executive Order signed by Obama in 2009, “Operation Choke Point” is a product of the Financial Fraud Task Force. Its original aims were to prevent fraudulent businesses from accessing bank accounts by “choking off” their access to payment systems. However, much like everything else within this administration, it seems to have taken a predictable turn:
When you become a banker, no one issues you a badge, nor are you fitted for a judicial robe. So why is the Justice Department telling bankers to behave like policemen and judges? Justice’s new probe, known as “Operation Choke Point,” is asking banks to identify customers who may be breaking the law or simply doing something government officials don’t like. Banks must then “choke off” those customers’ access to financial services, shutting down their accounts.
Wait, let’s back up a second and look at that again: “The DOJ is asking banks to identify customers who may be … simply doing something the government doesn’t like.” Will Tea Party bank accounts be next? What about the Koch brothers?
Justice launched the effort in early 2013 as a policy initiative of the president’s Financial Fraud Enforcement Task Force, which includes the Federal Deposit Insurance Corp., the Consumer Financial Protection Bureau and other regulatory agencies. Though details are scant—much of the investigation has been conducted in secret—the probe aims to crack down on fraud in the payments system by focusing on banks that service online payday lenders and other services deemed suspicious by the government.
The DOJ is conducting a secret investigation with sketchy details? I wonder where I’ve heard that before.
Justice’s premise is simple: Fraudsters can’t operate without access to banking services, and so the agency is going after the infrastructure that questionable merchants use rather than the merchants themselves. Most of these merchants are legally licensed businesses on a government list of “risky profiles.” These include payday outfits and other short-term lenders.
Unfortunately, the strategy is legally dubious. Justice is pressuring banks to shut down accounts without pressing charges against a merchant or even establishing that the merchant broke the law. It’s clear enough that there’s fraud to shut down the account, Justice asserts, but apparently not clear enough for the highest law-enforcement agency in the land to prosecute.
… Law-enforcement agencies and courts, not banks, are responsible for determining criminal violations. The 1970 Bank Secrecy Act spells out the proper partnership for banks and law-enforcement agencies. The law established record keeping and reporting requirements for banks so that law-enforcement agencies would have the evidence needed to prosecute criminals effectively. That is the division of labor and responsibility envisioned by Congress: drawing upon each other’s strengths to fight crime.
Justice is now blurring these boundaries and punishing the banks that help them fight crime. If a bank doesn’t shut down a questionable account when directed to do so, Justice slaps the institution with a penalty for wrongdoing that may or may not have happened. The government is compelling banks to deny service to unpopular but perfectly legal industries by threatening penalties. This puts them in a difficult business position.
“If a bank doesn’t shut down a questionable account when directed to do so, Justice slaps the institution with a penalty for wrongdoing that may or may not have happened.” Seriously? When did we go from “innocent until proven guilty,” to “guilty because I don’t agree with what you’re doing?” Oh, yeah – January, 2009.
Bank regulators—particularly the FDIC—have joined in the action, warning banks away from serving more than 22 categories of businesses, including “Get Rich Products,” “Ammunition Sales,” “Pharmaceutical Sales,” “Home Based Charities,” and even “As Seen on TV” businesses. Some of these businesses may indeed be risky. But that doesn’t justify pre-emptively declaring them all criminals and freezing their access to the payments system.
The 2011 FDIC Bulletin noting the 22 categories of “questionable businesses” above also lists Pornography among the others as being on the same “high risk activity” level as Ponzi schemes, escort services and Racist materials. No, really. The “Party of Tolerance” and “Free to Be You And Me” considers pornography high risk and “questionable”….
It seems as though one bank is taking that list to heart and has closed a number of accounts owned by the performers in the Adult Entertainment Industry.
JPMorgan Chase shut down the bank accounts of a bunch of adult film industry workers and didn’t tell them why.
“We recently reviewed your account and determined that we will be closing it on May 11, 2014. Please accept our apologies for the inconvenience,” a letter from the bank to porn star Teagan Presley posted on Perez Hilton’s site reads.
“You may close your account before the date we provided. Your account agreement says that either of us may close your account at any time, without notice and without reason,” the letter from Chase continued.
After the Obama Administration weaponized the IRS and began targeting conservatives, is anyone really surprised at this, it’s just the next logical step. My question is this, at what point do we say enough is enough? At what point do the Obama water carriers in the media stand up and say “WTH is going on in this administration?!”
At what point do people begin to realize a country that slowly gives up its rights, will eventually have no rights left.