CFPB Takes Operation Choke Point Mantleposted August 11, 2016
Thursday, August 11, 2016 – Washington, D.C. – US Consumer Coalition (USCC) President Brian J. Wise issued the following statement today in response to a Consumer Financial Protection Bureau (CFPB) lawsuit against Intercept, a Fargo, N.D. payment processor that processed transactions on behalf of payday lenders. In this lawsuit, as highlighted in American Banker, “the CFPB asserted that a payment processor is a ‘covered person’ under the Consumer Financial Protection Act.”
“For three years, the US Consumer Coalition has led the fight against Operation Choke Point. USCC uncovered the secretive program, then spearheaded by the Justice Department and FDIC, that pressured banks and payment processors to shut down accounts of lawful businesses in specific industries.
“When CFPB began to target payment processors last year, USCC called them out for their Choke Point-like effort.
“Ultimately, the CFPB answers to no one. Its lack of congressional oversight, unique funding, and leadership structure make the CFPB powerful and unaccountable. The Administration and activist groups know CFPB makes the perfect agency carry on the objective of Operation Choke Point.”
In February 2015, USCC highlighted the story of a North Carolina tobacco products distributor that had numerous bank accounts closed by Bank of America. The distributor’s payment processor, EFT Network, also shut down his account. The president of the payment processor admitted in an audio recording he was pressured by regulators, specifically CFPB.
In April 2015, USCC declared CFPB effectively took over the Justice Department’s Operation Choke Point after the agency filed a lawsuit that went after debt collectors and an international payment processor.
The US Consumer Coalition (USCC) is a consumer advocacy organization that promotes expanded consumer choice, responsible regulation of consumer-facing industries, fair market conditions, and consumer freedom.