DOJ Responds to Professional Misconduct Concerns Regarding Operation Choke Point

The Department of Justice denies that its attorneys intentionally used Operation Choke Point to target certain lawful businesses.

The U.S. Department of Justice’s Office of Professional Responsibility (DOJ) claims that its attorneys did not improperly target lawful businesses as part of Operation Choke Point, according to a July 7 letter to U.S. Rep. Blaine Luetkemeyer (R-Mo.). Because of this, DOJ argues that “evidence does not establish that Operation Choke Point compelled banks to terminate business relationships with other lawful businesses.”

Luetkemeyer has introduced legislationsupported by ACA International, to end Operation Choke Point, a program in which the Federal Deposit Insurance Corporation and DOJ reportedly applied pressure to financial institutions in order to cut off financial services to certain licensed, legally operating industries, including debt collection.

On Oct. 16, 2014, Luetkemeyer and 31 other members of Congress wrote a letter to DOJ alleging that the department’s attorneys engaged in professional misconduct by using Operation Choke Point to “compel banks to terminate longstanding lending and depository relationships with a wide variety” of lawful businesses like Internet payday lenders, credit repair services, and debt consolidation and forgiveness programs.

When issuing subpoenas in conjunction with Operation Choke Point, attorneys included regulatory guidance from the FDIC and other federal regulators about “elevated risk” businesses. The list of “elevated risk” businesses included credit repair companies, and debt consolidation and forgiveness programs. Some banks then felt compelled to end relationships with businesses in those industries.

The DOJ letter admits that, in some cases, Operation Choke Point may have caused these legitimate businesses to lose banking relationships. But, according to the letter, the attorneys’ action doesn’t constitute professional misconduct because there was no way for them to know that banks would drop clients as a result of receiving the regulatory guidance.

Because attorneys “did not intend to discourage banks from doing business with specific categories of lawful business,” Operation Choke Point doesn’t compel banks to stop working with specific lawful businesses, according to the letter.

ACA International is conducting an ongoing grassroots effort to end Operation Choke Point. Since May, nearly 2,000 ACA members have emailed 340 members of Congress and 78 percent of the U.S. House of Representatives supporting Rep. Luetkemeyer’s Financial Institution Consumer Protection Act. The bill would dictate that agencies such as the FDIC and the Federal Reserve cannot request or order a financial institution to terminate a banking relationship without material reason.