WASHINGTON–The House yesterday voted 250-169 in favor of HR 766, the “Financial Institution Customer Protection Act of 2015,” which seeks to put limits on the Justice Department’s Operation Choke Point. The legislation has the backing of both NAFCU and CUNA.
“H.R. 766 would place certain limits on the Federal government’s Operation Choke Point. While we strongly support the government’s role in ensuring the integrity of financial markets and eliminating fraud, the program’s broad enforcement tactics could create unnecessary risks to consumers and to the economy,” wrote CUNA president Jim Nussle.
“The legislation 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,” Nussle continued. “The legislation would also 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.”
NAFCU Vice President of Legislative Affairs Brad Thaler said that the bipartisan legislation, introduced by Representatives Blaine Luetkemeyer and Alcee Hastings, would ensure that federal banking regulators are not participating in Operation Choke Point.
"It would ensure that they do not formally or informally request or order a depository institution to terminate customer or member accounts or restrict or discourage depository institutions from entering into relationships with particular customers or members without a material reason that is not based solely on reputation risk," Thaler wrote. "The legislation is critical to ensure the federal banking regulators do not create an environment that produces a chilling effect on access to financial services to consumers engaging in lawful behavior. "