WASHINGTON—In a letter to House Financial Services Chairman Jeb Hensarling, NCUA Chairman Debbie Matz emphasized that NCUA has not participated in Operation Choke Point or any similar operation, nor will the agency in the future.
The April 15 letter also emphasized that NCUA does not dictate to credit unions which businesses they serve, as long as the businesses are legal and within the credit union's field of membership.
Republican members of the House Financial Services Committee earlier this month sent a letter to NCUA, the OCC, the Federal Reserve and the CFPB requesting that each publicly disavow their “past, present and future” involvement in Operation Choke Point, or any similar operations.
Operation Choke Point in an initiative launched by the Department of Justice in 2013 that sought to investigate financial institutions thought to be at higher risk of fraud and money laundering that also involved payment processors, payment processors and others. Critics, however, led by Republicans, have said the program isn’t about money laundering and is instead about attacking industries opposed by the Obama Administration, such as gun sellers and coal producers.
The committee Republicans said they were also requesting that the agencies take internal actions to ensure “deposit account terminations are based on sound reasoning and potential risk, not political motive.”
Matz’ letter to Hensarling outlined that NCUA last December issued supervisory guidance on anti-money laundering, and that in the document the agency expressed that money service businesses (MSBs) provide “necessary and valued financial services to their communities.”
At the close of March, NCUA liquidated the $3-million North Dade Community Development Federal Credit Union in Miami Gardens, Fla. The tiny CU got heavily involved with MSBs, and its problems were a focus of a CUToday.info investigative series.
North Dade was fined $300,000 last year by the Financial Crimes Enforcement Network for significant Bank Secrecy Act violations. That $300,000 fine represented almost half of the CU’s net worth. The tiny CU did more than $1 billion in outgoing wires in 2013.
NCUA stated that it made the decision to liquidate North Dade and discontinue operations after determining the credit union had violated various provisions of its charter, bylaws and federal regulations.