WASHINGTON—The U.S. Department of Justice has indicated it will end Operation Choke Point, the controversial program that discouraged banks from offering financial services to a range of companies it deemed objectionable, or “high-risk” customers.
Critics of the program that was initiated during the Obama administration said it was hurting legitimate businesses—from gun dealers to payday loan services. Adult entertainment companies were also affected.
"The end of this ill-conceived program was long overdue," said veteran adult industry attorney, Larry Walters, of Walters Law Group. "The adult entertainment industry was targeted by Operation Choke Point, and people suffered needlessly. The government should not pressure the financial services industry to deny basic banking services to businesses they don't happen to like. Hopefully, the official termination of this program will make it easier for participants in the adult industry to gain access to the same financial services every other business uses."
Assistant Attorney General Stephen Boyd referred to the program as “a misguided initiative” in a August 16 letter to House Judiciary Chairman Bob Goodlatte (R-Va.), one of the GOP lawmakers who urged the DOJ to halt the program.
Goodlatte and House Financial Services Chairman Jeb Hensarling (R-Texas), along with Reps. Tom Marino (R-Pa.), Blaine Luetkemeyer (R-Mo.) and Darrell Issa (R-Calif.), applauded the Justice Department’s decision in a joint statement:
“The Obama Administration created this ill-advised program to suffocate legitimate businesses to which it was ideologically opposed by intimidating financial institutions into denying banking services to those businesses. … By ending Operation Choke Point, the Trump Justice Department has restored the Department’s responsibility to pursue lawbreakers, not legitimate businesses,” the statement said.
In the DOJ’s letter obtained by Politico, Boyd said, “We share your view that law abiding businesses should not be targeted simply for operating in an industry that a particular administration might disfavor. Enforcement decisions should always be made based on facts and the applicable law.
“We reiterate that the Department will not discourage the provision of financial services to lawful industries, including businesses engaged in short-term lending and firearms-related activities.”
