(This is published on behalf of The LIBRE Initiative Institute)
LIBRE Joins Litigation Regarding “Operation Choke Point”
Obama Administration Abuses Regulatory Regime
(Washington, D.C.) – Today the LIBRE Initiative Institute (LIBRE) filed an amicus brief in support of the Community Financial Services Association of America v. FDIC challenge to the administration’s Operation Choke Point (Choke Point). LIBRE filed the brief – which was written by the nonprofit government oversight group Cause of Action – arguing that the government abused its power and conducted Choke Point without transparency or accountability and without accounting for the collateral damage that it has done to Hispanic businesses, their customers, or the communities they serve. Choke Point is an initiative quietly organized and implemented by the Federal Deposit Insurance Corporation (FDIC), the Department of Justice (DOJ), and other agencies. Banks and other financial institutions have been investigated and pressed to cut off financing to a range of businesses that the administration believes to be acting against public interest. These include legal activities such as payday loans, tobacco, ammunition, fireworks, and many others.
This operation has received little public scrutiny, and was not publicly debated or analyzed for its impact on the targeted businesses, their customers or the broader economy. Questions have been raised regarding the administration’s decision to target a broad range of legal activities – rather than concentrating taxpayer dollars on fighting crime. Additionally, many of the businesses hurt by the operation provide access to capital and services of particular value in the Latino community. This unilateral action has forced many enterprises to close – with a disproportionate impact on jobs and services in Latino communities nationwide. It is wrong for the administration to crack down on completely legal commercial activity – stripping consumers of market choice – through agency pressure applied to financial institutions rather than an open and transparent process.
Jorge Lima, Policy Director of The LIBRE Initiative Institute released the following statement:
"President Obama continues to use unilateral executive action to push forward on a flawed policy agenda that is hurting the Latino community more than it’s helping. Wages are down and jobs are hard to find – but we continue to see the same policy prescriptions that have failed in the past. Now the administration is using its power to undermine industries that it deems detrimental, while ignoring the fact that it is unfairly punishing business owners and infringing upon the private prerogative of banks to evaluate business according to their models – ultimately limiting the choices available to individuals.
The federal government should stop trying to arbitrarily undercut or shut down businesses it doesn’t like, and allow for an open debate, with proper opportunity for comment and analysis, rather than wielding administrative power. We have seen what happens when there is no discussion of proposed policy alternatives with the unintended consequences of Obamacare. The president and his administration shouldn’t be so eager to repeat the same mistakes."