The Trump administration deserves great praise for ending Operation Choke Point, the controversial, and often tyrannical, program that harmed many legitimate businesses.

The Federal Deposit Insurance Corporation set the stage for the discriminatory treatment of businesses when it declared certain industries to be engaged in “high-risk” activities, sending a strong signal to the banks it regulates that they should steer clear of doing business with these entities. Then, in 2013, the Justice Department began implementing Operation Choke Point, essentially threatening banks and payment processing companies that do business with these “high-risk” merchants with federal investigations.

The government’s activities were purportedly intended to go after fraudulent operations such as Ponzi schemes, debt consolidation scams and cable box descramblers, but it also included many perfectly legal businesses like gun and ammunition dealers, coin dealers, tobacco dealers, payday lenders, dating services, fireworks sellers, travel clubs and suppliers of will-writing kits. As a result, many perfectly legitimate businesses were effectively cut off from banking, payroll, credit card processing and other financial services.

As a May 2014 House Committee on Oversight and Government Reform report explained, “Operation Choke Point effectively transformed the FDIC guidance into an implicit threat of investigation. Suddenly, doing business with a ‘high-risk’ merchant is sufficient to trigger a subpoena by the Department of Justice. Banks are put in an unenviable position: discontinue long-standing, profitable relationships with fully licensed and legal businesses, or face a potentially ruinous lawsuit by the Department of Justice.”

Indeed, in a recent meeting with the Editorial Board, California banking representatives expressed great concern over the data collection and other regulatory requirements, including Operation Choke Point, that force them to spend much of their time and money intrusively policing their own customers.

“I don’t know that people know how much is reported,” California Bankers Association President and CEO Simone Lagomarsino told us. “The banks have been put in a position where they’re the police.”

Within days, however, the banking industry got some relief. Congressmen Darrell Issa, R-Vista; Bob Goodlatte, R-Va.; Jeb Hensarling, R-Texas; Blaine Luetkemeyer, R-Mo., and Tom Marino, R-Pa., sent a letter last month to the Justice Department, the Federal Reserve and the comptroller of the currency demanding that the program be dismantled. Remarkably, they received a positive reply.

“We share your view that law-abiding businesses should not be targeted simply for operating in an industry that a particular administration might disfavor,” Assistant Attorney General Stephen Boyd wrote in response to the lawmakers in a letter dated Aug. 16. “All of the Department’s bank investigations conducted as part of Operation Choke Point are now over, the initiative is no longer in effect and it will not be undertaken again.”

The lawmakers were understandably elated by the news, after several years of their pleas falling on deaf ears during the Obama administration.

“We applaud the Trump Justice Department for decisively ending Operation Choke Point,” the five Republicans said in a statement. “This is no way for law enforcement to operate, and runs counter to principles enshrined in our Constitution. By ending Operation Choke Point, the Trump Justice Department has restored the Department’s responsibility to pursue lawbreakers, not legitimate businesses.”

When the government uses its power to capriciously destroy perfectly legal businesses that it dislikes for whatever reason, that is the very embodiment of tyranny. Putting an end to one such outlet is happy news, but, sadly, this is only one of many such dragons that need to be slain.


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