It was called Operation Choke Point — an Obama-era initiative specifically aimed at politically unpopular, but perfectly legal businesses that liberals didn’t appreciate.
To some commentators, like Forbes contributor Norbert Michel, it was “an egregious affront to the rule of law.” Little surprise, then, that the Biden administration did away with a rule intended to prevent it.
For the unfamiliar, Operation Choke Point was designed as a way to choke off firearms dealers and payday lenders through Federal Deposit Insurance Corporation guidance that amounted to strong-arm tactics.
During his term in office, former President Donald Trump ended the operation, which had begun in 2013. In January, as the Trump administration was on its way out, it issued the “Fair Access Rule,” which was designed to preclude another such round of intimidation. The rule said “banks should conduct risk assessment of individual customers, rather than make broad-based decisions affecting whole categories or classes of customers, when provisioning access to services, capital, and credit.”
In a piece published in The Federalist on Friday, Kelsey Bolar, policy analyst at the Independent Women’s Forum, a conservative group, wrote that “[u]nder Operation Choke Point, federal regulators instructed banks to do the opposite — to openly discriminate against entire industries the Obama administration found objectionable.”
“Weaponizing the power of banking regulators at the Federal Deposit Insurance Corp. and the Office of Comptroller of the Currency, the Obama administration realized it could block entire industries from the banking system that it didn’t like. This made it difficult — if not impossible — for politically unfavored businesses such as gun sellers and short-term lenders to operate,” she wrote.
“Essentially, by using the power of federal banking regulators to intimidate banks from providing their services to these industries, the administration choked off their access to the financial system, leaving them paying more for essential banking services, or unable to use a bank at all.”
Introducing the Fair Access Rule in January, acting Comptroller of the Currency Brian P. Brooks said that it was critical that legal businesses and organizations had access to banking services.
“When a large bank decides to cut off access to charities or even embassies serving dangerous parts of the world or companies conducting legal businesses in the United States that support local jobs and the national economy, they need to show their work and the legitimate business reasons for doing so,” Brooks said in a statement.
“As Comptrollers and staff in previous administrations have made clear in speeches, guidance, and testimony, banks should not terminate services to entire categories of customers without conducting individual risk assessments. It is inconsistent with basic principles of prudent risk management to make decisions based solely on conclusory or categorical assertions of risk without actual analysis. Moreover, elected officials should determine what is legal and illegal in our country.”
While a late-January statement from the Biden administration’s Office of Comptroller of the Currency noted “[t]he OCC’s long-standing supervisory guidance stating that banks should avoid termination of broad categories of customers without assessing individual customer risk remains in effect,” the office still announced it was pausing the Trump administration’s Fair Access Rule.
“Pausing publication of the rule in the Federal Register will allow the next confirmed Comptroller of the Currency to review the final rule and the public comments the OCC received, as part of an orderly transition,” read the Jan. 28 notice.
On one front, this may seem innocuous enough. Payday lenders, once the moral panic of the week during Obama’s second presidential term, aren’t on the administration’s policy radar yet — at least not publicly.
One thing that makes this pause feel a bit more ominous, however, is the Biden administration’s recent focus on gun control.
In announcing his first attack on gun rights last Sunday, on the third anniversary of the Parkland shooting, President Joe Biden talked of “eliminating immunity for gun manufacturers who knowingly put weapons of war on our streets.”
What he meant by that was simple: He wanted victims of gun violence to be able to sue gun manufacturers who legally manufactured the weapons.
Sure, no Democrat could pass legislation that could ban all guns, what with District of Columbia v. Heller having set a precedent that Americans have the right to own firearms. Democrats can, however, pass legislation that would end with any company that makes those firearms being hounded through the legal system even if it followed every law.
If something like Operation Choke Point was instituted again, this time focusing solely on firearms dealers, it could have a chilling effect at the retail level.
Beyond that, Bolar’s Federalist piece noted a wider connection “symbolic of the larger attempt by government actors to choke politically disfavored industries and individuals from the mainstream.”
“While cancel culture has led to a politicized economy, the federal government’s arbitrarily targeting of individuals, groups, and entire companies will increase the politicization of the country, where the only acceptable views are from those in power,” she wrote.
“After being choked from essential services in the economy, conservatives and right-of-center businesses will have no choice but to Build Your Own — if that’s even still tolerated or allowed. Build your own banks, build your own credit card processing companies, build your own web hosting platforms, build your own social media platforms, build your own companies, build your own media, build your own schools, and build your own country — because you’re choked from ‘ours.’”
This is how liberals are going to fight their war on constitutional freedoms — because it clearly won’t be legislatively.
And this doesn’t necessarily have to involve firearms, keep in mind. Parler, which became the boogeyman of the Jan. 6 Capitol incursion despite evidence that most of the social media planning took place on Facebook, found itself deplatformed from web services by Amazon. That’s bad enough, but Parler can recover from that. The same thing wouldn’t necessarily happen if the company were cut out of the banking system, which would remove any way for it to stay afloat.
If this seems farfetched, remember all of the talk connecting Parler directly to the violence on Jan. 6. Once you single out conservative social media platforms as being a haven for violent groups, choking them off from banking services doesn’t seem like such a stretch.
Consider the fact there are plenty of liberals who could read this, hear me talk about effectively strangling Parler by financial means, and say to themselves: “Yeah, and? Actions have consequences.”
We’re dealing here with the potential for a low-rent, China-style social credit score, and the Biden administration is fine with pausing a rule that would prevent it from happening. That should tell you a lot.
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