WASHINGTON (2/3/16)--Tactics used to enforce the U.S. Department of Justice’s (DOJ) Operation Choke Point can create unnecessary risks to consumers and the economy, Credit Union National Association (CUNA) President/CEO Jim Nussle told all 435 representatives in a letter sent Tuesday.
Nussle wrote to the members of Congress in advance of House consideration of the Financial Institution Consumer Protection Act (H.R. 766).
Operation Choke Point allows investigations into whether financial institutions and payment-processing companies have enabled fraudulent activity. CUNA has joined critics of the plan, saying while it supports the government’s role in eliminating fraud, Operation Choke Point has caused consumers to be separated from the mainstream financial services marketplace.
“Credit unions are committed to maintaining the ability to serve their members while strictly following all laws and governing regulations,” Nussle wrote. “H.R. 766 is a reasonable approach to preventing fraud and maintaining financial integrity without overreaching.
“The legislation would limit Federal banking regulators’ ability to discourage or restrict depository institutions from entering into or maintaining a financial services relationship with specific customers unless certain criteria are met,” Nussle added. “The legislation would also limit regulators’ ability to pressure financial institutions to terminate customer accounts, requiring regulators to have a material reason for termination that is not based solely on the reputational risk posed by the customer before pressuring the financial institution to close the account.”
The House is expected to vote on H.R. 766 this week.