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Operation Choke Point: Obama Administration Accused of Last-Ditch Effort by Payday Loans Providers

Payday loans providers blame the Obama administration for attempting to utilize Operation Choke Point to shut down their industry. This has caused a situation of urgency where businesses are not being able to perform their basic functions, such as paying their employees and have also lost numerous banking relationships. A group of short-term lenders requested for emergency relief from a federal judge in the District of Columbia from the government program. CEO of Community Financial Services Association of America (CFSA), Dennis Shaul, said that immediate relief is more pressing than ever. CFSA represents about 9,000 brick-and-mortar short-term lenders. Dennis firmly believes that without an injunction against Operation Choke Point, some members of the CFSA will be compelled to slim down or completely shut down their operations. In 2012, the Justice Department designed Operation Choke Point to attack telemarketing, internet, mail and other widespread market fraud by restricting scamsters’ access to the system of banking. The Justice Department teamed up with the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency to crack down on scams by making use of the federal regulators to put pressure on banks to not provide services to businesses that are fraudulent. However, critics of the program are of the opinion that it was utilized to pressurize on legal industries that the Obama administration did not like, such as payday lenders and firearms sellers. One of Obama’s former official of the Justice Department said in April that the program had unconscious, but collateral consequence on the US consumers and banks. Operation Choke Point: A Shadow Campaign A spokesman for Advance America, Jamie Fulmer, said that this program is a shadow campaign. To eliminate short-term lending, regulators are using backdoor tactics. In a 2014 lawsuit filed against the Office of the Comptroller of the Currency, the Federal Reserve and the Federal Deposit Insurance Corp. for their roles in the program the CFSA and Advance America are co-plaintiffs. Twenty-one banks have already sent their termination notifications to the company since 2013 said Christian Rudolph, Advance America’s chief financial officer. When requesting… Read More