Illegal Obama-Era Program Rebuked as Federal Court Green-Lights Lawsuit Against Government

July 6, 2017 | Federal & CFPB Regulations

ALEXANDRIA, VA – The U.S. District Court for the District of Columbia yesterday issued a stinging rebuke of the Obama administration’s Operation Choke Point, ruling that a lawsuit challenging the legality of the government’s actions can continue and clearing the way for the lawsuit to proceed to discovery.

Operation Choke Point is an illegal government campaign, launched in 2013, that employs strong arm tactics to force banks to end their legal business relationships with smaller, licensed companies that were disfavored by bureaucrats from the previous administration. These industries include local small businesses like fireworks and firearms companies, home-based charities, and small-dollar lenders. In June 2014, the Community Financial Services Association of America (CFSA) and its largest member company, Advance America, filed a lawsuit against the federal government seeking to end Operation Choke Point and the government’s improper regulatory overreach.

“We are pleased to see the Court rebuff the government’s legal maneuvering and attempts to sweep its past bad behavior under the rug. For years, Operation Choke Point has threatened to suffocate the ability of legal and licensed businesses to operate freely and fairly, and the government bureaucrats who started this must be held accountable,” said Dennis Shaul, CEO of CFSA.

In a 15-page opinion, District Court Judge Gladys Kessler held that the plaintiffs had met their burden and denied the defendants’ Motions to Dismiss.

“While this ruling is a welcome development for our members, the federal government continues its campaign against small-dollar lenders. Until justice is served, businesses will continue to operate in fear of the government’s unjust ideological crusade. We therefore urge the Court to act quickly in all future proceedings of this case,” Shaul added.

The defendants in the lawsuit are the Federal Deposit Insurance Corporation (FDIC), The Board of Governors of the Federal Reserve System, The Office of the Comptroller of the Currency (OCC) and Thomas J. Curry, Comptroller of the OCC.

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