Wall Street Journal: A Regulatory Vendetta Exposed
Earlier this month, The Wall Street Journal added its voice to the call for action to address Operation Choke Point, federal regulators’ illegal campaign to pressure banks to cut ties with regulated, legal businesses, including short-term, small dollar lenders.
In an editorial entitled “A Regulatory Vendetta Exposed: A lawsuit shows how the feds tried to destroy a legal industry,” the Journal lays out some of regulators’ most egregious actions and statements as they sought to effectively eliminate an entire industry motivated exclusively by their personal scorn for short-term lending. The editorial board warns of the dangerous precedent and slippery slope Operation Choke Point presents in terms of how activist bureaucrats, fueled by partisan ideology, can use regulation and outright intimidation against any business they find objectionable, not just short-term lending.
The Journal editorial begins:
“The wheels of justice turn slowly, but the Obama Administration’s vendetta against payday lenders is now emerging into full view in federal court. It isn’t pretty. Government regulators so loathed payday lending that they tried to ruin a legal industry by cutting it off from the banking system. This tactic could be used to destroy any business—from gun stores to abortion providers.”
Senate Banking Committee Letter
On the heels of the Journal’s editorial, the Republicans on the Senate Banking Committee sent a pointed letter to new Federal Deposit Insurance Corporation (FDIC) chair Jelena McWilliams, urging her to act to remedy the effects of Operation Choke Point to ensure lawful, regulated businesses are able to access the banking system without undue intervention by FDIC bureaucrats.
“Operation Choke Point, and its associated culture and Choke Point-like regulatory actions, must end once and for all. This abuse of government power is antithetical to the best interests of the banking industry, the US economy, and the consumers who rely on banking products and services. This should not be a partisan issue: no administration – Republican or Democratic – should be able to use the administrative state to silence industries that they do not like.”
Holding the Ringleaders Accountable
One of the most critical steps the FDIC can take to rectify the harms of Operation Choke Point would be to finally hold the ringleaders of this campaign accountable. In an article for Forbes, the Heritage Foundation’s Norbert Michel writes with disbelief about the fact that many of the high-ranking bureaucrats involved in masterminding Operation Choke Point, primarily at the FDIC, remain in positions of authority, and in one instance, received a promotion.
“It is now clear that these unelected government officials set out to harm law-abiding citizens. Yet many of the government officials named in these documents are still employed by the same government agency. Most of these folks work at the FDIC, and one has even moved up from a regional director position to FDIC Ombudsman.
“At the very least, the Trump administration owes the public a full investigation into Operation Choke Point and an explanation for why many of the people involved in this abuse of power are still working for the government.”
The administration should heed this growing chorus and act to right the wrongs of Operation Choke Point and ensure it never happens again – to short-term lenders like Advance America or any other regulated business.