5/14/15 Operation Choke Point

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Operation Choke Point is a federal program.  Two of the key players are the Justice Department and federal banking regulators.  The goal is to choke-off access to financial services for a targeted entity.

After 9/11, the U.S. government used this tactic to cut-off terror organizations from banking services.

The problem is Operation Choke Point is being used domestically against legitimate and legal businesses.  These include gun retailers, ammunition stores, coin dealers, dating services and payday lenders.

The program was started in secret without Congressional knowledge.  This prompted dozens of members of Congress to sign a letter demanding answers from the Obama Administration.

Here’s how it works.

According to Congress and media reports, banking regulators intimidate banks and payment processors by threatening them with increased audits and subpoenas if they continue doing business with certain merchants and industries.

Faced with the prospect of audits and legal battles costing millions of dollars, the banks simply drop the targeted clients.

In the words of Godfather Vito Corleone, they got an offer they couldn’t refuse.

Here’s the irony.  The same regulators trying to force banks to discontinue business with perfectly legal businesses are also encouraging banks to provide services to the marijuana sales industry, which is still a violation of federal law.

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