Concerning the updated Senate legislation, ACA International is suggesting to include provisions that will address Operation Choke Point and other similar initiatives. With such a revision in the legislation, termination of banking relationships for legitimate businesses will be limited.
During Obama’s presidency, Operation Choke Point came out as one of the most controversial programs. In this initiative, the US Department of Justice (DOJ) and Federal Deposit Insurance Corporation (FDIC) ordered financial institutions to halt financial services for certain legally operating and licensed businesses.
Simply put, legal businesses were deprived of significant financial services, including debt collection.
Operation Choke Point ended; mainly due to the DOJ recognizing that disfavoring certain businesses and skipping the due process was problematic, to say the least. But even after this controversy, ACA members and businesses in the accounts receivable management industry continue to experience terminated banking relationships.
Now, ACA International and its members are urging the prohibition of Operation Choke Point and similar initiatives in the Secure and Fair Enforcement Banking Act of 2019.
Meanwhile, H.R.1595 recently passed the US House of Representatives. With strong bipartisan support, this legislation was passed in September 2019 and has the power to strengthen protection against Operation Choke Point.
Mark Neeb, CEO of ACA International, said that they support the legislation because it prevents federal banking regulators from ordering a bank to cut off any kind of services to legal businesses.
Furthermore, if there’s any request to restrict or terminate a customer’s account, H.R.1595 would require federal banking agencies to provide credit unions or banks with written justifications.
Neeb agreed that these are important protections for legally operating businesses that could be a target of unfair banking relationships. They support the said requirements and further encouraged the Senate to consider similar provisions found in H.R.1595 when updating the legislation.
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