Trump’s DOJ Gives Payday Lenders and Financial Scammers a Massive Gift
Administration Scraps “Operation Choke Point” While Admitting Program Uncovered “Criminal Activity” by Predatory Lenders
WASHINGTON, D.C. – Once again, the Trump Administration is changing the rules to make life easier for financial predators and scammers, this time ending a successful effort to crack down on money laundering and other illegal activities by predatory lenders and others. Yesterday, Assistant Attorney General Stephen Boyd sent a letter to House Judiciary Committee Chairman Bob Goodlatte (R-VA) committing to roll back the effective Obama administration program “Operation Choke Point,” despite admitting that the program “led to the discovery of other criminal activity.”
Operation Choke Point was implemented in 2013 to prompt financial institutions to, as the Obama administration put it, “‘choke off’ the flow of money to the fraudulent merchants” with the purpose of combatting “mass-market consumer fraud schemes in which financial institutions were either direct or indirect participants.” The program’s demise was a high-profile goal of the predatory payday lending industry and its allies in Congress.
“This is a massive giveaway to predatory payday lenders and other shady financial scam-artists. Operation Choke Point has been incredibly effective at cracking down on the flow of money to fraudulent merchants that violate the law and target vulnerable consumers,” said Karl Frisch, executive director of Allied Progress.
He added, “Ending this program will make it easier for financial predators and other unscrupulous industries to get the resources they need to carry out their deceptive and frequently unlawful business practices.”
Allied Progress identified evidence of pay-to-play activities behind previous attempts to roll back Operation Choke Point. In 2014, payday lending industry ally Rep. Blaine Luetkemeyer (R-MO) introduced H.R. 4986, The End Operation Choke Point Act of 2014. The legislation’s introduction came on the heels of a June 5, 2014 lawsuit filed against the Obama administration regarding Operation Choke Point. The same day the lawsuit was filed, Luetkemeyer’s campaign received a $1,000 contribution from a pro-payday industry political action committee (PAC), and an additional $7,500 in contributions from payday lenders followed days later.
To speak with Karl Frisch about Operation Choke Point, please contact Tucker Middleton at 202-644-8526 or tucker@alliedprogress.org.
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