On Wednesday, Sens. Ted Cruz (R-Texas) and Mike Lee (R-Utah) joined forces to introduce legislation to end the Obama administration’s abuse of its regulatory authorities to deprive firearm and ammunition related businesses of access to financial services. The bill is the Senate companion to Rep. Blaine Luetkemeyer’s (R-Mo.) Financial Institution Customer Protection Act (HR 766), which passed the House with bipartisan support in February.
Like the House bill, the Senate legislation would institute numerous reforms to bring more transparency and accountability to federal oversight of banks, all aimed at preventing the sort of unchecked abuse of power at the heart of Operation Choke Point (OCP). This Obama administration “enforcement” program lumped together legal and illegal businesses (including firearm and ammunition sellers) into a “high risk” category and threatened the banks servicing them intense regulatory scrutiny. The goal of OCP was to deter the banks from forming or continuing relationships with the targeted industries, thereby driving them out of business.
Like the House version, the Senate bill would require regulators that suggest or order a bank to terminate a customer’s account to have material reasoning, with reference to any specific laws or regulations the enforcement agency believed were being violated. Moreover, no such reason could be based solely on “reputational risk,” the supposed basis for including firearm and ammunition businesses within the scope of OCP’s “high risk” target list.
Regulating agencies would also have to submit annual reports to Congress documenting any such requests or orders. Finally, the bill would make important amendments to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, which agencies have cited as authorization for OCP, to clarify the law’s scope so as conclusively to preempt this dubious justification.
“Under President Obama’s reign, the DOJ has abandoned its longstanding tradition of staying out of politics and has instead become a partisan arm of the White House,” Sen. Cruz said in introducing the bill. “The Obama administration initiated Operation Choke Point to punish law-abiding small businesses that don’t align with the President’s political leanings. The DOJ should not be abusing its power by trying to bankrupt American citizens for exercising their constitutional rights.”
Sen. Lee commented, “Our right to bear arms – a right granted by God and protected by the Constitution – is fundamental to the protection of all our other rights. An executive branch bent on taking away this right, through any administrative means necessary, is a danger to all Americans.”
NRA applauds Sens. Cruz and Lee for continuing the good work on this effort begun in the House, and we urge the Senate to complete that job and deliver a strong bill to the president’s desk.