Testifying before a House Financial Services subcommittee on July 15, Lauren Saunders of the National Consumer Law Center warned against measures that “would undermine important efforts underway at the Department of Justice and banking regulators designed to ensure that banks do not facilitate illegal activity.” HR 4896, introduced by Rep. Blaine Luetkemeyer (R-Mo.), would limit the reach of Operation Choke Point, a Justice Department crackdown on banks and payment companies that help businesses illegally remove money from customers’ bank accounts.
“Many scams, frauds and illegal activity could not occur without access to the consumer’s bank or credit card accounts through the payment system,” Saunders said in testimony delivered on behalf of Americans for Financial Reform, the Consumer Federation of America, the Center for Responsible Lending, and US PIRG, as well as NCLC’s low income clients. Contrary to claims by opponents, she added, the focus of Operation Choke Point is clearly on “illegal conduct, not activity that the DOJ deems immoral.”
In a joint letter, more than 30 organizations have urged the House to reject “any bills to defund or weaken efforts to fight payment fraud or to insulate banks or payment processors that do not conduct appropriate due diligence or ignore red flags.” When banks “choose profits in the face of blatant signs of illegality,” the letter continues, “they become an appropriate target for enforcement action.” (See additional materials on Operation Choke Point.)
Marcus Stanley of Americans for Financial Reform testified at the same hearing. His testimony focused on proposed legislation that would undermine the Volcker Rule, hinder the operations of the new Office of Financial Research and reduce protections against abuse of subprime mortgages. Three of the pending bills, he warned, would give the financial industry new leverage in its persistent efforts to delay and disrupt financial rulemaking, and cause potential harm to consumers and investors. His testimony also discussed new proposals for changes to capital rules.
Contact Jim Lardner, Americans for Financial Reform, 202-466-1854 / email@example.com