Are You In The Wrong Business?

[Pilgrim]

The answer could be yes if your small business deals in such out of favor items like old coins or firearms. Wonder how many people are aware of this govt program to weed out politically incorrect enterprises despite the fact that they're completely legal.

With no explanation, Brian Brookman last month lost the bank account for his pawn shop.
He had no idea why. Brookman says his store in Grand Haven, Mich., never had been in trouble with federal or state officials. And being in the pawn industry, he was required by law to get a city license every year.

“If there was ever a problem, they wouldn’t renew my license,” Brookman, a former police officer and Army veteran, told The Daily Signal.

After researching his case on the Internet, Brookman says he concluded that his banker, JP Morgan Chase, closed the account because two of his business activities — dealing in vintage coins and selling firearms — were labeled “high risk” by federal bureaucrats as part of an Obama administration initiative called Operation Choke Point.

Critics say Operation Choke Point, so dubbed by Department of Justice officials, seeks to weed out businesses that the White House considers objectionable...

A House report indicates that a primary target of Operation Choke Point is the short-term lending industry. A more expansive list of out of favor, non-financial businesses includes certain ammunition merchants, coin dealers, home-based charities, and sellers of pharmaceutical drugs – also lawful enterprises.

Meet Four Business Owners Squeezed by Operation Choke Point

Personally, I think some crooks like payday lenders should be put out of business permanently - but through the proper legislative process. Unfortunately these shysters have a strong lobby in Congress and our representatives just look the other way while their pockets get lined. This "operation" is just another example of the Obama administration using regulations and DOJ strong-arming to destroy enterprises they deem politically incorrect.

 

[Pilgrim]

Update: now the Obama administration is backing away from some of the nefarious activities Operation Chokepoint due to "confusion". This whole thing is just another example of the Obama/Holder DOJ operating as a dictatorship.(emphasis mine)

Featuring a range of both legal and illegal activities that President Obama’s Department of Justice finds objectionable, the “high risk” list was posted by the FDIC on its website:

The report by the House Oversight and Government Reform Committee concluded that the bank regulators were “acting in coordination with Operation Choke Point,” a program created by the Justice Department to force legally operating enterprises out of business by cutting them off from the financial services they need to survive...

In July 15 testimony before the House Financial Services Committee’s subcommittee on oversight and investigations, FDIC official Richard J. Osterman acknowledged that his agency “communicated and cooperated with DOJ staff involved in Operation Choke Point.”
Within two weeks of the hearing, FDIC-supervised banks received a letter from the agency announcing it was “clarifying” the guidance and removing lists of “high risk” businesses because they had “led to misunderstandings.”

Feds Blame ?Confusion? for Choking Businesses' Access to Banks

Note these particular "high risk" activities listed:

Ammunition Sales
Firearms Sales
Coin Dealers
Government Grants
Surveillance Equipment
Tobacco Sales

Note the "list" is not limited to the activities shown above. Suppose they decide to include the transportation of certain kinds of "high risk" freight?

 

[Turtle]

Some confusion, possibly.... The "high risk" refers to what is actually a "high reputation risk," to the bank, as determined by the federal government, rather than financial or some other type of risk. And isn't that rich. Of course, the reputational risk to the bank means more hassles from the government.

A program that was initially built upon the goals of stopping financial fraud has quickly, and not surprisingly, devolved into a massive government overreach into private businesses that are operating within the law. The way it works is that the DOJ informs financial institutions that certain industries are more likely than others to be involved in unauthorized charges of consumer credit and bank cards. They likewise inform the banks that the DOJ is going to keep a really close eye on these industries, and those who do business with them, which means prosecutorial action, subpoenas, and scrutiny on those industries, and massive penalties on the institutions that work with them. The intention of the government is to make the banks unwilling to deal with the government harassment and simply cut anyone in those industries off from the financial institutions.

And it's working. Porn stars are losing their personal bank accounts over this.

Teagan Presley, a former porn star, and her comments upon finding out she was suddenly no longer a Chase customer.

When Presley went to the bank in person to ask why, she was told it's because she's considered "high risk."

"And then they told me that they canceled my husband’s account too, because our social security numbers are linked," Presley told VICE News. "They told him that it was because I'm a notorious adult star. Which is funny, because I'm kind of a goody-goody in the business, and I'm not even doing porn anymore."

​

So this ex-porn star and her husband represent a high moral risk to the bank's reputation, according to the federal government, who has no morals at all. I do love a good irony.

 

[Pilgrim]

Other ironic "high risk" categories:

Government Grants - nothing else need be said

Tobacco Sales - sales of a legal product which has been proven to cause serious illness and death when used as directed; made from a crop which is - you guessed it - still heavily subsidized by the taxpayers' dollars. Don't expect this subsidy to go away in the foreseeable future. Another irony: FLOTUS is concerned about the lunches being eaten by our children, but not about the cigarettes they smoke.

Senate rejects amendment to end tobacco farm subsidies | TheHill

 

[cheri1122]

Turtle: unless I misunderstand, the program is aimed at industries known to perpetrate high rates of scams against consumers - which certainly includes unauthorized charges to bank & credit cards, but is a lot more than that.
For instance, government grants are included because of the educational enterprises that sign students up, promising them grants, [which they do qualify for, but must repay if they don't graduate]. The school officials know dam well the students won't graduate, for whatever reasons, but the grant money is paid to the school, so they sign up anyone with a desire to learn a trade, and a pulse. When they can't get any more 'students', they close up and start over somewhere else.
There were 30 enterprises on a list I saw, and every one is an area known for sketchy behavior. Not by every enterprise, but enough to make any halfway intelligent person wary.

 

[Turtle]

Turtle: unless I misunderstand, the program is aimed at industries known to perpetrate high rates of scams against consumers - which certainly includes unauthorized charges to bank & credit cards, but is a lot more than that.
For instance, government grants are included because of the educational enterprises that sign students up, promising them grants, [which they do qualify for, but must repay if they don't graduate]. The school officials know dam well the students won't graduate, for whatever reasons, but the grant money is paid to the school, so they sign up anyone with a desire to learn a trade, and a pulse. When they can't get any more 'students', they close up and start over somewhere else.
There were 30 enterprises on a list I saw, and every one is an area known for sketchy behavior. Not by every enterprise, but enough to make any halfway intelligent person wary.

You misunderstand. The program was initially aimed directly, from the credit card fraud and consumer protection perspective, at the quick loan, check cashing and credit repair businesses, but once that door was opened, people started adding other industries to the pot.

I think saying every one of the 30 enterprises is known for sketchy behavior is a little over the top. There are 12, at least, which are not really known for sketchy behavior at all (or at least not any more than Walmart, Sears, Comcast, AT&T, Verizon, or anybody else), and one is one the list to squash free speech. The entire list is a cornucopia of various lobbies at work: the moral lobby, the gun control lobby, the control freak lobby. It's a joke, and it's being abused. There is no reason whatsoever to shut down the banking of arms sealers, ammunition dealers, fireworks sales, convenience stores who sell lottery tickets, or tobacco, other than a political agenda.

 

[layoutshooter]

The government is passing these laws as a means of controlling the People. They spout about "protecting" us from the "bad guys" when the real intent is to push these laws to further their agenda through "back door" means. It's the government that are the "bad guys".