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The ICBA is starting to gag on Operation Choke Point. Before it and its members pass out from lack of oxygen, it's demanding that the Department of Justice loosen its grip on the windpipes of its members.
In a letter Tuesday to the DOJ, Independent Community Bankers of America president Camden Fine argues that the investigation known as Operation Choke Point has an overly broad scope and is hurting community banks' ability to compete with their larger peers.
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[T]he ICBA letter suggests that the Justice Department is singling out smaller banks. "The indiscriminate targeting of community banks offering these services also places community banks at a competitive disadvantage with large banks," Fine writes.
The only lawsuit filed so far as part of Operation Choke Point was brought against a small bank in North Carolina, but large banks have also gotten subpoenas, according to sources.
As the linked article points out, huge banks have received investigative inquiries, but only a little bank has had an actual enforcement action taken against it. Bullies always start out with the smallest member of the group, hoping to intimidate those who might actually be able to fight back to be intimidated.
As the article also discusses, the complaints of the ICBA mirror those previously made by the ABA. Unlike the ABA, however, the ICBA's complaint includes the fact that community banks are being singled out for the harshest treatment. That distinction makes sense, inasmuch as the ICBA focuses on smaller banks, while the ABA leans more toward the interests of the bigger banks.
Both trade groups, however, make the very valid point that law enforcement authorities, and bank regulators, would do a lot less damage to banks and legitimate payment processors if, instead of beating up the banks they regulate, they went after the "bad guys" among the payment processors. If they did so, they might alleviate concerns of many that what the folks at the top are after is not a few bad apples, but entire industries engaged in perfectly legal businesses that "the enforcers" find "distasteful."
