Please disable your Ad Blocker to better interact with this website.

Jannah Theme License is not validated, Go to the theme options page to validate the license, You need a single license for each domain name.

FDIC Intimidates Banks From Doing Business With Politically Unpopular Companies

Will this presidential election be the most important in American history?

The abuse of power by the Obama administration goes beyond the Internal Revenue Service (IRS) targeting politically conservative organizations.

Congress is investigating another source of power abuse stemming from Operation Choke Point – a Department of Justice led multiagency effort that seeks to “choke off” banking services to businesses suspected of engaging in consumer fraud.

Under this program the regulatory power of the Federal Deposit Insurance Corporation (FDIC) was used to intimidate banks from working with targeted businesses.

Unsurprisingly, bureaucrats went too far by expanding its original focus on fraud to businesses that are politically unpopular and deemed “high risk” by the FDIC.

For example, the 2011 FDIC guidance included a “high risk” list that grouped fraudulent businesses such as Ponzi schemes and Pyramid-type sales with other legitimate businesses such as gun and ammunition companies, tobacco sales and coin dealers.

Predictably, innocent small business owners were punished because they could not get access to banking services.

An editorial in the Orange County Register described the harmful impact of Operation Choke Point on Global Hookah Distributors a company that sells Hookah pipes and supplies.

Bank of America closed the personal and business banking accounts of the company’s owner Brennan Appel after a dozen year business relationship.

Then Appel’s payment processor EFT Network also closed his business account. Troubled by the harassment of his business, Appel discovered the source of the problem was Operation Choke Point.

In a recorded conversation with the president of EFT Network, Alex Bacon, Mr. Bacon explained that Operation Choke Point was behind Mr. Appel’s account closure, and that his own company had also been a target. Mr. Bacon then described the power wielded by the bank regulators if banks do not comply. “[Bank examiners say] ‘We’re going to make your life miserable. Instead of auditing you once a year, we’re going to audit you four times a year. And now we’re going to come in and look at all of this, and if we find anything negative, we’re going to write it up, and then you’re going to incur increased cost, increased focus with your board of directors and from other banking regulators.’ And they all run scared because they’re all sheep.” Audio clips of the conversation are available at the USCC website.

Testifying at a hearing before The Oversight and Investigations Subcommittee of the Financial Services Committee FDIC head Martin J. Gruenberg said the “high risk” list of companies was eliminated and that banks had misread the intention of FDIC’s guidance.

FDIC’s lead role in strong arming legal businesses serves as another example of executive branch abuse of power.

Tom Borelli

Dr. Tom Borelli is a Newsmax TV contributor and radio commentator addressing political issues from a conservative grassroots perspective. As a columnist, he has written for The Washington Times and authored articles for Newsmax Magazine, Newsmax Insider and previously was a co-host with his wife Deneen Borelli on the SiriusXM Patriot channel. Dr. Borelli appeared on numerous television programs, including the highly ranked Fox News Channel’s “The O’Reilly Factor,” “Hannity,” “The Kelly File," and "America’s News Headquarters." He has also appeared on Fox Business Network’s “Making Money with Charles Payne” and “After the Bell” as well as TheBlaze TV’s "The Glenn Beck Program" and "Dana!" Prior to working for public policy organizations, Dr. Borelli was a managing partner with the investment advisory firm of Action Fund Management, LLC and a portfolio manager for the Free Enterprise Action Fund (FEAF) where he used shareholder activism to challenge corporations that sought to profit from the growth of government. During his 25 years with the Altria Group, Inc., he built a foundation in public policy and issues management, drawing from diverse experiences ranging from basic research to corporate affairs. Dr. Borelli served as science fellow for the U.S. House of Representatives' Committee on Science, Space, and Technology during the 100th Congress. Dr. Borelli has also published scientific papers on interferon and human leukemia.

Related Articles