The End of Operation Choke Point, Sort of
Richmond partner David Anthony was quoted in a February 5 PYMNTS article about the FDIC partially backing down on Operation Choke Point – a joint initiative between the DoJ, FDIC and CFPB that was created to investigate banks in the United States and the business they conduct with payday lenders, payment processors and other companies deemed at greater risks for money laundering and fraud.
Two weeks ago, the FDIC issued regulatory guidance that asked banks to evaluate potential customer relationships on a case by case basis rather than on industry generalizations. Noting that just because the FDIC pull back was going on didn’t necessarily mean lenders should feel “home-free” when it comes to working with certain industries, particularly short term lenders, David said: “Industry watchers are looking for the other shoe to drop in terms of regulatory enforcement investigations and actions rather than the direct approach. We do not believe that the focus on this issue is going away anytime soon.”