The National Shooting Sports Foundation (NSSF) has been investigating the possible role of the federal government—specifically the Department of Justice’s “Operation Choke Point”—in influencing banks in their lending and business-banking relationship decisions regarding firearms companies.
The investigation that Justice Department officials dubbed “Operation Choke Point” was first disclosed in March 2013, according to American Banker magazine.
In August 2013, the Wall Street Journal reported that “the Justice Department had begun targeting banks that service a broad range of what it considers questionable financial ventures. The government has issued subpoenas to banks and other companies that handle payments for an array of financial offerings, ramping up an investigation that has been under way for several months.”
An NSSF statement said, “We have heard from several industry members that they had banking relationships terminated by their lending institutions.
“We respect the right of financial institutions to make business decisions based on objective criteria. It is unacceptable, however, to discriminate against businesses simply because they are engaged in the lawful commerce of firearms, an activity protected by the Second Amendment.”
NSSF staff has met with members of the House Financial Services Committee and members of the Oversight and Government Reform Committee concerning several documents that have surfaced from the FDIC labeling companies in the firearms and ammunition industry as “high risk.”
Participating in DOJ’s Operation Choke Point, the FDIC has classified some industries as high risk: Cable Box De-scramblers, Credit Repair Services, Dating Services, Drug Paraphernalia, Escort Services, Ponzi Schemes, Pornography, and Racist Materials, to name a few listed here. Included in this group are “Ammunition Sales” and “Firearms Sales.”
On August 22, 2013, 31 members of Congress sent a letter to Attorney General Eric Holder and FDIC Chairman Martin Gruenberg, requesting a briefing of Congressional staff members on the project.
In the letter, which was organized by Congressman Kevin Yoder (R-KS) and Congressman Blaine Luetkemeyer (R-MO), the members of Congress wrote, it “has come to our attention that the DOJ and the FDIC are leading a joint effort that according to a DOJ official is intended to ‘change the structures within the financial system…choking [online short term lenders] off from the very air they need to survive.’”
“We are especially troubled by reports that the DOJ and FDIC are intimidating some community banks and third party payment processors with threats of heightened regulatory scrutiny unless they cease doing business with online lenders,” the letter read. “As a result, many bank and payment processors are terminating relationships with many of their long-term customers who provide underserved consumers with short-term credit options,” it continued.
NSSF said, “As a result, we have worked with Rep. Luetkemeyer and expect that he will offer today an amendment to the FY15 Commerce, Justice, Science and Related Agencies Appropriations Bill, which would prevent federal funds from being used as part of ‘Operation Choke Point’ or in any effort targeting companies involved in the lawful commerce in firearms.”
NSSF said it will continue to investigate the extent of any improper government involvement in lending practices.
Powderhorn Outfitters, who sells firearms, archery gear and fishing equipment in Hyannis, Massachusetts, posted in an online forum this week that its longtime bank—TD Bank—had suddenly dropped its account.
Other retailers affected include:
- T.R. Liberti, owner and operator of Top Gun Firearms Training & Supply in Miami
- Black Rifle Armory in Henderson, Nevada
- Gun parts maker American Spirit Arms in Scottsdale, Arizona
Do you think ammunition and firearms businesses belong in the FDIC’s high-risk list? Let us hear from you in the comment section.
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