FDIC Chairman Chokes on ‘Choke Point’ Testimony

FDIC blue and yellow logo

When FDIC Chairman Martin Gruenberg testified about his agency’s involvement in Operation Choke Point, he insisted FDIC was simply trying to inform banks about high-risk businesses and reduce fraud—not threaten banks or blacklist industries such as firearms retailers. However, in the two-hour hearing before the U.S. House Subcommittee on Oversight and Investigations on March 24, Gruenberg told lawmakers that the FDIC should be faulted for failing to communicate to the public that it did not want banks to cut off legitimate businesses from the banking system.

“These examples came to be viewed as a prohibition of serving, that these examples came to be seen as a prohibition on serving certain customers, was clearly in hindsight a failure on our part,” Gruenberg said.

FDIC blue and yellow logo
When FDIC Chairman Martin Gruenberg testified about his agency’s involvement in Operation Choke Point, he insisted FDIC was simply trying to inform banks about high-risk businesses and reduce fraud

The government used Operation Choke Point to stop financial service companies from providing banking and credit services for some industries. Operation Choke Point was a Department of Justice initiative that targeted gun and ammunition businesses as high risk, along with payday lenders, pornographers, Ponzi schemes, and others. See our previous coverage of the topic here, here, and here.

During the hearing, Committee Chairman Rep. Sean Duffy (R-Wis.) compared Gruenberg to former IRS official Lois Lerner and called for his removal from office. Duffy took over as chairman of the House Financial Services Subcommittee on Oversight & Investigations in January.

“You’re abusing your power,” Duffy said. “You say, ‘I don’t like these industries. And I’m gonna use — just like Lois Lerner — the power that I have at the FDIC to target these industries, and I’m gonna put them out of business. … I think the buck stops with you. I don’t think you should chair the FDIC.” Sen. Marco Rubio (R-Florida) introduced legislation to end Operation Choke Point in February. His proposal would fully defund Operation Choke Point and prohibit the incoming attorney general from restarting it or a instituting a similar program. During the markup of S. Con. Res. 11, the fiscal year 2016 budget continuing resolution, Sen. Mike Crapo (R-Idaho) introduced an amendment to establish a deficit-neutral reserve fund to end Operation Choke Point. The Crapo amendment was approved by a committee vote of 13-9 and the full Senate passed S. Con. Res. 11 with the Crapo amendment on March 27.

Is the DOJ’s “Choke Point” effort dead, or will it continue in some more covert fashion? Tell us what you think in the comments section below.

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Comments (19)

  1. The sad truth is that this administration cannot be believed on any topic. Will “Operation Choke Point” rear its ugly head again? You can take it to the bank. Pardon the pun.

  2. “…he insisted FDIC was simply trying to inform banks about high-risk businesses and reduce fraud—not threaten banks or blacklist industries such as firearms retailers….”

    Well, sure. What else could it have been? After all, that’s why it has such a bland sounding, innocuous name: Operation CHOKEpoint [emphasis mine]. What do you choke that you don’t want to kill?

  3. What many do not realize is that the FDIC has been terrorizing small and mid sized banks since 2007. There’s a lot of suspicion that the efforts are directed not at insuring bank solvency which is the role of the FDIC but rather on protecting the megabucks with wall street and white house connections.

    In today’s regulatory environment the midsize and smaller banks are boing to jump to the FDIC suggestions , The large banks are going to follow the FDIC directive because they owe so much to Obama . Shortly after he came to office Obama summoned the bankers to a meeting and explained the facts of life – he Obama was the only one standing between them and the pitchforks of the populace.

    1. I think you’re absolutely right. Sounds Satanic enough to me. Truly dictatorial and intimidating (for some).

  4. Having taken a job with the FEDS last year and Quit in a few months.

    I think what most do not know is that this Man has been in office

    long enough to with his appointments from top to bottom

    install corruption in all the government.

  5. We are all too well aware of the lies and deceipt that have been heaped upon us by the Feds, but now state government is being coerced into the fray by Bloomberg and his gun-hating Gestapo. Be vigilant in watching what they are beginning to do in your state to deceive local lawmakers by lobbying and throwing Bloomberg millions towards subtle gun law “protections”, which are gradually eroding our second amendment rights.

  6. Abuse of Power. That has be the Hallmark of the Obama administration. Blatant Abuse of Power. In your face and dare you to stop us Abuse of Power. And until the recent electoral changes in the Senate, they were completely getting away with it. They still are to a great extent. The tide may be slowly turning. But, as bad as previous administrations have been, I believe that history will show that Obama and his administration has been the most corrupt administration that we have ever had. Transparent MY A**!

    1. I was going to leave a comment but you have hit the nail on the head. This group of thugs will be Obama’s legacy, the most power mad, corrupt administration and the most insidious affront to the Constitution in the history of These United States. Remember this next time you vote (or uselessly stay home in smug protest) It isn’t just the person you vote into office: it is also all their friends and those who paid for the campaign that you are voting for.

  7. Sounds like typical CYA and back-paddling when your rear is in the noose. If the plan was not to shut off certain businesses then why did it occur?

  8. To answer the simple question – Yes. The Gov’t will try again in a different form. They seem incapable of not doing so – again & again. Whether you own a gun or not, you have the right to do so!

  9. Can we apply the RICO Act to the federal government (intentionally not capitalized) agencies, individual politicians and bureaucrats?

    Better yet, can we find a Prosecutor with the intestinal fortitude to do so?

    I see a systemic, multi-agency tendency towards violation of State & Federal law, as well as intentional violations of Civil Rights across the board against the populous.

  10. I’m sure if you ran a comparison program of the testimonies presented by Obama appointees on Fast and Furious, the IRS abuse, Benghazi, the AP abuse, and now Operation Choke Point you would find enough of a similar thread to demonstrate that each and every one of these snakes was speaking from the same set of talking points Obama’s press people and lawyers provided them in order to cover up the truth.

    And the truth is that these people are all actively working to undermine America and the Constitution.

  11. Working in a law enforcement government position as I do, most of us find ourselves treading very lightly on inter-office discussions in regards to politics. For fun, some of us have made a little game at trying to guess what another agent’s political affiliations may be. But around election times, many personnel will inadvertently let slip a bit of their political leanings.

    I recall just before Obama’s first election, a conversation I was casually having with an assistant director. He wanted to know why I was so adamantly against Obama becoming President. He was perplexed and found it ridiculous that a person in my position could be so worried about one man. He said that there are too many built in protection mechanism should Obama attempt to take our Country down the wrong path.

    My reply to the assistant director was that I did not fear Obama himself, I fear what he represents. I fear that his weak leadership will embolden terrorists and other countries which hold great disdain against us to act out as never seen before. I reminded the director that Obama even campaigned that he was willing to negotiate with terrorist Iran which is unprecedented and defies all US policy.

    I then expressed my domestic concerns that Obamas lack of leadership would also allow the subordinate executive agencies under his control to run amuck and do as they please. I said that when no one is paying attention, there are people in certain positions that will think they can get away with anything.

    I concluded by saying that with Obama in charge you can count on thing for certain – everyone from the highest positions in government all the way down to the most liberal of school teachers will feel free to allow their true colors to show. That these people’s deep-seeded perversions that normally would be left in check will now seep from the sewers into our daily lives and we will be forced to accept them as common place because Obama will do nothing to stop them.

    Seven years later, is there a single person here that dares to challenge me as wrong?

    1. Interesting is your game …. LOL I’m the same professionally (for another 15 months at least) and I’ve already been labeled as a “Tea Party Founding Memeber”. I consider that title a badge of the highest honor.

    2. No G-Man you had it pegged. They do what they want, say what they want, assume no responsibility and suffer no consequences.

      Reminds me of a movie line….”It’s good to be the king”.

    3. The good thing is…, those who have shown their true colors, have been exposed for all to see. Come election time again, it will be easier to make a list of those we should avoid voting for at all costs.

  12. I don’t believe a word of this for a second. Lie, deny, counter-accuse is the Federal by-word when they care called on the carpet, especially when they commit devious liberal subversive act(s) such as this.

  13. Of course this exact same behavior will emerge from the permanent, cemented in by civil service personnel rules, progressive, back-room paper pushers. They are, right now, thinking up ways around any attempt to stop them. It will some innocent rule or policy again cloaked in “safety” rhetoric. They NEVER give up.

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