First lawsuit of its kind seeking to end unlawful program that harms licensed, regulated businesses.
The Community Financial Services Association of America (CFSA) along with its largest member company, Advance America, filed a lawsuit last night seeking to end Operation Choke Point and the abuse of regulatory power by the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Board of Governors of the Federal Reserve System. This coordinated interagency initiative is adversely affecting lawful, responsible businesses.
“It is unfortunate that we now must resort to litigation to protect legal, regulated businesses from this improper federal regulatory overreach. We have attempted to bring our concerns regarding Operation Choke Point to the attention of federal officials and Congress,” said Dennis Shaul, CEO of CFSA. “Despite this vigorous effort to inform regulators of the harmful effect of Operation Choke Point, this abuse of regulatory authority continues, and many legal businesses, including nonbank lenders who are members of CFSA, are losing their basic banking services, such as bank accounts and lines of credit.”
The lawsuit declares: “Although CFSA and its members are part of a lawful and legitimate industry that serves the critical short-term credit needs of millions of American consumers, the Defendant regulatory agencies, with active support from the Department of Justice (DOJ), are engaged in a concerted campaign to drive them out of business by exerting back-room pressure on banks and other regulated financial institutions to terminate their relationships with payday lenders.”
In addition, the complaint explains, “The Defendant agencies’ actions were taken without observance of the procedures required by law, are arbitrary and capricious, exceed Defendants’ statutory authority, and deprive Plaintiffs of liberty interests without due process of law. These actions therefore must be set aside and permanently enjoined.”
“Operation Choke Point is a clear attempt by certain federal agencies to circumvent the law. The federal government simply cannot take regulatory action beyond what is allowed by statute, especially at the expense of legitimate businesses’ liberties and rights to due process. This unlawful regulatory campaign against lawful, responsible business enterprises sets a dangerous precedent for our country and must be stopped.” said Chuck Cooper of Cooper & Kirk, PLLC, and attorney for CFSA.
The full complaint containing the legal pleadings can be found online at http://bit.ly/CFSA_Complaint.
CFSA MEDIA CONTACT:
Amy Cantu, Communications Director