News

Reintroduced Operation Chokepoint bill gets props from CUNA

June 20, 2017

CUNA has sent a letter to Congress voicing support for a bill that would rein in Operation Chokepoint, a government initiative intended to allow banks to shut down accounts they believe could be linked to criminal activity.

Members of the ATM industry have alleged that the law causes harm to independent ATM operators who have had accounts closed without warning or justification.

Rep. Blaine Luetkemeyer, R-MO, reintroduced The Financial Institution Consumer Protection Act of 2017 (H.R. 2706) in the current session of Congress.

A previous iteration, H.R.766 - Financial Institution Customer Protection Act of 2016, was passed by the house, and sent to the Senate where it died in committee.

"Credit unions are committed to maintaining the ability to serve their members while strictly following all laws and governing regulations," CUNA President and CEO Jim Nussle wrote in the letter. "H.R. 2706 is a reasonable approach to preventing fraud and maintaining financial integrity without overreaching.

According to a CUNA report, H.R. 2706 would:

• limit federal banking regulators' ability to discourage or restrict depository institutions from entering into or maintaining a financial services relationship with specific customers unless certain criteria are met; and
• limit regulators' ability to pressure financial institutions to terminate customer accounts, requiring regulators to have a material reason for termination that is not based solely on the reputational risk posed by the customer.