Financial tracheotomy

"Operation Choke Point" is an FDIC program that identifies certain industries as "high risk" for banks. I'm not sure of the details, but the claim is that it has influenced a lot of banks to cut off customers in the gun or ammunition sale business.  The program is supposed to have something to do with fraud, but the customers complaining of being cut off don't appear to have been accused of fraud, only of being in the gun-and-ammo business.  They're losing access to things like credit-card processing and PayPal.

The first thing this makes me think of is the crying need for alternative banking providers to spring up, so I was pretty happy to read that new companies, such as one called Payment Alliance, are stepping into the breach.  That's why it's nice to have lots of private institutions competing with federal ones, or even ones that have drifted into accepting too much federal control in return for goodies like FDIC insurance.

In other good news, the new Congress may be taking steps to get the regulators under control, too.  So hurray for elections.


Dad29 said...

Another piece of this puzzle is the Dodd-Frank Act's "Consumer Protection" bunch--which is separate from FDIC but also governs banks.

The 'gun-shop' angle MAY have to do with pawn-broker/gun dealers where the pawn biz is "regulated" by "Consumer protection"


E Hines said...

No, it's just a naked attempt to slide gun control past the courts.

Eric Hines

jaed said...

That's certainly part of it, but gun dealers aren't the only businesses targeted by Operation Choke Point.