NACHA Government Relations Update - Aug. 24, 2017

Posted August, 22 2017

Justice Department to end “Operation Choke Point”
The Justice Department has stated it will discontinue the controversial "Operation Choke Point" program, which discouraged financial institutions from serving a range of businesses thought to be at higher risk for fraud and money laundering. While some, like Karl Frisch, executive director of Allied Progress, saw the program as “incredibly effective at cracking down on the flow of money to fraudulent merchants that violate the law and target vulnerable consumers”, Republicans in Congress have been arguing that the program was hurting legitimate businesses. In a letter to House Judiciary Chairman Bob Goodlatte, Assistant Attorney General Stephen Boyd stated “All of the Department’s bank investigations conducted as part of Operation Chokepoint are now over, the initiative is no longer in effect, and it will not be undertaken again.”
CFPB Launches Online Form for Submitting Regulatory Inquiries
The Consumer Financial Protection Bureau (CFPB) has updated how industry and other stakeholders may submit regulatory inquiries. The Office of Regulations recently launched an online form ( on the CFPB website which replaces the email address (CFPB_RegInquiries it had previously been using to collect inquiries.
Committee Leaders Request that Agencies Repudiate Operation Choke Point
On Aug. 10, 2017, House Financial Services Committee Chairman Jeb Hensarling (R-TX), House Judiciary Chairman Bob Goodlatte (R-Va.), Regulatory Reform, Commercial and Antitrust Law Subcommittee Chairman Tom Marino (R-Pa.), Financial Institutions and Consumer Credit Subcommittee Chairman Blaine Luetkemeyer (R-Mo.), and Courts, Intellectual Property & the Internet Subcommittee Chairman Darrell Issa (R-Ca.) issued a letter to Attorney General Jeff Sessions, Federal Reserve Board Chair Janet Yellen, and Acting Comptroller Keith Noreika, asking that the Department of Justice, Federal Reserve Board and the Comptroller of the Currency officially issue statements repudiating Operation Choke Point. 

In part, the letter states: “[w]e request that your respective Departments and agencies issue clear and public formal policy statements repudiating Operation Choke Point and the abuses by financial regulators of the ‘reputation risk’ guidance they developed and promulgated under Operation Choke Point’s auspices. Financial institutions should be given explicit assurance that they may serve these unfairly targeted industries just like any other legitimate businesses. Institutions should also be encouraged to restore long-standing relationships with lawful, targeted industries.”
Federal Reserve Board Issues Guidelines to Evaluate Joint Account Requests at Federal Reserve Banks
On Aug. 9, 2017, The Federal Reserve Board issued final guidelines which will be used for evaluating future joint account requests at Federal Reserve Banks. The guidelines, which are intended to provide consistency and transparency, will be made effective upon their publication in the Federal Register. While the guidelines outline broad considerations for the evaluation process, individual joint account requests will be considered on a case-by-case basis with more specifics and information required based upon the details of each particular request.
Click here to view the Board's Federal Register notice.

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