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Published Wednesday, May 14, 2014

As printed in the Daily Caller:

Obama’s Operation Choke Point And The New American Legal System

Posted By Andrew Langer On 5:06 PM 05/13/2014 

Recently social media was ablaze with the news that adult entertainer, Teagan Presley, had received word from Chase Bank that they were closing her account.  Presley had just become the latest law-abiding citizen to be swept up in “Operation Choke Point,” an joint effort by the Departments of Justice, Treasury and a handful of other agencies to effectively shut-down industries that the federal government doesn’t like.  Here’s the catch – they have no legal authority to shutter them and most of the victims of this overreach are losing their banking relationships even though they’ve done nothing wrong.

Targeting the adult entertainment industry may have been a gross tactical error on the part of the federal government. Until now, Operation Choke Point had been focusing on easy targets: short-term lenders, check cashing businesses, and online ammunition sales. All of those are legal industries, but the attacks garnered little public attention and therefore even less sympathy. Not so when it comes to the adult entertainment industry.

Regardless of where you are on the ideological spectrum, Operation Choke Point should greatly disturb you. You may not like payday lenders, pornography, or guns and ammunition, but it should worry anyone that the power of the federal government could operate in a manner that circumvents due process and is exercised with almost no accountability.

Operation Choke Point works like this: the inter-agency group selects an industry target, let’s say, an at-home business that sells cosmetics. Agents working on Operation Choke Point then contact the financial institutions where these entrepreneurs both have their bank accounts and process their payments, informing them that the federal government considers this industry “risky” and potentially  “fraudulent.” The government then “encourages” these financial institutions to cease doing business with individuals within that industry, which are mostly independent small business owners. If the financial institution does not cease doing business with them, then the full weight of federal regulatory power (DOJ, Treasury, FDIC, CFPB) will be brought to bear on the bank or payment processor.

Not wanting to be buried under red tape, these financial institutions then close bank accounts and refuse to process credit card payments for the business even if no impropriety has ever been alleged by any agency or legal entity. The end result is that the flow of cash to and from these businesses is “choked off” and the business dies. Whole industries can be destroyed using this method.

This is the new American judicial system. No need for cumbersome new legislation or regulations. No need for a public debate on the merits, or an accounting of the impact of this operation through the normal regulatory processes. The federal government merely pushes a button and these businesses are destroyed.

This is especially troubling when the industries at issue have had their right to exist debated in both legislative and judicial arenas—and their rights have been upheld by the courts.

Whether it is the First Amendment and pornography or the Second Amendment and firearms and ammunition, Operation Choke Point circumvents the Constitution’s protections. But perhaps you don’t care about porn, guns, payday lenders, or any of the current targets of Operation Choke Point. In that case, what ought to be of deep and abiding concern is the lasting legacy — the precedent that creates a new reality for all of us.

If Operation Choke Point is allowed to grow unchallenged, then no industry is safe from an administration, Republican or Democrat, that has decided to support that industry’s destruction but doesn’t want to go to the trouble of the legal or legislative process.

So you may not like short-term lenders, but perhaps you are in favor of marijuana legalization. If Operation Choke Point stands, there is nothing to prevent the targeting of legal dispensaries and growing operations having their bank accounts canceled or payment processing shut down.

Should this extra-legal process go unabated, there is nothing that would prevent, for instance, the targeting of businesses that provide materials for home school education. There is no reason why an administration with this power would hesitate to use it to promote a particular ideology or special interests in the financial services or energy sectors. In fact, it’s already happening.

Liberty is derived from the diffusion of sovereign power — power that must be balanced and checked and limited. Operation Choke Point is vast and unbridled power, hurting real people and their ability to make a living. No matter where you stand, progressive or conservative, you should be deeply concerned about the legacy of Operation Choke Point, and should be calling for its cessation immediately.

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Published Monday, April 28, 2014
FOR IMMEDIATE RELEASE
April 28, 2014
Contact: media@instituteforliberty.org 

OBAMA TARGETS ADULT ENTERTAINMENT INDUSTRY
Operation Choke Point Continues To Expand, Gun Sellers Are Next
 
WASHINGTON, D.C.—The Institute for Liberty has released the following statement in response to reports from PerezHilton.com and TMZ that Chase Bank is severing ties with its customers in the adult entertainment industry. 
 
“Operation Choke Point,” the President’s infamous program which seeks to cut off legal industries and law-abiding businesses from their financial institutions had previously identified adult-entertainment as a target along with gun sellers and short-term lenders.  Banks across the nation have already severed relationships with thousands of customers because of Operation Choke Point:
 
“In President Obama’s America, it just doesn’t matter whether you’ve done anything illegal.  It doesn’t matter if your industry operates within the confines of the law. You can still be in the crosshairs of the Federal government. This report confirms what we’ve suspected for some time, that Operation Choke Point would expand to destroy the other industries on the President’s infamous hit list. 
 
This abuse of power and these intimidation tactics fly in the face of the free market and free society. Yesterday it was check-cashers and today it’s the adult entertainment industry.  We know where they are going next because they’ve told us -- direct sales businesses, gun and ammunition sellers, the gaming industry and charities. It’s becoming clear that no industry is safe from this administration’s mob-style approach to regulation.”
 
IFL is an aggressive defender of the rights of individuals to pursue the American dream. They inject the perspective of small businesses, and the working families that depend on them, into the public policy debate. For more, please visit: instituteforliberty.org

 

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Published Tuesday, April 8, 2014


WASHINGTON, D.C. -- Today, the House Financial Services Committee held an oversight hearing regarding the operations of the Consumer Financial Protection Bureau (CFPB).  Despite their promises of transparency, the CFPB was once again reluctant to be forthcoming and clear with answers to questions from both Democratic and Republican lawmakers.  On issues related to criteria used to target investigations of financial businesses, inappropriate pressures being brought to bear on banks, and the unprecedented action of paying for audience members to attend CFPB hearings in order to speak in support of CFPB policies, panelists were unwilling to provide in-depth answers to congressional questions.

Andrew Langer, President of the Institute for Liberty, an organization active on issues related to the CFPB, said the following:


“This hearing added nothing to the attempt to shed some light on the opaque operations of a hugely powerful regulatory agency, except to make it clearer than ever that this is an agency fundamentally out of control.  Oversight only works when agencies are forthcoming and cooperative.  CFPB was anything but.  They’re not fooling anyone, though. More and more people are becoming aware of the mess of the CFPB.”

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Published Wednesday, April 2, 2014

Watchdog Group Slams CFPB for Having a Socialist Party Leader on Influential Advisory Board

 

WASHINGTON, D.C.— Institute for Liberty President Andrew Langer released the following statement today slamming the Consumer Financial Protection Bureau (CFPB) after The Washington Times revealed that the former vice presidential candidate of the Socialist Party of the United States is on one of its critical advisory boards. 

                                                   

“Every American should be disturbed about today’s revelation that the former vice presidential candidate of the Socialist Party of the United States has been given an influential role as a senior advisor to the Consumer Financial Protection Bureau.  This speaks volumes about the true motives and objectives of an agency which has already come under fire for trying to limit free speech, collecting personal data on consumers, and using taxpayer money to plant supporters in front of the media to surreptitiously promote pro-CFPB propaganda.  The Bureau, which operates without Congressional oversight and largely in secret, is apparently becoming a den of leftist political operatives and advisors whose objective is to interfere with the free market and our Constitutional freedoms.

 

Fundamentally, the philosophical perspective of socialism should be nowhere near any agency that has massive regulatory authority over the financial services industry, other businesses and massive segments of our economy. The idea that someone who does not believe in market economics would play any kind of a role in advising an Agency that is part of the Federal Reserve, demonstrates that the CFPB is America’s most dangerous, out-of-control and unaccountable federal agency. Congressional action must be taken now to rein in this agency and expose its agenda.”

 

IFL is an aggressive defender of the rights of individuals to pursue the American dream. They inject the perspective of small businesses, and the working families that depend on them, into the public policy debate. For more, please visit: www.instituteforliberty.org.

 

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Published Tuesday, April 1, 2014
Institute for Liberty Calls Democrats’ Attempt To
Cancel CFPB Oversight Hearing “Shameful”

 
“Oversight only works when Congress is Actually Able to Hear Testimony
on Agency Operations”
 
Washington, D.C. — Institute for Liberty (IFL) President Andrew Langer released the following statement today in response to Democrat members of the House Committee on Financial Services’ request that the oversight hearing regarding allegations of discrimination at the Consumer Financial Services Bureau (CFPB) be canceled:
 
“It is highly unsurprising, but no less shameful, that Democrats on the House Financial Services Committee want to see Wednesday’s hearing on allegations of discrimination at the CFPB canceled.  House Democrats have been singularly unwilling to hold this administration accountable for the myriad abuses of power that its CFPB personnel have committed –- all while CFPB personnel are collecting record high salaries from the American taxpayer. 
 
The CFPB, an agency with enormous — and largely unaccountable — power is one of the most politicized federal agencies, which is all the more reason why abusive, retaliatory, and discriminatory practices must be thoroughly investigated.  The fact that House Democrats want to sweep these allegations under the rug should give any American pause. Oversight only works when Congress is actually able to hear testimony on an agency’s operations.”
 
IFL is an aggressive defender of the rights of individuals to pursue the American dream. They inject the perspective of small businesses, and the working families that depend on them, into the public policy debate. For more, please visit: instituteforliberty.org.  
 
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Watchdog Group Outraged at CFPB Audience Fraud

Agency Paid for Pro-CFPB Audience Member at Field Hearing 

 

WASHINGTON, D.C.— Institute for Liberty President Andrew Langer released the following statement today slamming the Consumer Financial Protection Bureau (CFPB) after it was revealed the secretive government agency paid for a pro-CFPB speaker at a field hearing. 

 

“Operatives within the agency, many of whom have close ties to both President Obama and Senator Elizabeth Warren, violated agency policy by planting the speaker to give media the impression of consumer support for its efforts. This revelation comes on the heels of yesterday’s controversy over Democrat Senators attempting to prevent CFPB whistleblowers from testifying about other abuses at the agency.

 

After two-decades standing up against abuses of power by the federal government, I didn’t think I could be shocked by the coordinated actions of an agency to manipulate the press and public opinion.  This one-two punch of paying for audience members and attempting to squash the testimony of whistleblowers are just two examples of a disturbing pattern of behavior for a powerful agency with virtually no oversight.

 

Last week, I testified at the CFPB’s field hearing in Nashville, voicing my concern for their double-talk on regulation and unwarranted interference with consumer choice and the free market. While few folks in attendance stood in favor of the CFPB’s power grab, one is now left to wonder if any of the audience members who voiced pro-CFPB opinions were paid to attend. 

 

Congress must work to pierce the veil of this secretive agency, which will clearly stop at nothing to protect the ideology and agenda of a highly politicized agency bent on eroding Americans’ Constitutional freedoms.”

 

IFL is an aggressive defender of the rights of individuals to pursue the American dream. They inject the perspective of small businesses, and the working families that depend on them, into the public policy debate. For more, please visit: www.instituteforliberty.org.

 

 

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Published Monday, March 31, 2014

Last Tuesday, IFL President Andrew Langer testified at the CFPB hearing in Nashville.

Listen to his statement here!

 

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Published Tuesday, March 25, 2014
FOR IMMEDIATE RELEASE
March 25, 2014
Contact: media@instituteforliberty.org

Institute for Liberty Calls out CFPB Director Cordray

 
Washington, D.C. – The following statement was prepared for delivery today by Institute for Liberty (IFL) President Andrew Langer at the Consumer Financial Protection Bureau (CFPB) field hearing in Nashville, TN:
 

"CFPB Director Richard Cordray and Members of the Panel:
 
Thank you for the opportunity to speak today.  My name is Andrew Langer, and I am President of the Institute for Liberty, a non-profit advocacy organization based in Washington, D.C.  We focus on executive branch regulatory policy, and the impact of the regulatory state on business in America.

I have to say, I am deeply concerned with Director Cordray’s remarks.  Not so much for what you said, Director, but by what you didn’t say.  For instance, I take issue with what you and other panelists have said, raising concerns about the potential interest payments on so-called 'payday loans.'  This is misleading—since such situations aren't limited to payday loans.  A family that takes out a 30 year $100,000 mortgage at a 4% APR will ultimately pay nearly $200,000 in interest over time.  This is not a public policy problem, however, and it should not be. The assessment of the riskiness of a loan is something that only a marketplace can really determine. The riskier the loan, the higher the terms. We cannot and should not be creating policies to eliminate risk.
 
But were your remarks to be taken at face value, one would think that this Administration were merely interested in fixing problems existing in the short-term, small-value, high-risk loan industry.  But what you failed to mention is the ongoing effort by this Administration to essentially destroy this industry through efforts like Operation Choke Point, whose literal goal is to 'choke off' the access to capital and payments necessary for this industrya thriving and vital sector of the economy—to survive.

The idea that this Administration wants to destroy this free market private industry, replacing it with a combination of postal lending (yes, your local post office would become your neighborhood lender) and community activist lending institutions should raise serious concerns.  Right now, businesses are footing the bill for their losses.  The Administration wants to put American taxpayers on the hook for what could potentially be billions of dollars in defaults.  This is an incredibly bad idea. Essentially, we're looking at a 19th century institution to solve a 21st Century problem; this defies common sense."



IFL is an aggressive defender of the rights of individuals to pursue the American dream. They inject the perspective of small businesses, and the working families that depend on them, into the public policy debate. For more, please visit: instituteforliberty.org.  
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Published Monday, March 24, 2014
FOR IMMEDIATE RELEASE
March 24, 2014
Contact: media@instituteforliberty.org

IFL President Andrew Langer Calls
Obama’s Operation Choke Point a "Thugocracy" Tactic

 
Washington, D.C. – The following is a statement from Institute for Liberty President Andrew Langer:
 
“The Guardian ran an Op-Ed yesterday written by Salon.com’s David Dayen, which was laden with false premises, and posits a discredited narrative that so-called 'payday lenders' represent some sort of market failure -- a market failure requiring massive government intervention in the marketplace.  No such failure exists, certainly not one requiring the total-destruction of an entire industry in the financial services sector using heavy-handed 'thugocracy' tactics. That's precisely what Operation Choke Point is: the government, acting as thugs, to do indirectly what it cannot do directly.
 
Progressives have always worked hard to attempt to ameliorate risks in a marketplace.  This goes hand-in-hand with their efforts to guarantee equality of outcomes in most other areas (wages, education, etc.).  But when the left tinkers in marketplaces in order to do what market forces warn not to, disaster ensues.  This is the same kind of policymaking that led to the rise of the housing bubble and its eventual collapse: well-intentioned policymakers wanted people with risky credit to buy homes, so they pressured mortgage companies into giving them loans by 'scoring' them on the number of risky loans they gave. 
 
The result was calamity -- and our economy is still struggling to improve.
 
Attempting to transfer the liability of low-dollar, high-risk loans from viable businesses to the American taxpayer is like deja vu all over again.  Worse, the idea of giving this responsibility to the U.S. Postal Service takes their collective eyes off of their primary (and constitutionally-mandated) responsibility.  Any time you take an agency's focus away from its core responsibility, it is bad public policy.”

IFL is an aggressive defender of the rights of individuals to pursue the American dream. They inject the perspective of small businesses, and the working families that depend on them, into the public policy debate. For more, please visit: instituteforliberty.org.  
 

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