This article was published by The McAlvany Intelligence Advisor on Wednesday, August 16, 2017:

FDIC eagle seal in the main lobby of the headq...

Zombies are often depicted as mindless, unthinking henchmen operating under the spell of an evil magician. A lot of that defines Operation Choke Point, a mindless, unconstitutional apparition invoked by the evil intentions of the previous administration to shut down gun stores, payday loan companies, tobacco sellers, and the like. Each of these was determined to be “disreputable” dictated by the totalitarian worldview of and his henchmen.

Declared dead back in 2015, it lives. Back on January 29, 2015, the FDIC said it was dead:

The issued a Financial Institution Letter today encouraging supervised institutions to take a risk-based approach in assessing individual customer relationships, rather than declining to provide banking services to entire categories of customers without regard to the presented by an individual customer or the financial institution’s ability to manage the risk.

But regulators didn’t get the memo and continue to harass legitimate business owners seeking lines of credit and other financial services. Consider the following owners who ran into it before it was “terminated”:

Steve Stratford started his Secure Account Services company in Lake Havasu City, Nevada, in 2009. He awoke one day in the spring of 2013 to learn that both Chase Bank and Horizon Community Bank, with which he had been doing business, had suddenly closed his business accounts. When Stratford called Chase, he learned why: Chase had sent letters to “hundreds of companies in similar industries in obedience to directions from several federal agencies, including the Office of Comptroller of the Currency at the Department of the Treasury.” The banker told Stratford that if the bank didn’t “mitigate the risk” by terminating the offending businesses’ accounts, the bank would be subject to audit.


When Sandra Perry, the owner of Cash Express in Las Vegas, tried to open a branch in Mesquite, she couldn’t find a bank that wanted her business: “I was told that [my] money service business is too ‘high risk’ for the banks.”


Brian Brookman decided to open a pawn shop in late 2013 in Grand Haven, Michigan, and opened a business account with Chase Bank where he and his wife had personal accounts. Two weeks later they got a letter from Chase telling them they were closing that account. Said Brookman: “The only account they closed [was] my business account. It was strictly targeted at my business, and the only reason they would have targeted my business is because of Choke Point.”


Mark Cohen, the owner of Powderhorn Outfitters in Hyannis, Massachusetts, tried to get a new line of credit but he was rejected because he was involved in selling firearms. The bank manager told him: “I’m very sorry to say this – I’m very embarrassed – but the bank won’t lend you money because you sell guns.”

It worked, and continues to work, through intimidation. Alden Abbott of The  explained how the program works to choke off credit to the offending industries:

Banks receive notifications from federal regulators, including the Federal Deposit Insurance Corporation (the agency responsible for insuring deposits), that the government considers certain types of businesses [as] “high risk.” Banks then are pressured, through the implied of government investigations, to sever ties with customers engaged in those enterprises.

Five Representatives have discovered that the zombie lives and they are going to try to kill it again, this time for good. They fired off a letter last week to Attorney General Jeff Sessions, Fed Chair Janet Yellen, and Keith Noreika, the Acting U.S. Comptroller, demanding that they repudiate the administration’s successful and continuing efforts to financially strangle gun shops and other so-called “high-risk” and “disreputable” businesses.

They said:

While the FDIC [Federal Deposit Insurance Corporation, which implemented the program] rescinded its “High-Risk Merchant” list, it has never (a) retracted its general guidance about reputational posed by bank customers, or (b) retracted its assertion that the industries it had listed are particularly high-risk.


We are … informed that banks have continued to refuse to serve -abiding members of lawful industries on account of their purported poor reputations. [Emphasis added]


Accordingly, we 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 “reputational risk” guidance they developed and promulgated under Operation Choke Point’s auspices.

This is a request, mind you, not a demand: Please, Madame and Sirs, if you don’t mind, and if it doesn’t upset your schedule or get in the way of the much more important things you’re dealing with, would you please put together a plan “for remedial action” by August 31? After all, the Zombie lives: “the injury from Operation Choke Point is ongoing.”

That’s not how Zombies are killed. When it comes to government programs the only way is to starve them to death.

With the passage of time, one tends to forget the evil intentions of the administration. And one forgets, too, that programs like Operation Choke Point, once begun, remain alive even though they are declared dead.


What’s a Zombie?

The Daily SignalGOP Lawmakers Ask Jeff Sessions to End Operation Choke Point

GOP Senators’ letter

The Daily SignalMeet Four Business Owners Squeezed by Operation Choke Point

Report from the House Oversight Committee (Darrell Issa, Chairman) The Department of Justice’s “Operation Choke Point”: Illegally Choking Off Legitimate Businesses?

Background on Operation Choke Point

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