In a written testimony to the House Financial Service Oversight Subcommittee hearing on Tuesday, ICBA re-emphasized the alarm of community banks nationwide by the sweeping scope and aggressive tactics of Operation Choke Point. The testimony points out that community banks have dedicated significant energy and resources to comply with the Bank Secrecy Act and also are the best judge of their own reputational risk through proper screening of their customers. In the last two years, Choke Point has targeted more than 50 banks, including community banks, and payment processors with subpoenas issued under a very aggressive reading of its authority under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA).

In their respective testimonies, the Federal Deposit Insurance Corporation, Federal Reserve and Office of the Comptroller of the Currency representatives disavowed Operation Choke Point participation and categorized their efforts as being responsive to DOJ requests for information. Richard J. Osterman, Jr., the FDIC’s acting general counsel, stated that, "the FDIC does not and should not make business decisions for the banks that we supervise. Indeed, each bank must decide the persons and entities with which it wants to have a customer or business relationship.”

ICBA is grateful to House Financial Services Chairman Jeb Hensarling (R-Texas) for his May 22 letter to the bank regulators questioning their use of reputational risk in prudential supervision. Also, ICBA thanks Rep. Blaine Luetkemeyer (R-Mo.) for his leadership in addressing Choke Point by introducing The End Operation Choke Point Act of 2014 (H.R. 4986).