Operation Choke Point: FDIC Surrenders to Payday & Small Dollar Loan Industry

Great news for “the business of lending to the masses!” Thanks to the heavyweights in our industry, Advance America and Check Into Cash, consumers continue to win. Consumer access to a multitude of choices when dealing with temporary financial setbacks prevails.

“We uncovered how some FDIC leaders and officials executed a campaign motivated by personal scorn for our industry, contempt for our millions of customers, and blatant disregard for due process. This settlement will help to prevent this disenfranchisement from happening again – to our business or any other legal, regulated business.” Chief Legal Officer Jessica Rustin, Advance America.

It took 5 years but “Operation Choke Point” has been dealt a SEVERE blow. 

Consumers, lenders, and vendors all owe a HUGE thank you to these companies and those of you who support the industry associations and participated on this long, arduous, expensive journey!

SPARTANBURG, S.C.PRNewswire/ — Advance America and Check Into Cash announced today that they have reached a settlement with the Federal Deposit Insurance Corporation (FDIC) regarding Operation Choke Point, the FDIC program that pressured banks to cut ties with certain categories of lawful businesses, including payday lenders.

“Five years after taking the extreme and costly step of suing federal regulators, we are pleased with the FDIC’s actions to address past efforts to cut off our companies’ access to the U.S. banking system,” said Jessica Rustin, Advance America’s Chief Legal Officer. “We uncovered how some FDIC leaders and officials executed a campaign motivated by personal scorn for our industry, contempt for our millions of customers, and blatant disregard for due process. This settlement will help to prevent this disenfranchisement from happening again – to our business or any other legal, regulated business.”

As a result of this settlement agreement, the FDIC will issue a statement to reiterate its policies. The FDIC previously acknowledged that certain employees acted in a manner inconsistent with FDIC policies and existing guidance with respect to payday lenders, creating misperceptions about its policies. These attempts have proven ineffective in resolving the issue.

The steps taken as part of this settlement are consistent with statements made by FDIC Chair Jelena McWilliams, who declared in a letter to members of Congress earlier this year that “[r]egulatory threats, undue pressure, coercion, and intimidation designed to restrict access to financial services for lawful businesses have no place at this agency.”

“While the FDIC took steps to reinforce its policies with staff and the industry, the effects of Operation Choke Point linger, with banks continuing to terminate accounts and refuse services to payday lenders,” said Greg Madson, Chief Legal Officer at Check Into Cash. “It is our hope that this settlement clarifies once and for all the FDIC’s policies so that banks feel free to provide services to lawful businesses operating in compliance with applicable federal and state laws, without fear of regulatory pressure or retribution.”

The FDIC will conduct training of its examination workforce on these policies by the end of 2019 to ensure that its examiners adhere to the highest standards of conduct and respect the rule of law. The training will specifically include matters related to Operation Choke Point.

Lastly, the FDIC has established a robust complaint process through which information regarding potential violations of these policies may be investigated. If banks or customers continue to be concerned that FDIC personnel are not following the FDIC’s policies regarding Operation Chokepoint, they may email the FDIC at

In June 2014, the Community Financial Services Association of America (CFSA), the national association for small-dollar lenders, joined industry partners and its largest member companies, Advance America and Check Into Cash, to file the lawsuit, Advance America et al. v. Federal Deposit Insurance Corp. et al., to end Operation Choke Point and the government’s persistent regulatory overreach. Discovery exposing depositions and damaging emails of government officials, most notably at the FDIC, was released in October 2018 as part of the Plaintiffs’ Motion for Summary Judgment in the lawsuit. The settlement is the result of court-ordered mediation prior to a judge’s ruling on summary judgment.

“Certain FDIC officials operated well outside of the rule of law and disregarded due process when they targeted lawful businesses under Operation Choke Point,” said Dennis Shaul, CEO of the Community Financial Services Association of America (CFSA). “Regulatory policy must never be predicated on personal preferences and this settlement should make clear that such abuses of power will not be tolerated.”

About Advance America Cash Advance 
Founded in 1997, Advance America, Cash Advance Centers, Inc. is the country’s leading provider of non-bank cash advance services, with approximately 1,900 centers across the country. The Company is a founding member of the Community Financial Services Association of America (CFSA), whose mission is to promote laws that provide substantive consumer protections and to encourage responsible industry practices. Please visit for more information.

About Check Into Cash 
Founded in Cleveland, Tennessee in 1993 by entrepreneur and philanthropist Allan Jones, the Check Into Cash brand is a state licensed and regulated small balance lender. Check Into Cash stores offer check cashing, Western Union® money transfers, prepaid U.S. Money Cards, and other convenient services as a complete One Stop Money Shop®.

Check Into Cash is a founding member of the Community Financial Services Association of America (CFSA), the trade association representing the nation’s payday lenders. The CFSA advocates for best practices and helps enact legislation that balances the needs of the consumer with the interests of the industry.


Operation Choke Point: The Saga Continues & Dept. Heads at Dept. of Justice, FDIC & OCC SHOULD Roll!

This in from American Banker:

By: Dennis Shaul CFSA

“The small-dollar lending industry has long known that government bureaucrats with a partisan agenda were determined to bring the industry to its knees, but this illegal campaign went farther than anyone could have imagined — with those at the very highest levels of the Department of Justice, FDIC and Office of the Comptroller of the Currency targeting customers of regulated banks based on their personal bias.”

“Government officials abused their power to press forward with their own ideological agenda. Then, faced with a demand for accountability, they denied wrongdoing and sought to cover up their misdeeds. This is not a small-dollar lending story; this is a story of government agencies debasing their missions through the abuse of power.”

“Fortunately, the Community Financial Services Association, which I run, could afford the cost of a lawsuit and seek redress in the courts. CFSA was an original party to the lawsuit brought against the government and we participated in the preparation leading up to its filing in 2014. Our reasons for pursing a legal challenge to the actions of the FDIC and OCC were simple. First, we were seeking justice for our members who were harmed. Second, we were convinced there was a deliberate pattern of terminations of banking relationships that we wanted to bring to light. Third, if there was indeed a pattern, we’d be rendering a genuine public service by establishing the principle that no agency or group of people within an agency should be allowed to abuse their authority by exercising it in an unlawful or prejudicial manner. “

Here’s a link to the Full American Banker opinion piece by Dennis Shaul: Original


Operation Choke Point: Court Orders FDIC to Turn Over Docs to Payday Loan Industry Assoc.

FDIC Ordered to Turn Over Documents in Operation Choke Point Lawsuit to PDL Industry Assoc.

‘Time for DOJ and FDIC officials to get a lawyer!’

The Federal Deposit Insurance Corporation (FDIC) was ordered to turn over documents related to Operation Choke Point late last week.

District Court Judge Gladys Kessler told the government agency it had to begin working with the plaintiffs in the case for a nine-month discovery period beginning on June 20, 2017. “There is no justification whatsoever for not granting Plaintiffs’ Motion to Commence Discovery Immediately,” Judge Kessler said in her order.

Payday Loan Industry – The order comes after the Community Financial Services Association of America (CFSA) and a group of financial services companies filed suit against the FDIC over their conduct during Operation Choke Point. Under that operation banks were allegedly pressured into cutting ties with industries the Obama-era agency viewed unfavorably. Payday and other short-term lenders as well as those involved in the firearms industry said they were specifically targeted under the program.

The firearms industry has been particularly vocal in its opposition to Operation Choke Point. The National Rifle Association and other gun-rights groups have called the operation an attack on the industry.

Stupid things payday lenders do“‘Operation Choke Point’ is an Obama Administration initiative that encourages federal financial services regulators to harass and intimidate banks and financial institutions that work with firearm and ammunition retailers,” the National Rifle Association said in February 2016. “By leaning on the banks, regulators hoped to bring an end to those relationships thereby choking off their cash flow and forcing them out of business. A 2015 Congressional Investigation revealed that ammunition and firearm sales and dealers had, in fact, been targeted.”

CFSA said they were happy with the court’s order and believe the documents they will receive during discovery will shed light on whether the FDIC forced banks to deny certain businesses their services and, if so, how they chose which industries to target.

“We are thrilled by the Court’s order to enter the discovery phase, as this illegal federal program has been unduly harming legal entities for years,” Dennis Shaul, CEO of CFSA, told the Washington Free Beacon. “This court order allowing discovery will now finally enable the plaintiffs to access records of the federal government’s behind-the-scenes and secretive campaign to force banks to terminate their relationships with lawful American businesses. It is high time that the government’s unlawful and unjust crusade against lawful and licensed businesses be stopped. The federal regulators leading Operation Choke Point have threatened and pressured banks in the shadows of the law for far too long.

“The government defendants are well aware they have been on the wrong side of history for years and will stop at nothing to hide the extent of their illegal campaign. The Court’s ruling will allow these shady and criminal actions to be brought to the light of day.”

“The decision to grant discovery is probably the most important victory in the entire case, likely more important than the final judgment.”

Read this Report in FULL here:


Check Cashing Store Opportunity Available: Philadelphia, PA.


Well established for decades. Licensed by the State of Pennsylvania Banking Department.  Owner is retiring and wants to sell. [A “Baby Boomer…”

Check cashing breakout

  • Payroll 60% (average fee 1.5%)
  • Government/tax refunds 20% (fee 2%)
  • Attorney checks/settlement 10% (fee 2%)
  • Commercial check cashing 10% (fee 1.5%)  big room to grow here.
  • Gross sales: 2018
  • Check cashing 12.3 million
  • Bill payments 2.7 million
  • Wire transfer $925,000
  • Money Orders 3.5 million
  • Debit cards $106,000
  • Store grosses approximately $150,000 per year
  • The building is owned by the seller. A long-term lease is available! [The location also has a basement if needed to store the piles of cash you make!]
  • Note to my astute readers: “Operation Chokepoint,” MSB licensing and banking not an issue for the buyer.

Services currently offered:

  • Check cashing
  • Western Union wire transfer
  • Western Union money orders
  • Bill pay via check free pay
  • Nexis prepaid debit
  • Lotto
  • EBT
  • ATM (lease, they pay per transaction)

Want to explore this “Buy then Build” opportunity?


Biggest Payday Loan Game Changer? Bet You Can’t Guess!

Nope! It’s not compliance, regulation or the CFPB. You’ve seen this coming since the day you got into this game. Game changing rules are a fact of life as a money lender.

Wrong! It’s not John Oliver’s Last Week Tonight Show laugh your ass off satire on the payday loan industry. Even John had to admit that nearly 50% of your customers are happy you’re here.

Nah! It’s not the 1200%+ APR’s you charge your borrowers.  Even the CRL admits behind closed doors that money cannot be loaned at 36% unless it’s subsidized by tax payers.

Zilch again! It’s not the ACH debacle that sent you scurrying for Rolaids last October.

Uh-uh. It’s not the loss of your bank account, stored value cards, kiosks, “Operation Choke Point” or any of the other arrows, bullets, grenades and drones you’re having nightmares about.

Give up? Ok, before I tip my hand, think about the problem you’re trying to solve. Think about the pain your customer is experiencing daily. Your customer wants access to money fast and easy. No hoops to jump through. No “financial education” course. She wants minimal paperwork and hassle.

Your customer wants, needs and is literally begging for small dollar credit NOW!

Smart lenders focus on reducing the “friction.”

Borrower behavior has changed. The 1% can regulate a LOT of things but they can’t successfully regulate consumer behavior. Eventually, regulators have to recognize and embrace reality or risk revolution. Think marijuana, alcohol, drugs, prostitution, money lending…

Google, Amazon, Uber, and  iTunes  changed the way consumers behave.

The phone is the HUB!

A generational shift is occurring now.  The phone is the HUB! Smart phones reduce the “friction” in financial services. The Kindle changed the way people buy books. Smart phones are changing the way consumers borrow money.

You need an example? Here’s a simple one:

Another example:

  • Whip out your phone. Open your web browser and type in “” Take a CLOSE look at the website.
  • Now, use your desktop, laptop or iPad and repeat this step; . See the difference? It’s MAJOR!

Both and recognize the device used to visit their website. It’s automatic.

The difference is immediate! Using their phone, a borrower can simply click a button and apply for a loan, get directions, send a text or email message, make an appointment or share the website with friends and family members in need.

The SMART PHONE is the REAL game changer in the Small Dollar Credit (SDC) space! The rest is all noise.

Your task is to reduce the “friction” in lending. Figure this out and you can earn a higher ROI lending money than in any other industry AND survive the slings and arrows headed your direction.

How does your business “look” on YOUR customer’s phone?

Here’s an inexpensive solution: