Tag: operation choke point


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


Bank Accounts for Payday Loan Lenders

Payday loan lenders and micro-lenders continue to suffer from “bank discontinuance” issues as a result of “Operation Choke Point” launched by the Obama administration in August 2013.

The Community Financial Services Association of America (CFSA) and Advance America said ” a preliminary injunction was needed to end the back-room campaign of coercion by the Federal Reserve, the Federal Deposit Insurance Corp, the Office of the Comptroller of the Currency, the CFPB [ruled unconstitutional by a D.C. Court]  and competitors masking themselves as so-called consumer protectionists.”

U.S. regulators are collaborating in an attempt to stop banks from offering banking services to micro-lenders in an effort to force consumers in need of emergency funding to beg, borrrow or steal when facing financial stress.

Nearly 50% of U.S. residents are unable to access $400 cash [Link to Federal Report] when faced with the need to fix their car to continue working, purchase a medical prescription for their child or a family member, turn on their heating or electricity…

Payday lenders, istallment lenders and additional small dollar lenders requested a federal judge for immediate relief! 

Jer Ayles-Ayler Trihouse Consulting

Jer TrihouseConsulting

The survival of mom and pop loan businesses is at stake!

It’s rumored that the big, multi-billion dollar online Fintech lending companies – SOFI, Lending Club, Prosper, Marcus, Avant, Enova… are adding additional pressure to wipe-out the small dollar lending industry; including the small independent store owners.

Advance America said its own situation became dire after five banks decided in the last month to cut ties, including a 14-year relationship with U.S. Bancorp, “putting it on the verge of being unable to maintain a bank account.”

The small lender national association injunction requests the federal court to “order the agencies to cease and desist from harming the reputations of Advance America and other CFSA members; from applying pressure on banks, encouraging them to terminate relationships with the banks and other CFSA members; denying CFSA members access to financial services; and from depriving members ability to pursue business.”

Instead of eliminating the “bad apples” of the payday industry, the agencies have “set about to choke off the life-sustaining financial oxygen that the entire industry, and millions of under-banked individuals, depend on.”

The CEO for CFSA, Dennis Shaul, stated that the results of Operation Choke Point for the payday loan, installment loan and micro-lending industry has been “dire.”

Mr. Shaul says that U.S. Bank has dropped its affiliation with several members, including Advance America, allegedly putting the company “on the verge” of being unable to maintain a bank account.

Another example by CFSA is thata smaller payday lender, DollarSmart Money Centers,  was forced to close when it lost all its banking services.

Here’s a link to the Injunction by the CFSA vs. the FDIC

Here’s a link to the Original Request

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Operation Choke Point, Payday Loans, Senator Cruz

Operation Choke Point

Payday loans, guns…

Senator Cruz takes “big Brother” to task! This is beautiful.

AG Nominee Stuart Delery is a weasel… Sen. Cruz Questions  AG Nominee Stuart Delery on Operation Choke Point.


Operation Choke Point Payday Lenders

Operation Choke Point Payday Lenders

Like Newt Gingrich or not, his assessment regarding the FED’s ability to make it impossible for legal industries to operate is accurate. “Operation Choke Point” has driven several of my clients to pay “finder’s fees” of as much as $45,000 to anyone able to introduce a willing bank or credit union to provide a basic depository account for payday loan, MSB, check cashers and car title loan lenders. These are legal, licensed businesses forced to pay “bribes” for a bank account. And, don’t jump to the conclusion that these “purchased” bank accounts are for abusing borrowers. I’m talking about simple depository accounts enabling a state/tribe licensed payday lender to pay their bills; payroll, vendors, rent, LMS providers…

Sure, you the reader are probably saying, “Good riddance!” But the FED’s are choosing the winners and losers. Today, they’ve chosen gun shops, small dollar credit lenders, collection companies… Tomorrow, it will likely be your industry, your job and your customer who will have their ability to bank “choked-off.”We offer 2 methods to invest in our “How to Start a Car Title Loan Business:”

Immediate download in Adobe Acrobat or choose our printed version. 3-Ring Binder, 8 1/2 X 11, 400+ pages, illustrated. NOTE: If you invest in the printed version, we will email a digital version immediately.

How to Start a Payday Loan Business

Start a Payday Loan Biz

For start-ups, hedge funds, investors, vendors, suppliers, legal counsel, media coverage, consumer advocates… anyone in need of, not only a discussion of Internet & brick-n-mortar licensing models, ACH, Internet & offline marketing, collections, software… but additionally a MACRO discussion of the AFS (Alternative Financial Services) industry.


Examples: Damage by Operation Choke Point to Payday Lenders

“I will offer a few examples of the damage that Operation Choke Point has already done to the short-term credit industry. One lender, Advance America, has lost longstanding and positive business relationships with at least nine banks as a result of Operation Choke Point. Hancock Bank and Whitney Bank informed Advance America of their intention to close its accounts on the ground that they were “unable to effectively manage [the lenders’] Account(s) on a level consistent with the heightened scrutiny required by [their] regulators . . . .” Fifth Third Bank wrote that it would stop doing business with short-term credit providers altogether on the ground that the entire industry is “outside of [its] risk tolerance.” Synovus Bank and Umpqua Bank likewise terminated Advance America’s accounts. At least two of Advance America’s banks expressed regret and explained that the service terminations were the result of pressure from their prudential regulator. Cadence Bank also terminated Advance America’s accounts without explanation. Advance America has not been able to find local banks to service certain stores that were affected by the terminations; many of the banks it contacted for that purpose had decided to exit the short-term small-dollar industry entirely due to regulatory pressure. No bank expressed a concern about Advance America; every bank based its determination on a sweeping judgment of the industry as a whole, an irrational judgment they were compelled to make by their regulator.”

“Another CFSA member, Cash Tyme, has received termination notices for its accounts at Continue Reading..