Gains Made Against Operation Choke Point

Gains Made Against Operation Choke Point

Operation Choke Point, the federal government’s multiagency effort to cut off banking to merchants it deems unsavory or fraudulent, came to light in 2013. It has seen many legitimate high risk businesses fail, nearly fail and sputter due to the abandonment of their banks for fear of federal government backlash. For a second straight year, it was one of the chief discussion points of the Transact 15 conference and trade show in San Francisco.

Venable Presents Outstanding Whitepaper at Transact 15

A client alert by payment processor Venable, issued at Transact 15, gave an outstanding description and update on Operation Choke Point, detailing both the proponents and detractors views. It was initiated as a movement to examine the role of third party payment processors (TPPPs) — such as Instabill — in fraudulent businesses.

The federal government, however, has taken far more liberty. Rather than pursuing the fraudulent businesses, it is targeting the TPPPs that offer banking options despite proper underwriting.

Opposition Gaining Traction

Rep. Darrell Issa (R-CA) was the first to call out the federal government agencies behind Operation Choke Point in January 2014, questioning its original motive and calling it ‘abusive’ toward legal and legitimate businesses. Since, Rep. Issa’s claims have triggered a substantial opposition.

Several bills by many House members have been introduced to Congress, both to stop Operation Choke Point and to protect the industries — such as loan services, penny auctions and firearms sales to name a few — it is intent on ‘choking’ out. One of the bills was the End Operation Choke Point Act, submitted on June 16, 2014 by Rep. Blaine Luetkemeyer R-MO), which calls out the FDIC and Federal Credit Union Act for discourages banks and credit unions from offering payment processing services to legitimate businesses.

Other proposals include:

  • The Commerce, Justice, Science and Related Agencies Appropriations Act (2015)
  • The Financial Institution Customer Protection Act (2014, reintroduced in 2015)
  • The Firearms Manufacturers and Dealers Protection Act (2015 by Sen. Marco Rubio, R-FL)
  • The Firearms Manufacturers and Dealers Protection Act (2014 by Rep. David Schweikert, R-AZ)

Who is Against Operation Choke Point?

Rep. Issa is one of several members of the House of Representatives that believes Operation Choke Point is a form of abuse of power over industries the federal government deems unsavory. Other opponents include:

Rep. Bobby Rush (D-IL)

Rep. Steve Cohen (D-TN)

Sen. Saxby Chambliss (R-GA)

Sen. John Hardy Isakson (R-GA)

Rep. Frank Wold (R-VA)

Rep. Sean Duffy (R-WI)

Rep. Luetkemeyer (R-MO)

Sen. Marco Rubio (R-FL)

Rep. David Schweikert (R-AZ)

Sen. Michael Crapo (R-ID)

Instabill Supports High Risk Industries

Instabill has been a full-service payment processor since 2001, getting its start in the industries of adult and gambling. Operation Choke Point directly impacts out network of merchants, to which we feel an obligation to keep apprised with every development. To find out more about the many industries for which we provide merchant accounts, visit

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