These 7 Revealing Emails Show Federal Officials Scheming to Target Legal Businesses

[flowers]

http://dailysignal.com/2014/12/08/these-7-revealing-emails-show-federal-agencies-scheming-to-target-legal-businesses/

Senior officials at the Federal Deposit Insurance Corporation actively sought to crack down on legal businesses that the Obama administration – or the officials themselves – deemed morally objectionable, a new congressional report finds.

Released today by the House Oversight and Government Reform Committee, the  [20-page investigative report] details how the FDIC worked closely with the Justice Department to implement Operation Choke Point, a secretive program that seeks to cut off the financial lifeblood of payday lenders and other industries the administration doesn’t like.

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The FDIC is the primary agency responsible for regulating and auditing more than 4,500 U.S. banks.

Emails unearthed by investigators show regulatory officials scheming to influence banks’ decisions on who to do business with by labeling certain industries “reputational risks,” ensuring banks “get the message” about the businesses the regulators don’t like, and pressuring banks to cut credit or close those accounts, effectively driving enterprises out of business.

>>> See the Revealing Emails Below

The House panel’s investigation, led by Rep. Darrell Issa, R-Calif., and Rep. Jim Jordan, R-Ohio, cites confidential briefing documents that show senior Justice Department officials informing Attorney General Eric Holder that, as a consequence of Operation Choke Point, banks are “exiting” lines of business deemed “high risk’” by regulators.

“It’s appalling that our government is working around the law to vindictively attack businesses they find objectionable,” Issa, chairman of the Oversight Committee, said in a press release. Issa added:

    Internal FDIC documents confirm that Operation Choke Point is an extraordinary abuse of government power. In the most egregious cases, federal bureaucrats injected personal moral judgments into the regulatory process. Such practices are totally inconsistent with basic principles of good government, transparency and the rule of law.

Photo: Paul Hennessy/Polaris/Newscom

Attorney General Eric Holder (Photo: Paul Hennessy/Polaris/Newscom)

For example, email reveals FDIC employees opposing the payday lending industry on “personal grounds” and attempting to use their agency’s supervisory authority to drive the entire industry out of business.

[Oceander]

Just one remark:  the payday loan industry is rife with lenders and collectors who should be jailed for the tactics they use, including routinely threatening people with jail for defaulting on their payday loans and setting them up so that technically some of them are forced to break their state's bad check laws.

That doesn't justify what the FDIC is doing, but it does mean that payday lenders need to be seriously investigated and there may need to be some further federal regulation since many of these entities are virtual and operate across state lines so that no one state can really catch them and hold them accountable for their practices.

[olde north church]

Just one remark:  the payday loan industry is rife with lenders and collectors who should be jailed for the tactics they use, including routinely threatening people with jail for defaulting on their payday loans and setting them up so that technically some of them are forced to break their state's bad check laws.

That doesn't justify what the FDIC is doing, but it does mean that payday lenders need to be seriously investigated and there may need to be some further federal regulation since many of these entities are virtual and operate across state lines so that no one state can really catch them and hold them accountable for their practices.

It's not just paydays that are like that.  Rent to owns aren't much better.  "Buy Here, Pay Here" car dealers.  Basically, any business can target the slow of wit or empty of bank account.

[Oceander]

It's not just paydays that are like that.  Rent to owns aren't much better.  "Buy Here, Pay Here" car dealers.  Basically, any business can target the slow of wit or empty of bank account.

There is a line between the slow of wit and those who are bullied and lied to by businesses trying to get what they're not entitled to.  Regarding car dealers, there's a scam I've heard of called the yo-yo deal where the dealer gets non-binding "approval" for a loan to the car buyer, tells the buyer they've been approved and can close the deal, and then the dealer calls the buyer a few days/weeks later and says the finance company changed its mind and the buyer has to return the car or sign up for new financing at a significantly higher rate of interest.  Frequently these buyers traded a car in that is now long gone so the dealer has them over a barrel - either agree to the higher interest rate or lose your down payment and not have anything to drive.