The Federal Trade Commission’s Enforcement of Operation Chokepoint-Related Businesses

Subcommittee on Government Operations
Subcommittee on Government Operations
Subcommittee on National Security
Subcommittee on National Security
Hearing Date: July 26, 2018 10:00 am 2154 Rayburn HOB

PURPOSE:
  • To explore whether there may be links between Federal Trade Commission investigative targets and those pursued by Operation Chokepoint.
BACKGROUND:
  • The Federal Trade Commission (FTC) is charged with enforcing law prohibiting deception and unfair practices, while ensuring legitimate businesses are not impeded.
  • In 2012, the Financial Fraud Enforcement Task Force (FFETF) proposed an initiative called “Operation Chokepoint” to pressure financial institutions into cutting off disfavored businesses prone to fraudulent behaviors from the financial system. FTC was proposed as a partner agency on Operation Chokepoint.
  • In 2014, after a year-long investigation, the Committee found Operation Chokepoint forced banks to terminate relationships with a wide variety of entirely lawful and legitimate merchants. However, bank and financial service providers still perceive federal regulators as imposing unfair liability for the fraudulent activities of merchants.

Witnesses and testimonies

Name Title Organization Panel Document
Mr. Andrew Smith Director of the Bureau of Consumer Protection U.S. Federal Trade Commission Document
Mr. Jason Oxman Chief Executive Officer Electronic Transactions Associations Document
Ms. Lauren Saunders Associate Director National Consumer Law Center Document