Swordsmyth
10-22-2018, 04:23 PM
New court filings document the extent to which the Obama administration used government power to target disfavored industries, and subsequently sought to avoid responsibility for its targeting program.
The new information comes from a motion for summary judgement filed in federal court by the plaintiffs in Advance America et al. v. Federal Deposit Insurance Corp. et al.
Advance America, a payday lender, was one of the firms targeted by Operation Choke Point. The company contends—and the documents it filed show—that the FDIC was consciously working to target a totally legal industry, and also at a number of points to deny its involvement in the same work.
Choke Point was an initiative under which the Obama administration tried to shut down (https://www.washingtonpost.com/news/volokh-conspiracy/wp/2014/05/24/operation-choke-point/?utm_term=.81ace660b0b1) disfavored industries by removing their access to payment processing and other banking services, thereby cutting off their financial "oxygen." They did so by applying pressure to third-party banks through the FDIC and other federal financial regulators. Targeted businesses were almost all entirely legal, and included ammunition sales, online gambling, and payday loans.
The FDIC has repeatedly denied that it specifically targeted payday lenders. FDIC chairman Martin Gruenberg told Congress (https://financialservices.house.gov/uploadedfiles/hhrg-114-ba09-wstate-mgruenberg-20150324.pdf) in written testimony that targeting payday lenders was "not consistent with our policy," and claimed that the corporation had taken "a number of significant steps" to discourage targeting firms that were otherwise operating within the law.
However, the new court filings tell a completely different story.
They go back to late 2010 and early 2011 when, according to a deposition from Chicago Regional FDIC Director Anthony Lowe, the FDIC's leadership in D.C. informed regional chiefs that "if a bank was found to be involved in payday lending, someone was going to be fired." This directive made clear to Lowe and his colleagues that they should exercise their power to make sure that payday lenders could not get access to banks.
This effort was clearly in line with the priority of the highest levels of authority at the FDIC. Gruenberg told colleague and Director of the Division of Depositor and Consumer Protection Mark Pearce that "we should discuss" a New York Times article about payday lending and banking in an email. Another email shows that Gruenberg also met personally with a senior bank official to push the bank to withdraw from its involvement with payday lending.
The targeting of payday lenders flowed out of Washington and to the various regional directors. Atlanta Regional Director Thomas Dujenski, who was deposed for the lawsuit, wrote in an email released by Advance America that he "literally can not stand pay day lending. They are abusive, fundamentally wrong, hurt people, and do not deserve to be in any way associated with banking." He would later tell employees that "any banks even remotely involved in payday [lending] should be promptly brought to my attention."
Dujenski's specific focus on choking off payday lenders was clearly of interest to top brass. In one email, he reported to FDIC director Mark Pearce that "I think you will be pleased" because a bank had stopped permitting payday loan providers to use its payment processing service.
"Now that is something to celebrate on Thanksgiving! :)," Dujenski wrote.
FDIC headquarters were also clearly involved in pressuring an Atlanta regional bank to withdraw its relationship to payday lenders. In November of 2011, a headquarters official learned from a colleague at the Consumer Financial Protection Bureau that an Atlanta-area bank "appears to have a relationship" with one or more payday lenders.
Headquarters quickly organized regional directors, and the next month seven of them (including Dujenski) met with the chairman of the bank. According to the bank chairman's deposition, Dujenski claimed that he was involved in "dirty business," and threatened to refer him personally to the Department of Justice for prosecution.
More at: https://freebeacon.com/politics/court-docs-obama-admin-targeting-businesses-ran-top-fdic/
The new information comes from a motion for summary judgement filed in federal court by the plaintiffs in Advance America et al. v. Federal Deposit Insurance Corp. et al.
Advance America, a payday lender, was one of the firms targeted by Operation Choke Point. The company contends—and the documents it filed show—that the FDIC was consciously working to target a totally legal industry, and also at a number of points to deny its involvement in the same work.
Choke Point was an initiative under which the Obama administration tried to shut down (https://www.washingtonpost.com/news/volokh-conspiracy/wp/2014/05/24/operation-choke-point/?utm_term=.81ace660b0b1) disfavored industries by removing their access to payment processing and other banking services, thereby cutting off their financial "oxygen." They did so by applying pressure to third-party banks through the FDIC and other federal financial regulators. Targeted businesses were almost all entirely legal, and included ammunition sales, online gambling, and payday loans.
The FDIC has repeatedly denied that it specifically targeted payday lenders. FDIC chairman Martin Gruenberg told Congress (https://financialservices.house.gov/uploadedfiles/hhrg-114-ba09-wstate-mgruenberg-20150324.pdf) in written testimony that targeting payday lenders was "not consistent with our policy," and claimed that the corporation had taken "a number of significant steps" to discourage targeting firms that were otherwise operating within the law.
However, the new court filings tell a completely different story.
They go back to late 2010 and early 2011 when, according to a deposition from Chicago Regional FDIC Director Anthony Lowe, the FDIC's leadership in D.C. informed regional chiefs that "if a bank was found to be involved in payday lending, someone was going to be fired." This directive made clear to Lowe and his colleagues that they should exercise their power to make sure that payday lenders could not get access to banks.
This effort was clearly in line with the priority of the highest levels of authority at the FDIC. Gruenberg told colleague and Director of the Division of Depositor and Consumer Protection Mark Pearce that "we should discuss" a New York Times article about payday lending and banking in an email. Another email shows that Gruenberg also met personally with a senior bank official to push the bank to withdraw from its involvement with payday lending.
The targeting of payday lenders flowed out of Washington and to the various regional directors. Atlanta Regional Director Thomas Dujenski, who was deposed for the lawsuit, wrote in an email released by Advance America that he "literally can not stand pay day lending. They are abusive, fundamentally wrong, hurt people, and do not deserve to be in any way associated with banking." He would later tell employees that "any banks even remotely involved in payday [lending] should be promptly brought to my attention."
Dujenski's specific focus on choking off payday lenders was clearly of interest to top brass. In one email, he reported to FDIC director Mark Pearce that "I think you will be pleased" because a bank had stopped permitting payday loan providers to use its payment processing service.
"Now that is something to celebrate on Thanksgiving! :)," Dujenski wrote.
FDIC headquarters were also clearly involved in pressuring an Atlanta regional bank to withdraw its relationship to payday lenders. In November of 2011, a headquarters official learned from a colleague at the Consumer Financial Protection Bureau that an Atlanta-area bank "appears to have a relationship" with one or more payday lenders.
Headquarters quickly organized regional directors, and the next month seven of them (including Dujenski) met with the chairman of the bank. According to the bank chairman's deposition, Dujenski claimed that he was involved in "dirty business," and threatened to refer him personally to the Department of Justice for prosecution.
More at: https://freebeacon.com/politics/court-docs-obama-admin-targeting-businesses-ran-top-fdic/