This bill seeks to protect bank customers that otherwise might have had their accounts targeted by Operation Choke Point by preventing federal banking regulators from forcing the termination of a business' account because of its "reputational risk". Operation Choke Point was an Obama era initiative launched by the Dept. of Justice (DOJ) in 2013 to target businesses suspected of fraud and money laundering activities. The program was criticized for targeting legitimate businesses and was ended by the Trump administration in August 2017, but could be re-instated under current law. This bill aims to block that from happening.
Federal banking agencies would be prohibited from formally or informally suggesting or ordering a depository institution (like a bank or credit union) to terminate a customer's accounts, groups of accounts, or restricting relationships with groups of customers unless:
The agency has a material reason to do so;
The reason is not based solely on reputation risk related to that customer or group of customers.
The “material reason” criterion would be satisfied if a federal banking agency believes that customer or group of customers in question poses a threat to national security, including involvement in terrorist financing.
Federal banking agencies would be required to notify the depository institution about a customer’s account restriction or termination — but wouldn't have to notify the customer. Any notice to the customer would be prohibited if the federal banking agency requests or orders the termination or restriction of a customer account if the customer is believed to be a threat to national security.
This bill also revises requirements for summoning witnesses and requiring the production of books or other records deemed relevant by the Attorney General for a civil investigation that may result in civil penalties for specified violations.