- Administration has abused the law in mortgage lender settlements [House Judiciary hearing: Paul Larkin, Ted Frank testimony]
- Department of Justice official says banks may need to go much farther in informing authorities of customers who may be up to no good than just sending Suspicious Activity Reports (SARs) [Kevin Funnell] Interpol Red Notices, which among other effects cut off banking access, are open to geopolitical manipulation [Ted Bromund, Weekly Standard]
- No, Operation Choke Point hasn’t gone away, not in the slightest [Funnell, Jared Meyer/Economics21]
- What Elizabeth Warren has done to Michael Greve’s mortgage refinance application isn’t pretty [Liberty and Law]
- Battle over loser-pays clauses in corporate governance rages on in Delaware [Reuters]
- “The U.S. government’s stupid tax war on expatriates” [Brett Arends, earlier on FATCA]
- Dodd-Frank: “Wall St. attacked, Main St. wounded” [Iain Murray]
Search Results for ‘choke point bank’
Banking and finance roundup
- Calvin’s refuge: how Swiss banking confidentiality undermined state despotism [Matt Welch, who also discusses how the gruesome FATCA law is proving to be the first component of an multilateral effort by OECD governments to curtail account privacy]
- Dodd-Frank compliance costs and the rapid decline of community banks [Marshall Lux and Robert Greene/Kennedy School, Carrie Sheffield, Jeff Sovern with a scoffing view; WSJ]
- “The IRS seized $242 million based on suspected structuring in more than 2,500 cases from 2005 to 2012.” [Jacob Sullum, new Institute for Justice report (PDF) by Dick Carpenter II and Larry Salzman and summary] More: new structuring case against Dubuque, Iowa widow raises question of whether feds have really followed through on promise not to press structuring charges where income is otherwise legal [AP/WHEC]
- “House Investigators: DOJ Forced Banks to Donate to Left-Wing Groups” [Joel Gehrke, NRO]
- “FDIC retreats on Operation Choke Point?” [Todd Zywicki] Rep. Luetkemeyer likely to keep up the pressure on regulators [Kevin Funnell]
- “Fed Officials Accused of Perjury in AIG Bailout Trial” [Lawrence Cunningham, Concurring Opinions]
- “Standard & Poor’s Settlement Shows Futility Of Fighting Government Policy” [Daniel Fisher, earlier]
Banking and finance roundup
- House Oversight Committee report finds evidence FDIC used Operation Choke Point to strangle access to banking for lawful but disliked businesses [St. Louis Post-Dispatch, Bloomberg, report, Kevin Funnell, HalfWheel (cigar shops), Pete Kasperowicz, The Blaze (guns), Joe Adler/American Banker (critical views)]
- “Fallout for the S.E.C. and the Justice Dept. From the Insider Trading Ruling” [Peter Henning, NYT DealBook, on challenges to previous cases; earlier]
- Congress finally trims Dodd-Frank, with a nose hair clipper. Imagine what Sen. Warren will say if it takes up a scalpel or axe [Michael Greve; but see A. Barton Hinkle defending Warren’s position; Matt Levine (“not worth caring about”)]
- Did tax policy set out to make life tough for American expatriates, or does it just seem that way? [Neil Gandal, WSJ on FATCA, FBAR, etc.]
- “Like other federal agencies, the SEC has long been good at publicizing its initial accusations of wrongdoing …not so good at letting the public know when those accusations turn out to be unfounded or an overreach” [Russell Ryan via Bainbridge, more on SEC press releases on enforcement actions]
- A market with next to no entry: “If Primary Bank, Mr. Greiner’s proposed firm, wins approval, it would be only the second new bank the FDIC has cleared in the U.S. since 2010.” [WSJ]
- “The only people who benefit from shareholder litigation over M&A deals are lawyers. Period. End of discussion.” [Stephen Bainbridge; related, Steve Bradford via Bainbridge (“Delaware’ entire fairness standard morphs into a tax on deals for the benefit of plaintiff lawyers”), earlier here, etc.]
Banking and finance roundup
- “How Operation Choke Point Hurts the Unbanked” [former FDIC chairman William Isaac, American Banker]
- A nation of snitches: “U.S. rules would expand white collar crime informers” [Reuters]
- Courts should stop giving deference to agency interpretations of criminal law: “Justice Scalia’s shot across the SEC’s bow re insider trading” [Bainbridge] Judge Rakoff criticizes SEC for bringing so many enforcement proceedings to in-house adjudicators [Reuters, earlier]
- Monitor envy: “The biggest U.S. banks have 100 or more on-site examiners from an array of regulators” and now New York’s financial regulator wants to get into the act [WSJ]
- Seventh Circuit finds Bank of America entitled to ask loan applicants about expected continuing entitlement to disability benefits, but in the mean time bank agrees in DoJ settlement to cease such inquiries [Easterbrook opinion in Wigginton v. Bank of America, see last page]
- Two SEC commissioners warn that campaigned-for “fair fund” to compensate investors in CR Intrinsic inside trading case “likely to benefit only class-action attorneys and the fund’s administrators” [Daniel Gallagher and Michael Piwowar, WSJ]
- “U.S. veterans sue [major European] banks, claim they should pay for Iraq attacks” [Alison Frankel, Reuters]
News from Operation Choke Point
Throwing its Chicago regional director under the bus, the Federal Deposit Insurance Corporation (FDIC) has disavowed a February 2013 letter in which the director had told an Ohio bank, “It is our view that payday loans are costly, and offer limited utility for consumers, as compared to traditional loan products … Consequently, we have generally found that activities related to payday lending are unacceptable for an insured depository institution.” Critics have charged that the federal government has not been forthright about the extent to which it discouraged banks from providing services to lawful but frowned-on businesses in such lines as payday lending and ammunition sales. [Kevin Funnell, earlier on Operation Choke Point]
Banking and finance roundup
- Following public furor, are feds backing off “Operation Choke Point” program discouraging banking services to lawful but disfavored enterprises? [Daily Signal] Or does the choking continue? [Washington Business Journal (Capital One cuts off check-cashing firms)]
- FATCA challenge: “Ontario women sue Ottawa over compliance with new U.S. banking law” [Winnipeg Free Press, earlier]
- Corporate tax inversions: yes, journalist Jonathan Alter really did recommend “McCarthy-era loyalty oaths” [Taranto/WSJ] Obama admininstration was for them (in Delphi case) before it was against them [Bloomberg] And they’re popular with President Obama’s donors even aside from Warren Buffett [same] More: Charles Krauthammer.
- WSJ editorial on sanctions against Robbins Geller in Boeing securities suit. More: Daniel Fisher;
- Profile of Vanguard tax informant David Danon [Philadelphia Inquirer, earlier]
- Some Denver foreclosure lawyers settle overcharge case [Kevin Funnell, earlier]
- Contains real juice: “$35 million will go to groups that provide legal, housing and community development programs.” [AP/The Saratogian on New York’s share of Bank of America settlement; Stephen Bainbridge]
Operation Choke Point
Cato event held earlier this month with Rep. Darrell Issa (R-Calif.) and Cato senior fellow Mark Calabria. Here’s the description:
Launched in early 2013, “Operation Choke Point” is a joint effort by the Department of Justice (DOJ) and the bank regulators to limit access to the bank payments system by various businesses. Initially targeted at small-dollar nonbank lenders, Choke Point has grown to cover a variety of legitimate, legal businesses that just happen to be unpopular with DOJ, such as gun dealers and porn stars. Initial responses from DOJ claimed such efforts were limited to illegal businesses committing fraud. A recent report by the U.S. House Committee on Oversight and Government Reform reveals DOJ’s claims to be false. In today’s economy, almost any economic activity depends on access to the payments system; allowing DOJ, without trial or a right to appeal, to arbitrarily limit access represents an almost unprecedented abuse of power.
Banking and finance roundup
- In banking and FCPA cases, targets of DOJ prosecution are disproportionately firms domiciled abroad, and other countries do notice that [Jesse Eisinger, NYT “DealBook”]
- “Los Angeles’ Confused Suit against Mortgage Lenders” [Mark Calabria, Cato] Providence also using disparate impact suits in hopes of making banks pay for its housing failures [Funnell]
- Podcast discussion on Operation Chokepoint with Charles J. Cooper, Iain Murray, and Todd J. Zywicki [Federalist Society, earlier]
- New round of suits against banks based on ATMs’ imperfect wheelchair accessibility [ABA Journal, earlier here]
- Walgreen’s could save billions in taxes if it moved to Switzerland from U.S. Whose fault if anyone’s is that? [Tax Foundation]
- “Left unmentioned: how fed regulation and trial lawyers deter banks from protecting themselves with overdraft fees.” [@tedfrank on NYT report about banks’ use of databases to turn down business from persons with records of overdrawing accounts, a practice that now itself is being targeted for regulation]
- Scheme to seize mortgages through eminent domain stalling as cities decline to come on board [Kevin Funnell]
Banking and finance roundup
- Payday lenders sue federal agencies over Operation Choke Point [Bloomberg News, Business Journals, earlier; more, Funnell]
- Speaking of those lenders: “California Supreme Court to review ‘rent-a-tribe’ arrangement for payday lenders” [CL&P, more]
- “If someone starts trying to blame the Global Financial Crisis on ‘de-regulation’, you can stop reading…” [Lorenzo via Arnold Kling]
- Can we just admit that the feds’ real target in the Credit Suisse case was the bank’s customers? [ABA Journal]
- Maryland does not approve of Bitcoin [my Free State Notes via Kevin Funnell]
- Behind Halliburton v. Erica P. John Fund, SCOTUS’s big case on securities class actions, two lawprofs are jousting [Alison Frankel, Reuters, and there’s a Cato connection; earlier]
- For expats, FATCA raises “prospect of being discriminated against as an American for all things financial” [Peter Spiro/OJ; Sophia Yan, Money] More renounce U.S. citizenship [Yahoo] A Canada-based FATCA resource [Isaac Brock Society] Earlier here, etc.
House votes to defund Operation Choke Point
The vote, which has occasioned little notice thus far in the press, took place on a proposed amendment brought to the House floor by Rep. Blane Luetkemeyer (R-Missouri) and co-sponsored by three Democratic members (Cardenas, Hastings, Perlmutter) as well as two other Republicans (Mulvaney, Yoder) [Kelly Riddell, Washington Times] The investigation by Rep. Issa’s committee released last week capped a steadily mounting furor, starting among groups like payday lenders experiencing reduced access to the banking system but spreading to various “vice” businesses and the firearms community — assuming the administration is still distinguishing the latter from the former. Earlier here, here, here, etc.