An initiative by the United States Department of Justice that targets banks that work with businesses at a “high risk” for fraud has included firearms and ammunition sellers in its list of “dangerous” merchant categories, leading some shooting sports retailers to claim they’re being politically discriminated against.

The effort, known as “Operation Choke Point,” was ostensibly begun in 2013 to investigate banks associated with businesses involved in get-rich-quick ploys, Ponzi schemes, and other “questionable” pursuits. However, in the past several months firearms retailers and companies have reported encountering strange financial difficulties with their banks and in some cases, the complete severance of stable, decades-long business relationships—leading some to point to the operation as the cause of their problems.

Writing for Grand View Outdoors, OutdoorHub contributor Tom McHale said the following on the scandal:

While the underlying objectives of the initiative sound innocent enough, many worry the increased oversight could be used to squeeze legitimate businesses the federal government doesn’t like into default.

[…]

Simply by signaling intent to increase the level of scrutiny of certain bank customers, defined as “high risk” business types, federal authorities can exert enormous pressure on banks, experts say. What institution would want more frequent audit activity simply by choosing to maintain business relationships with customers deemed undesirable by auditors?

Click here to read Grand View Outdoors’ full article on the controversy, which goes into greater detail on retailers’ accusations.

Allegations of discrimination by the Obama Administration’s Justice Department are serious enough that the National Shooting Sports Foundation issued the following statement yesterday:

The National Shooting Sports Foundation has been investigating the possible role of the federal government in influencing banks in their lending and business banking relationship decisions regarding companies in our industry. We have heard from several industry members that they had banking relationships terminated by their lending institutions.

We respect the right of financial institutions to make business decisions based on objective criteria. It is unacceptable, however, to discriminate against businesses simply because they are engaged in the lawful commerce of firearms, an activity protected by the Second Amendment.

NSSF staff has met with members of the House Financial Services Committee and members of the Oversight and Government Reform Committee concerning several documents that have surfaced from the FDIC labeling companies in the firearms and ammunition industry as “high risk.”

As a result, we have worked with U.S. Rep. Blaine Luetkemeyer (R-MO) and expect that he will offer today an amendment to the FY15 Commerce, Justice, Science and Related Agencies Appropriations Bill, which would prevent federal funds from being used as part of “Operation Choke Point” or in any effort targeting companies involved in the lawful commerce in firearms.

We will continue to investigate the extent of any improper government involvement and will update our members as more information becomes available.

OutdoorHub.com will continue to follow the investigation into Operation Choke Point as it progresses. Special thanks to Hilary Dyer from Grand View Outdoors for sharing Tom McHale’s article with us.

What's Your Reaction?

Like
Like Love Haha Wow Sad Angry

5 thoughts on “Government’s ‘Operation Choke Point’ Under Scrutiny for Targeting Gun Sellers

  1. Seems whole story is loaded with ifs, maybe and possible, possibly, I suspect they are going after gun dealers/ammo that has shown a propensity to have guns used in crime. Remember on store in Tacoma WA that was on that list, and perhaps a track on money from drugs to guns. Let’s get some hard facts first, not Organizations and pols trolling for publicity; I have yet to see anything or comments published on where the criminals get guns, that would be interesting if every time anyone busted for crime with guns, the source of guns was published along with crime.

  2. Well fw I can tell you my credit card merchant provider started charging me a surcharge because my business was gun related. I’ve been doing business on the Internet with credit cards for over a year now and have not had a single incident of fraud. Not even a single chargeback over thousands of transactions. Gun owners are a mostly honest bunch, and gun businesses are not high risk for fraud, not at all in my experience.

    Software and computer hardware on the other hand… now that is a high risk business.

    1. I’m not sure what you are stating here. A merchant account is so you can process CC payments no matter the business, you are charged a fee to process every transaction.

      1. seems he referred to a “surcharge”, something above and beyond his “normal usurious” fees…

  3. This is just a backdoor way to go after guns themselves. It also may replace the small dealer by intimidation. I would expect that if congress and the Senate would go after this it would go away due to it being an election year.

Leave a Reply

Your email address will not be published. Required fields are marked *