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Obama’s "Operation Choke Point" Plan To Create More Federal Dependency

Back in 2009 when Democrats controlled both Houses of Congress and the debate over the Dodd-Frank financial services industry remake was in full cry, conservatives warned that the creation of the Consumer Financial Protection Bureau was a precursor to a federal takeover of private credit-granting decisions.

Democrats, and some Big Government Republicans, ridiculed the charge while quietly stating that such federal government intervention in the credit market was necessary to protect low information consumers from allegedly rapacious lenders, such as payday loans, high interest credit cards and even pawn shops.

Now Breitbart’s Michael Patrick Leahy has broken the story of how those predictions of a federal takeover of credit granting decisions are coming true below the public radar and in direct conflict with the provisions of Dodd-Frank. 

Leahy’s must read article details how Congressman Kevin Yoder (R-KS) and Congressman Blaine Luetkemeyer (R-MO), drafted a letter signed by some thirty-one Members of Congress requesting information on what has become known as “Operation Choke Point.” In the letter Yoder,  Luetkemeyer  and their colleagues wrote, "[i]t has come to our attention that the DOJ and the FDIC are leading a joint effort that according to a DOJ official is intended to 'change the structures within the financial system...choking [online short term lenders] off from the very air they need to survive.' "

"We are especially troubled by reports that the DOJ and FDIC are intimidating some community banks and third party payment processors with threats of heightened regulatory scrutiny unless they cease doing business with online lenders," the letter read. "As a result, many bank and payment processors are terminating relationships with many of their long-term customers who provide underserved consumers with short-term credit options," it continued. 

Congress, they wrote, actually wanted to limit these type of actions. "Dodd-Frank also included a specific provision designed to prohibit the Consumer Financial Protection Bureau from imposing rate limitations on short-term loans. Neither Dodd-Frank, nor any other legislation passed by Congress, has given the DOJ/FDIC or any other federal agency the authority to 'take away the very air' that online lenders 'need to survive.' "

The Department of Justice, in the person of Deputy Assistant Attorney General, Consumer Protection Branch Maame Ewusi-Mensah Frimpong, went to Capitol Hill to meet with staffers and allegedly to provide a “briefing” on the program, only to refuse to answer any question or even to provide her name. The Obama Justice Department has subsequently taken the position that they are under no obligation to tell Congress anything about the program. 

All of this begs the question, why are they doing this?

Democrats, liberals and their Big Government allies among Republicans argue that short-term lenders take advantage of low information and low income consumers to charge abusive rates for loans, and that consumers with poor credit histories should in essence get the same or similar rates that consumers with good credit histories do. This is typical of liberal equality of result, as opposed to equality of opportunity, thinking.

We have a different take however. We see this as much deeper and more insidious than the old equality of result liberalism.

As we see it, “Operation Choke Point” is part of Obama’s long term plan to remake American society by killing-off any inclination to be self-sufficient among America’s working poor, who are the primary users and beneficiaries of short-term lending.

As things stand now if things get tight at the end of the month or there’s an unexpected need, like a car repair, the working poor can go to a short-term lender, get a loan (admittedly at high interest), take care of the problem themselves and pay it back by working more hours, taking on a second job or otherwise working to improve their financial condition.  

If short term lending is eliminated as an option for the working poor, where are they going to go if they need to solve one of life’s unexpected problems?

Why to the government of course.

Obama’s Operation Choke Point isn’t about consumer fairness or protection; it is about creating more dependent clients for the government who, without access to credit, will no longer have the option of solving their own problems and meeting their financial needs in the private economy.


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