“Choke Point is an affront to the American way of life”, says Marc Cohen, owner of Powderhorn Outfitters. And he is not alone. Many small business owners are suddenly finding out that their bank has closed their businessaccount. Why? Operation Choke Point.
Operation Choke Point, as dubbed by the Department of Justice officials, seeks to weed out any and all businesses the White House has decided are “objectionable”. According to a House report, the primary target is the short-term lending industry. The long list of undesirable businesses also includes non-financial businesses: certain ammunition merchants, coin dealers, sellers of pharmaceutical drugs, home-based charities, among others. It should be noted that all of these businesses are lawful enterprises.
According to The Daily Signal, Sens. Ted Cruz of Texas and Mike Lee of Utah, are currently trying to fight it. “The Obama administration initiated Operation Choke Point to punish law-abiding small businesses that don’t align with the president’s political leanings. The DOJ should not be abusing its power by trying to bankrupt American citizens for exercising their constitutional rights.”
Pawn shop owner, Brian Brookman, suddenly lost his bank account even though he has never had any trouble with federal or state officials. After doing some research, he concluded that his banker, JP Morgan Chase, closed the account because of his business activities. His pawn shop deals with vintage coins and selling firearms, which are labeled as “high risk” by federal bureaucrats.
Steve Stratford, owner of Secure Account Services, LLC., shared with The Daily Signal that his business has been on the verge of collapse twice. In 2013, his business accounts with both Chase Bank and Horizon Community Bank were closed. After doing some digging and talking to bank employees, he finally determined that the closures were due to Operation Choke Point. In fact, the banker told Stratford that if his Chase branch didn’t “mitigate the risk”, all accounts could be audited.
Yet another victim to Operation Choke Point, Marc Cohen, was denied a new line of credit. The reason: his involvement in the firearms industry. When he inquired further, his bank manager of more than 20 years apologized and explained that “the bank won’t lend you money because you sell guns.”
Thankfully, alternative lenders – like First American Merchant –have stepped in to help small business owners secure the business funding and payment processing solutions they need; they specialize in working with the high risk business. Through FAM’s large network, extensive partnerships and support staff, merchants can go on operating as they were before Operation Choke Point – even with a high risk categorization.