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Tuesday, August 22, 2017

Cautious relief as Operation Choke Point ends

An Aug. 16, 2017, letter from U.S. Asstistant Attorney General Stephen E. Boyd to House Judiciary Chair Bob Goodlatte marked the end of Operation Choke Point (OCP), an anti-crime initiative that numerous professionals in the payments industry denounced as regulatory overreach. OCP put extreme pressure on banks and payment processors to deny services to select high-risk, cash-dependent businesses on the assumption that those businesses were prone to illegal activities and posed a reputational risk to banks. Additional copies of the letter were sent to the U.S. Department of Justice, Federal Reserve and Office of the Comptroller of the Currency.

"Ordinarily speaking, law enforcement moves from the specific to the general," Boyd wrote. "A bad actor is identified and then gradually the net widens to capture co-conspirators or a larger criminal enterprise. OCP started by presuming a whole industry guilty until individual merchants prove their innocence."

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