I don't have any problem when a bank that has knowingly facilitated third-party fraud gets slammed by the Choke Point steamroller. But when the effort spreads to legitimate businesses that are not breaking laws, banks sit up and take notice, lest they be found guilty by association.

one of my fears is that we have a customer who comes into the bank wanting to wire money for whatever reason. As we do our due diligence on the wire, we suspect that it is fraudulent and advise the customer as such. Customer shrugs off our advice and instructs us to perform the wire, they've done their homework and it is, in fact, legitimate to them.

Wire gets done...lo and behold, customer back 7-10 days later claiming it was a scam and they want us to help them recover the funds.

Our front line staff and managers have a balancing act to perform - trying to determine if a wire is valid or not to help customers. Tell them we won't do the wire, we risk losing a customer, especially if it is a valid wire.

Customer them goes to a regulator and complains we did/didn't do a wire, and if we did it, after advising we thought it may be a scam, are we now guilty of helping to perpetuate the scam in the eyes of the government investigators? I've seen stranger things happen.

And it scares me to think at some point CFPB may decide that wire losses need to be rolled under Reg E if a consumer was scammed - and the bank owes them the money back.

I concur. If banks are knowingly complicit in an illegal activity, they are liable...but that's no change. Selective government morality regarding legal activities is a whole other ballgame that scares me tremendously.

As far as Happy's point, as if we don't do enough documentation and record retention, we are going to have to do more to prove our due diligence. Banks are currently guilty until proven innocent. The CFPB has got to be reined in but I'm not sure it's going to happen anytime soon.

Operation Chokepoint isn't a CFPB initiative, although I'm not at all certain the Bureau would not support it. It's the Justice Department that is pushing this train down the track. And certain activist attorneys general are cheering them on.

I'm just wondering what triggered the press release...they're still patting themselves on the back for a case where they trumpeted their victory in April?

Community bank vs. DOJ? Like shooting fish in a barrel regardless of the facts.

Maybe this?

http://luetkemeyer.house.gov/news/documentsingle.aspx?DocumentID=386072

More likely than not...thank you.

Bill set for mark up

Apparently, the Congressman has yet to hear of the regulators' act of contrition: "de-risking."

DOJ declares itself innocent

Whew, what a relief!

Glad that was settled

now on to the investigation to prove that MSB were not targeted as well.

The FDIC concluded its role was inconsequential .

Nevertheless a federal judge has decided the pay day lenders deserve their day in court.

This is just the biggest fun, it's a great study in how bureaucracies can rationalize their behavior to the point of denying the incredibly obvious.

What do you say when your wife catches you in bed with another woman? Deny everything. Woody Allen