Trump EO bans banks from discriminating against gun owners
President Donald Trump signed an executive order Aug. 7 banning banks from discriminating against firearms companies, removing one of the tools that previous administrations have used to curtail the rights of Americans to keep and bear arms.
The move comes after years of pressure by anti-gun politicians and groups trying to force banks from doing business with the firearms industry. During the Barack Obama presidential administration, banks were pressured by the United States Department of Justice (DOJ) to drop gun companies or charge them exorbitant rates through the agency’s “Operation Choke Point.”
According to the Wall Street Journal, the DOJ and the Federal Deposit Insurance Corporation (FDIC) would issue “informal” and “unwritten suggestions” to banks to stop doing business with firearms companies. The federal government claimed that firearms dealers were at high risk for fraud and money laundering. These claims were made even though, to purchase a firearm, the buyer must prove their identity and go through a background check.
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The targets were not suspected of any crimes. The government simply didn’t like their business, so it pressured the banks to cut them off. Many critics of the operation claimed that these companies’ due process rights were being violated. The evidence presented to Congress was undeniable.
“I fear that activists at the DOJ and the FDIC are abusing their power and authority and are going after legal businesses and, in effect, they are weaponizing government to meet their ideological beliefs,” said Subcommittee chair Sean P. Duffy (R-WI) during a congressional hearing in March of 2015.
Gun dealers were lumped into a category with other so-called “high-risk” businesses by the FDIC. These different businesses included drug paraphernalia sales, escort services, Ponzi schemes, and pyramid-type sales. The FDIC would be forced to revise its policy in July 2014. Operation Choke Point would continue until 2017. After the FDIC settled multiple lawsuits and a blistering report from Congress, the operation was finally shuttered.
The report read:
“Forceful prosecution of those who defraud American consumers is both responsible and admirable. However, Department of Justice initiatives to combat mass-market consumer fraud must be legitimate exercises of the Department’s legal authorities and must be executed in a manner that does not unfairly harm legitimate merchants and individuals. Operation Choke Point fails both these requirements. The Department’s radical reinterpretation of what constitutes an actionable violation under § 951 of FIRREA fundamentally distorts Congress’s intent in enacting the law, and inappropriately demands that bankers act as the moral arbiters and policemen of the commercial world. In light of the Department’s obligation to act within the bounds of the law, and its avowed commitment not to ‘discourage or inhibit’ the lawful conduct of honest merchants, it is necessary to disavow and dismantle Operation Choke Point.”
Even though the operation ended, there was still pressure on banks to stop doing business with gun companies from anti-gun organizations. These organizations would apply pressure to banks to drop companies. Many banks and credit card processors stopped doing business with gun companies because of “reputational risk.”
One company was Elavon, which threatened to stop doing business with companies selling 80% kits. These demands came before the Bureau of Alcohol, Tobacco, Firearms, and Explosives’ (ATF’s) new rule on frames and receivers.
With the new executive order, the anti-gun organizations have one less method of curtailing the rights of Americans. These anti-gun organizations are against discrimination unless it is for political means.
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