Friday, March 16, 2018
While the U.S. Department of Justice officially terminated Operation Choke Point Aug. 16, 2017, it appears numerous financial institutions have not received the memo. Opponents claim the Obama-era anti-fraud initiative, originally designed to combat criminal activities, has inadvertently harmed millions of legitimate business owners.
Critics maintain that by stigmatizing entire industry sectors, the OCP measures have led to stringent "de-risk" policies that inhibit high-risk merchants from opening and maintaining bank accounts and lines of credit. Their claims are further supported by an independent study published in March 2018, by the National ATM Council Inc., a trade association representing the retail ATM industry.
The retail ATM industry has rigorous compliance guidelines in place, noted NAC Executive Director Bruce Renard. "U.S. ATM owners and operators are thoroughly vetted before and after entering the ATM business; and, as such, they are not 'high risk' accounts that should be having these sorts of problems in obtaining bank accounts or access to cash," he stated. Renard said the association will continue to advocate on behalf of its members, to fully eradicate OCP's unwelcome residual effects on the national independent ATM community.
NAC Chairman and Access One Solutions Chief Executive Officer George Sarantopoulos said NAC is using practical approaches to end bank account blacklisting. He said NAC leaders and members are working with regulators, field examiners and financial institutions to restore ATM ISOs' and independent ATM deployers' access to financial services. He urged members to remain vigilant, stating, "NAC will continue the fight for the independent ATM operators who continue to struggle with bank account issues, despite Choke Point going away."
In July 2017, NAC directors and members met with Senate Banking Committee and House Financial Services Committee members to address ATM industry issues, with OCP topping the agenda. When OCP was disbanded a month later, NAC leaders declined to take full credit but acknowledged their efforts may have helped end the program.
On Feb. 15, 2018, Timothy W. Baxter, NAC founding director and President of Dallas-based Swypco LLC, testified before the Financial Institutions and Consumer Credit Subcommittee of the House Financial Services Committee. Both Renard and Sarantopoulos attended the hearing, titled "Examining De-risking and its Effect on Access to Financial Services."
Renard returned the following month to meet with congressional leaders. In a series of meetings, held March 6 through 9, 2018, he presented NAC survey highlights and OCP's ongoing residual effects on retail ATM stakeholders. Survey demographics show independent ATM deployers provide nearly 60 percent of the 470,135 ATMs in the United States. A majority of these "non-bank" ATMs are located outside major banks' footprints, Renard said, adding that these independent ATMs provide critical banking services to un-banked and under-banked consumers.
"I am encouraged that this un-American, anti-consumer, and anti-competitive blacklisting of independent/retail ATM bank accounts is finally getting the attention it deserves in Washington," Renard stated.
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