AFSA Supports SAFE Banking Act
On March 16, AFSA submitted a letter to Speaker Nancy Pelosi (D-CA) and Minority Leader Kevin McCarthy (R-CA) expressing its strong support for the bipartisan-backed Secure and Fair Enforcement (SAFE) Banking Act of 2021. Sponsored by Representatives Ed Perlmutter (D-CO), Nydia Velázquez (D-NY), Steve Stivers (R-OH) and Warren Davidson (R-OH), the SAFE Banking Act ends Operation Choke Point. Specifically, it prohibits a federal banking agency from ordering a bank to terminate a banking relationship with a legal business unless there is a valid reason and that reason is not based solely on reputational risk.
The bill had strong bipartisan support in the previous Congress with 206 cosponsors and passed the House 321-103.
“The ostensible intent of Choke Point program was to prevent criminal fraud. However, federal officials pressured banks to close accounts of businesses operating within state and federal law without legal recourse or due process solely because the officials were ideologically opposed to the businesses’ existence,” AFSA wrote in in its letter to Congressional leaders.
The program was targeted at payday lenders and gun dealers but ended up ensnaring other businesses, including installment lenders, who found their often-longstanding banking relationships abruptly ended.
“Legitimate bank customers, like traditional installment lenders, which have provided safe and affordable small-dollar credit to consumers in their communities for over a century, deserve fair access and fair treatment by federal banking agencies,” the letter continued.
AFSA commends the co-sponsors and members of Congress for their support of the consumer credit industry and will continue to advocate for the legislation’s passage.
March 19th, 2021 by Dan Bucherer