Court Docs: Obama Admin Targeting of Businesses Ran to Top of FDIC

New court filings document the extent to which the Obama administration used government power to target disfavored industries, and subsequently sought to avoid responsibility for its targeting program.

The new information comes from a motion for summary judgement filed in federal court by the plaintiffs in Advance America et al. v. Federal Deposit Insurance Corp. et al.

Advance America, a payday lender, was one of the firms targeted by Operation Choke Point. The company contends—and the documents it filed show—that the FDIC was consciously working to target a totally legal industry, and also at a number of points to deny its involvement in the same work.

Choke Point was an initiative under which the Obama administration tried to shut down disfavored industries by removing their access to payment processing and other banking services, thereby cutting off their financial "oxygen." They did so by applying pressure to third-party banks through the FDIC and other federal financial regulators. Targeted businesses were almost all entirely legal, and included ammunition sales, online gambling, and payday loans.

The FDIC has repeatedly denied that it specifically targeted payday lenders. FDIC chairman Martin Gruenberg told Congress in written testimony that targeting payday lenders was "not consistent with our policy," and claimed that the corporation had taken "a number of significant steps" to discourage targeting firms that were otherwise operating within the law.

However, the new court filings tell a completely different story.

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