Following steps by the Federal Deposit Insurance Corporation (FDIC) to implement components of legislation he introduced last Congress, U.S. Rep. Blaine Luetkemeyer (MO-03) reintroduced the Financial Institution Customer Protection Act to ensure the changes are codified into law and applied to all federal banking regulators.  

Last week, Luetkemeyer met with FDIC Chairman Martin Gruenberg and Vice Chairman Tom Hoenig and the senior officials told Luetkemeyer they accepted many of the policies contained in his legislation and agreed to implement them.

“While steps have been made in the case against Operation Choke Point, there is still a need for my legislation to be reintroduced this Congress,” Luetkemeyer said. “While I am pleased the FDIC is implementing parts of my legislation, it is not enough. I am reintroducing the Financial Institution Customer Protection Act because this legislation needs to be codified into law so that other agencies don’t ever fall into this illegal and abusive practice. Now that the FDIC has made it clear the agency has been involved in Operation Choke Point, I hope members on both sides of the aisle see the importance of my legislation because all of my colleagues have constituents at home who could be impacted by this program.”

The Financial Institution Customer Protection Act would dictate that agencies such as the Federal Deposit Insurance Corporation and the Federal Reserve cannot request or order a financial institution to terminate a banking relationship unless the regulator has material reason. In addition, the legislation would require the federal banking agencies to issue a rule defining the term “reputation risk” and strikes the word “affecting” in the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), replacing it with “by” or “against.” This is to ensure that the Department of Justice’s broad interpretation of the law is limited and the original intent of the statute is restored.