WASHINGTON -- The Amusement and Music Operators Association 's executive vice-president Lori Schneider and legislative chairwoman Emily Dunn, Tom's Amusement Co. (Blue Ridge, GA), returned to the nation's capital to continue their effort to secure due process for operators who make frequent deposits and withdrawals of coins and small-denomination banknotes.
These amusement and vending machine operators have been subject to harassment by banks attempting to conform to federal directives apparently issued in the belief that such transactions are indicative of money laundering. Initiatives like the Justice Department's Operation Choke Point have pressured banks to investigate and report on customers who routinely make these suspicious transactions, and many banks have sought to free themselves of this burden by canceling those customers' accounts.
Accordingly, Schneider and Dunn traveled to Washington early last month to meet with key congressional offices of both the Senate and the House to deliver an urgent message: "the bank account closures have reached a crisis level for our members and we need relief now."
After that visit, AMOA was invited to return to Washington on June 22 with two witnesses who have been affected by Operation Choke Point, to share their stories at a roundtable discussion with House Judiciary chairman Bob Goodlatte (R-VA), Blaine Luetkemeyer (R-MO), who chairs the Sub-Committee on Financial Institutions and Consumer Credit and serves on the House Financial Services Committee, and Darrell Issa (R-CA), a member of the House Judiciary Committee.
Redress Of Grievances
The AMOA officials accepted that invitation. They report that the association was well-represented by its witnesses, who shared their experiences and the overwhelming negative impact these had on their businesses.
During the meeting, Congressman Luetkemeyer explained that he had reintroduced legislation to restore the balance between financial institutions and regulators, and to protect private industry from organized bureaucratic intimidation. This legislation, the Financial Institution Customer Protection Act, passed the House of Representatives in the 114th Congress.
"Last Congress, the House of Representatives took the first step in putting an end, once and for all, to Operation Choke Point by passing my legislation," Luetkemeyer said. "Although there is a new administration and Department of Justice in place, this legislation is necessary to ensure that no future administration will have the opportunity to negatively impact individuals and legal businesses through this unprecedented initiative. We must continue to demand greater transparency and end the practice of allowing government bureaucrats to use personal and political motivations to block financial services to licensed, legally operating businesses."
Rule Of Law
The Financial Institution Customer Protection Act would prohibit agencies such as the Federal Deposit Insurance Corp. (FDIC) and the Office of the Comptroller of the Currency, among others, from requesting or ordering a financial institution to terminate a banking relationship unless the regulator has material reason. Any account termination requests or orders would be required to be made in writing and rely on information other than reputational risk. In addition, the legislation 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 once-broad interpretation of the law is limited and the original intent of the statute is restored.
Luetkemeyer also encouraged the group to continue to email their experiences and any supporting information to firstname.lastname@example.org. "AMOA shared this email address earlier this year when making a push for our industry to be heard on this issue," Schneider said.
Schneider and Dunn urged operators to educate themselves about this issue. They reported that, over the past few weeks, members have provided useful information.
For example, account closure notices typically come as a form letter, regardless of how long the operator has been doing business with the bank. "Most members are given 30-60 days to close all accounts, even personal," Schneider reported. "Unfortunately, some are given only two weeks. Rarely is a reason given, or an opportunity for recourse extended.
"Many members are receiving intrusive questionnaires from banks," she continued. "This doesn't always mean your accounts will be closed, but if you refuse to answer, most likely they will."
Recently, AMOA learned that locations in which operators have placed automated teller machines are being sent an intrusive questionnaire by the location's bank.
According to the association, the majority of closures are coming from such big banks as Bank of America, BB&T, Wells Fargo, PNC and Chase, among others. A couple have been regional or local banks.
"When hit by account closures, we've heard that local community or regional banks are most open to working with operators in opening new accounts," Schneider said. "Many operators have been forced to move to a combination of armored car and banking services."
AMOA will conduct a webinar during the week of July 10 to provide an update to its members, and will encourage operators to visit with their representatives when they return home for the August recess. During the webinar, AMOA's legislative counsel will educate participants on how to set up an appointment, and will review the talking points to make the most of this grassroots effort. Details of the webinar will be published soon.
AMOA urged: "Continue to share what you are experiencing, whether it be account closures, increased fees or banking questionnaires." AMOA has set up an Internet portal for this purpose. The association will eliminate all identifying information except for city and state. Members also may contact Schneider at email@example.com or (800) 937-2662 to share experiences.