WASHINGTON — The battle over funding for a Department of Justice program to root out fraud in the payments processing industry is heating up this week, as the Senate begins consideration of the law enforcement agency's appropriations bill.

The Senate began its consideration of a House appropriations bill for the Justice Department on Wednesday, which includes language cutting funding for Operation Choke Point. Critics of the program, including bankers and some lawmakers, have warned that it has overreached beyond its mission and is now chilling legitimate business activity rather than stopping fraudsters.

Some advocacy groups, meanwhile, are now voicing their support for the initiative as an effort to protect consumers. Twenty-seven organizations, including Americans for Financial Reform, the Center for Responsible Lending and Public Citizen, penned a letter to members of the Senate Wednesday, urging them to fight back against efforts to block funding for Operation Choke Point.

"Please oppose any effort to block funding for the Department of Justice's Operation Choke Point or to weaken other regulator efforts to fight payment fraud," the letter says. "We need every tool to fight data breaches, identity theft, scams, frauds, money laundering, and other illegal conduct."

Opponents of the Justice Department's efforts have so far been the most vocal on Capitol Hill, pointing to instances of banks cutting ties with payday lenders and other businesses in the wake of the program, which was launched last year.

But advocates are now countering that the focus of the program remains on illegal activity, which ultimately harms consumers. The Justice Department has also repeatedly argued that the effort is centered on those breaking the law.

"Originating banks are not always aware that they are being used to facilitate illegal activity. But if and when they choose to continue to profit from lines of business in the face of blatant signs of illegality, they become an appropriate target for enforcement action," the letter says. "Indeed, if regulators do not take action against banks or payment processors facilitating illegal payments, they are left playing an impossible game of 'whack a mole' which makes it much too easy for fraudsters to get away with continuing to break the law, and processing institutions to continue to benefit from law-breaking."

The House provision cutting funding was approved by voice vote as an amendment on the House floor late last month, but it is not likely to remain in the base text the Senate takes up. Opponents of Operation Choke Point are expected to push to have the measure added back in as an amendment, said a lobbyist tracking the issue. Even if the amendment doesn't pass, critics will push to keep the House provision in the final appropriations bill when the two chambers go to conference.

A second lobbyist noted that the DOJ and the Obama administration are likely to push hard to keep the "no funds" language out of the legislation up until the point when it is signed into law.

The Senate is expected to vote soon on the appropriations bill, which also funds the Department of Commerce, the National Aeronautics and Space Administration, the National Science Foundation and related agencies.

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