WASHINGTON — Payday lenders have claimed a small victory in their case against the government related to Operation Choke Point.
Lenders have sought relief over the Obama administration crackdown on links between banks, payday lenders and other companies, an effort to combat fraud. Several companies say they lost business as a result of the initiative and are alleging denial of due process.
Defendants in the case — including the Federal Deposit Insurance Corp., Federal Reserve Board and Office of the Comptroller of the Currency — had sought to dismiss new plaintiffs from being added to the case.
But in a ruling Wednesday, a U.S. District Court judge for D.C. said all but one of the new defendants can remain in the case. The judge, Gladys Kessler, also denied the defendants' motion for summary judgment against Advance America.
“While this ruling is a welcome development for our members, the federal government continues its campaign against small-dollar lenders,” Dennis Shaul, CEO of the Community Financial Services Association, said in a statement Thursday after the court ruling.
Despite a changeover in presidential administration, lenders and business owners involved in industries affected by Choke Point say they are still feeling the effects.
“We are very pleased that the court has rejected the government's argument and that the case will now proceed to discovery so that the facts relating to Operation Choke Point can be exposed," said David Thompson, a managing partner at Cooper & Kirk, who is representing Advance America.