Transaction Trends

Scott Talbott, SVP of Government Affairs, ETA

As ETA members know all too well, Operation Choke Point (OCP) was bad for our industry, our economy, and our nation. OCP was an attempt by the Justice Department and other regulators to pursue politically disfavored – but legal – categories of merchants by targeting our nation’s payments systems. In 2014, federal law enforcers began targeting not the merchants directly, but rather, payments companies that provide processing service to those industries. By putting legal pressure on payments companies, Justice hoped to stifle these select merchants by cutting off their access to electronic payments.  ETA members were the ‘choke’ in Chokepoint.

ETA has been at the forefront of the effort against this dangerous and overreaching program and raised the alarm about the real impact on consumers and merchants from an overly broad use of enforcement authority.

Since the inception of OCP, ETA has been the voice of the industry on the Hill and in the media.

• I have testified on behalf of our members before Congress against OCP.
• We have met frequently with regulators from the CFPB, FTC, FCC, OCC, Federal Reserve and DOJ to educate them on the negative effects of OCP.
• We have activated ETA members – getting them to reach out directly to their Member of Congress.
• We have facilitated in-person meetings with our members and Hill staff to ensure the voice of payments is heard.
• We have participated in numerous broadcast and print interviews and published several Op-Eds on the subject.

As a result of all of our hard work, I’m happy to announce the Department of Justice formally confirmed its termination of the controversial OCP initiative.

When it comes to stamping out fraud, the payments industry makes a better partner than a target. Payments companies share an interest with law enforcement in curtailing illegal activity. After all, because consumers have zero liability for fraud, it is payments companies that bear the financial burden of such illegal activity. That’s why we have worked tirelessly to educate the regulators and legislators who oversee our industry.

OCP was the wrong execution of the right idea. While ETA opposed OCP, we share the goal of ending fraud.  To this end, ETA members developed the Guidelines on Merchant and ISO Underwriting and Risk Monitoring.  The Guidelines are voluntary best practices for the acquiring industry to use in onboarding and oversight of merchant clients. The Guidelines were published in 2014 to help ETA members detect and prevent fraudulent merchants from accessing the nation’s payments systems.  The Guidelines are available free to ETA member companies here. In addition to being a great educational tool, the Guidelines serve as an example of how the industry is fighting fraud and are regularly referenced by a number of Congressional Committees and Members of Congress.

I’m proud to see all our industry’s advocacy efforts pay off. I want to thank all ETA members who have worked so closely with us to make sure our industry’s perspective was heard.

For more information on ETA’s advocacy efforts around OCP, click here.