Nationwide Biweekly Administration (Nationwide) has been allowed to move forward with its Operation Choke Point claims against the Consumer Financial Protection Bureau (CFPB). Operation Choke Point is a U. S. Department of Justice initiative meant to block access to payment systems by targeted businesses and shut them down without a court order.
In an order denying CFPB’s Motion to Dismiss, the U. S. District Court in San Francisco on December 13, 2016, ruled that Nationwide’s Operation Choke Point counterclaim against CFPB will not be dismissed, and CFPB’s motion is denied.
In its counterclaim, Nationwide seeks preliminary and permanent injunctive relief to prevent CFPB from using Operation Choke Point tactics in the future with any bank providing services to Nationwide and its customers.
Key Excerpts from the Court’s Order Denying Motion to Dismiss include:
• Nationwide filed amended counterclaims with additional material directed at showing CFPB’s participation in federal government’s Operation Choke Point;
• “Whether Nationwide will be able to present enough evidence to create a triable issue of fact and, if so, then to persuade a trier of fact that the inferences it advances should be adopted, are questions for a later day”
According to details included in the filing of the claim against CFPB, Nationwide provided a lawful and legitimate service that was helping over 135,000 consumers achieve interest savings on their bank mortgages and reduce their debt much faster compared with the lender’s standard year projection. From 2003 to 2015, NBA saved its customers over $3 billion in bank finance charges and only charged 5 percent of that amount in fees. A standard projection for interest on a 30-year mortgage is longer and more interest than the comparison of interest and years on Nationwide’s Interest Minimizer program, for example.
Nationwide’s Interest Minimizer program was suspended for over 135,000 customers because of the terminations by all the banks providing the automated services essential to the program.
Key excerpts from the Counterclaim against CFPB include:
• CFPB never notified Nationwide that it had violated any laws, regulations, or guidelines, yet nevertheless filed a lawsuit against Nationwide in May, 2015. CFPB issued a Press Release making statements about Nationwide;
• All Nationwide’s banks were supervised by CFPB. All Nationwide’s banks terminated its accounts shortly thereafter;
• Without banking relationships to automatically process biweekly debits from Nationwide customers, Nationwide has been unable to perform services that its over 135,000 customers wanted to save interest and for convenience through customized automation. These customers were scheduled to save over $3.1 billion in bank finance charges.
• The CFPB was a founding member of the federal Operation Choke Point program to pressure banks to terminate targeted customer’s bank accounts without a court order to do so;
• CFPB engaged in a campaign to drive biweekly mortgage interest savings businesses, like Nationwide, and other third-party payment processors out of business by exerting back-room pressure on banks and other regulated financial institutions to terminate their relationships with Nationwide and other such businesses.
• No provision of law grants the CFPB the authority to carry out these activities. The CFPB acted in excess of its statutory authority, and in violation of Nationwide’s due process rights, in its efforts to destroy Nationwide’s business.
• The original CFPB complaint lacks substance and was premised on mathematical and accounting errors. It violates the First Amendment by seeking to penalize and enjoin Nationwide from communicating truthful and non-misleading commercial speech.
• The CFPB cited materials that had been approved as true and accurate by Richard Cordray, current director of the CFPB, when he was attorney general in Ohio.
• As a direct result of the CFPB’s actions, Nationwide and its 135,000 customers have suffered and, absent relief from the Court, Nationwide will continue to suffer harm to its business and goodwill, and infringement and deprivation of its rights under the Constitution and federal law.
• The counter claim asks for a decision requiring the CFPB to immediately transmit a copy of a court order granting the requested declaratory and injunctive relief to all banks that have terminated critical services to Nationwide, as well as any other financial institution or others who have been directly or indirectly pressured, coerced, intimidated, or threatened by the agency to refuse to provide banking services to Nationwide.
The filing asks that the CFPB’s actions be permanently enjoined.
Nationwide is requesting anyone with information regarding CFPB and termination of a company’s bank accounts outside of a court proceeding, please come forward and contact [email protected]
Nationwide Biweekly Administration (Nationwide), a privately-held company, located in Xenia, Ohio, was founded in 2002 by Daniel Lipsky to develop an automated and customer-friendly model to help people pay off their debts faster and reduce interest charges on mortgages, credit cards, student loans and auto loans. Because of the appeal of its automated program and the overwhelming satisfaction of its customers, Nationwide grew rapidly. It employed more than 160 people and was licensed in over 40 states to help consumers save money on their loan interest payments until all its banks terminated essential services.
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