Feds Hit Online Gun Stores With "High Risk" Label
Some online guns stores say they are being targeted by the Obama administration. Federal regulators have classified those stores as “high risk” along with porn stores and head shops. Critics slam the move as an unfair way to put gun dealers out of business.
Today on America’s Newsroom, Katie Pavlich said she doesn’t buy the government’s argument that it’s a way to crack down on fraud.
Pavlich said the Department of Justice in conjunction with the Federal Deposit Insurance Corporation and Federal Trade Commission, have regulated certain industries making it harder for them to get loans. In 2011, the FDIC warned banks of credit risk with certain customers.
“One of those industries they’ve put on that list is the gun industry, and they’ve classified firearms and ammunition as high risk sales,” Pavlich said.
This in turn makes it more difficult for the targeted companies to buy and sell products.
Pavlich said the DOJ is bypassing Congress to discriminate against people who are exercising their Second Amendment right. Furthermore, she said the DOJ hasn’t provided valid statistics to back up why online sales of ammunition and firearms are high risk.
“When you look at the number of firearms in this country and the amount of ammunition purchased online, the risk is actually very low. And so they’re doing this as a way to meet their political means,” Pavlich said, noting that President Obama’s gun control agenda was rejected by Democrats in the Senate last year.
Read more from The Washington Times:
Meanwhile, the Justice Department has launched Operation Choke Point, a credit card fraud probe focusing on banks and payment processors. The threat of enforcement has prompted some banks to cut ties with online gun retailers, even if those companies have valid licenses and good credit histories.
“This administration has very clearly told the banking industry which customers they feel represent ‘reputational risk’ to do business with,” said Peter Weinstock, a lawyer at Hunton & Williams LLP. “So financial institutions are reacting to this extraordinary enforcement arsenal by being ultra-conservative in who they do business with: Any companies that engage in any margin of risk as defined by this administration are being dropped.”
A Justice Department representative said the agency is conducting several investigations that aim to hold accountable banks “who are knowingly assisting fraudulent merchants who harm consumers.”
“We’re committed to ensuring that our efforts to combat fraud do not discourage or inhibit the lawful conduct of these honest merchants,” the Justice Department said in a May 7 blog post.
But gun retailers say their businesses are being targeted in the executive branch’s efforts:
• T.R. Liberti, owner and operator of Top Gun Firearms Training & Supply in Miami, has felt the sting firsthand. Last month, his local bank, BankUnited N.A., dumped his online business from its service.
An explanatory email from the bank said: “This letter in no way reflects any derogatory reasons for such action on your behalf. But rather one of industry. Unfortunately your company’s line of business is not commensurate with the industries we work with.”
Pavlich said, “The problem is when you have the federal government coming down with all of their power against these banks to put these people into high risk pools, it’s very difficult for them to fight back. And so it is a way for the administration to squeeze this industry.”
She predicted that the fight over this will end up in the court system under discrimination cases.