Operation Choke Point was also derided in an op-ed in American Banker magazine by William M. Isaac, former chairman of the FDIC.
In 2011, the FDIC released a report titled “Managing Risks in Third-Party Payment Processor Relationships.”
Its two branches were taken over by Ameris and the FDIC made depositors whole to the extent of their insurance.
“The proportion of banks that were unprofitable fell to 8.4 percent from 10.6 percent a year earlier,” the FDIC reported.
Two weeks later, the FDIC seized Washington Mutual and wiped out the bondholders.
When your bank fails, as hundreds have in the last several years, the FDIC fund, which now contains $33 billion, steps up.
One has FDIC insurance, which guarantees accounts up to $250,000.
After a radical restructuring—and a round of debt-forgiveness from the FDIC—the consultancy survived.
The investigation was originally started by the FDIC and the Utah Department of Financial Institutions.
And the insurance fund run by the FDIC is replenishing itself without having to dun taxpayers.
