A U.S. district judge has allowed a suit by payday lenders attacking Operation Choke Point to continue. The judge denied motions by the Federal Reserve Board, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency for summary judgment and to dismiss claims by the lenders that the agencies’ involvement in Operation Choke Point is depriving the lenders of their due process rights (Advance America v. FDIC).

Future harm. The federal banking agencies argued that, given the undisputed material facts, the lenders cannot show that they have suffered a deprivation of liberty without due process. Although the agencies demonstrated that the lenders "continue to access the banking system and remain quite profitable," the judge found it insufficient to grant summary judgment. The "crux" of the lenders’ argument, according to the judge, is that if Operation Choke Point continues, they will be effectively cut off from the banking system in the future, and the fact that the agencies "can definitively prove that those harms have yet to befall Plaintiffs does not refute this claim."

Plausible allegations. The agencies’ motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim was also denied. The judge determined that the lenders’ allegations that they have previously lost bank accounts as a result of the actions of the agencies, and that they will continue to do so if those actions continue, are sufficient to demonstrate the injury in fact, causation, and redressability necessary to establish standing. Also, even though the judge previously ruled on a preliminary injunction that the lenders were unlikely to prevail on the merits, she ruled that because the lenders’ "allegations are sufficiently plausible, though just barely," the agencies’ motion to dismiss must be denied.