Rep. French Hill Says He’d Investigate Operation Choke Point 2.0 as Financial Services Chair

In his pitch to be elected Chair of the House Financial Services Committee Thursday, Arkansas Representative French Hill said he would “Make Community Banking Great Again” in part by investigating Operation Choke Point 2.0, an unofficial policy of bank regulators to stifle the crypto industry’s ability to access traditional banking services. Hill is competing with Kentucky Rep. Andy Barr, Oklahoma Rep. Frank Lucas, and Michigan Rep. Bill Huizenga to replace the current chair, North Carolina Representative Patrick McHenry, who is retiring.

The “political targeting” that Republicans say occurred under Obama-era Operation Choke Point, in which federal bank regulators placed additional regulatory scrutiny on industries such as payday lending and gun sales, has “continued under the Biden-Harris Administration to go after industries like firearms and digital assets,” Hill said in a document outlining his policy priorities. “Congress should fully investigate the conduct of agency personnel to find if their actions and policies were consistent with applicable laws, regulations, and policy, while the Trump Administration should officially halt and reverse this policy.”

Hill’s plan to respond to the hostility to crypto from bank regulators is the first bullet of 14 on his proposed policy agenda, signaling that it would be a top priority for Hill if he is elected Chair. Hill and Barr are widely considered the two top contenders in the race to lead the House Financial Services committee, and while both representatives are pro-crypto, Hill has a stronger record of working with the industry. Hill, for example, said on the Unchained podcast in July that stablecoin and market structure legislation would be the first two bills he would try to pass as Chair. Lobbyists who spoke to Unchained also said that Hill has deeper industry connections than Barr.

Barr has gained momentum since last week’s election, however, aided by his more outspoken support of president-elect Donald Trump. This puts Barr on slightly different terms with the MAGA wing of the Republican party than Hill, who has attracted slight suspicion of his loyalty to Trump after being one of just three lawmakers to vote “present,” rather than signaling direct support for Trump-backed House Speaker Mike Johnson last year and instead allying himself with former Speaker Kevin McCarthy. Notably, Barr introduced the Fair Access to Banking Act in April, which would explicitly disallow banks and financial services companies from discriminating against industries or persons operating legally, such as the crypto industry.

However, one source who has been meeting with House Representatives on behalf of the crypto industry described the competition between Hill and Barr as “friendly.” Each candidate will likely have several more weeks to make their case before Republicans vote by secret ballot, the source said, though the winner of the House Chair race will likely become apparent before it’s officially announced. “[Republicans] like to give all the candidates the time to run for school president, essentially,” the source said. “But they’ve been doing that for a year.” McHenry announced he would retire in December 2023.

UPDATED (Nov. 15 2:24 p.m. ET): Updated with information about Barr’s introduction of the Fair Access to Banking Act.