We’ve seen unprecedented attacks against “disfavored” industries going back to the Obama years. Naturally, firearm sales and related commerce – activities that are constitutionally protected – fell into category of targeted businesses. The Obama era Operation Choke Point used the power of the federal government to “encourage” banks, insurers and other service providers.
Today we’re seeing a resurgence under the Biden-Harris banner with Operation Choke Point 2.0. As a way to combat the continued bias in banking, the State of Wyoming sought to charter banks where they would be unmolested by the federal government, and that’s resulted in the formation of state chartered Custodia Bank.
I had a chance to chat with the CEO of Custodia about the bank as well as litigation that’s currently underway with the Federal Reserve. Custodia’s CEO, Caitlin Long, is a veteran of Wall Street who was raised in Wyoming. Long brings with her many years of experience in the financial industry and has had involvement with crypto currencies dating back to as far as 2012.
“Our company adamantly believes banking should not be politicized, that fights over access to banking should[n’t] be fights over political issues,” Long said during our interview. “Rather, [political issues] should be fought out in legislatures, but not through bank regulation. And we’re living that philosophy.”
The bank launched a few months ago, but what’s Custodia all about? “We specifically specialize in digital assets,” Long said of the bank’s inception. “But, the history is that the state of Wyoming supported the idea of creating a new type of state chartered bank, in part because the firearms industry was being de-banked as a result of Operation Choke Point version 1.0, and version 2.0 has begun. It’s under the same chairman of the FDIC, Martin Gruenberg.”
The firearms industry is big in Wyoming, so seeing a move like this isn’t all that shocking. Wyoming has embraced several more libertarian ways, severing themselves from the federal government in more ways over the last few years.
A notable example of that was Wyoming’s Food Freedom Act, signed into law in 2015. The act allows direct-to-consumer sales from producers with minimal government intrusion. The act was expanded in 2020 and again in 2023, further removing federal regulatory fingers from Wyoming’s food producers and customers.
Wyoming has leaned toward less government intrusion and having an unbiased bank get chartered within only makes sense.
Long talked quite a bit about the lead-up to the launch of Custodia Bank, the current status, and wrangling that was done to get the bank positioned for launch. When asked about other areas of focus, she explained the bank isn’t a lending bank, but rather a fee-based depository one. “We serve U.S. dollars for lawful businesses. And we also provide custody services for Bitcoin,” Long told Shooting News Weekly. “So it’s both U.S. dollars…U.S. dollar banking for lawful businesses, and then Bitcoin custody.”
Custodia is involved in litigation with the federal government concerning the bank’s formation. Long explained the crux of the suit, Custodia Bank Inc v. Federal Reserve Board of Governors:
“The litigation is a dispute over whether the states have the right to charter banks without federal permission. And it’s specifically a dispute over the monetary Control Act of 1980…the monetary Control Act of 1980 set it up so that a validly chartered depository institution shall get access to the payment system. And the Fed is fighting that and that is the question in front of the court specifically, if you want the statutory reference, it’s 12 USC 248 A versus 12 USC 342. And the question is, does the Fed have discretion to deny a validly chartered state chartered bank.”
Long was asked if she thought the case would end up in Circuit Court considering the players involved.
“We’ll see potentially, I can’t speculate on that. One thing I will say is, it will not be just the digital asset industry cheering if there’s a favorable outcome for us in this horse in this journey, because other industries, like the firearms industry, are watching this and understand that the the political overreach of federal banking regulators, which has hurt this industry, going back to Operation Choke Point 1.0, it’s back with Operation Choke Point 2.0…and until the court system has determined that these actions are lawful or unlawful, then I think these battles will continue.
“It may be worth noting that there was litigation over Operation Choke Point 1.0 against the FDIC. And originally, the FDIC denied that it was putting pressure on banks to close bank accounts in the disfavored industries that were ultimately 30 different industries that Operation Choke Point 1.0. It started with payday lenders and of course, it ended up including the firearms industry, dealers, manufacturers, ammo manufacturers…it went across the board. And there was litigation against the FDIC back in I think 2015 or 2016. And the FDIC has formal statements denying that it was putting pressure on banks, [which] were proven wrong when the litigants got it into discovery and found evidence that the FDIC was indeed pressuring banks to close the accounts of the disfavored industries. And the FDIC settled that lawsuit and agreed not to do it again.”
The latest news on the case is that the judge issued an order vacating the trial setting noting:
“The Court has had the opportunity to digest a substantial portion of the summary-judgment briefing and expansive materials submitted by all parties. Based upon this review, the Court currently does not find a decision on the merits depends on a disputed material fact, and the claims and issues can be resolved based upon the extensive record currently before it.”
The order continued, “A decision on the merits will be issued forthwith.”
The battle that Custodia Bank is fighting isn’t just about banks, crypto, or the firearm industry. This is about the federal government’s continual thirst to control every aspect of our lives and crush anyone or anything they disfavor or find to be a threat to their power.
People like Caitlin Long, who say that they “like blued steel, brass, and Bitcoin,” see these attacks for what they are…attacks on the American individualism that forged this nation and has since become public enemy number one. We’ll be following this case and Long’s journey with Custodia Bank.
John Petrolino, The Pen Patriot, is a US Merchant Marine Officer, writer, author of “Decoding Firearms: An Easy to Read Guide on General Gun Safety & Use,” a USCCA trained instructor, and NRA certified pistol, rifle and shotgun instructor. Petrolino is living under and working to change New Jersey’s draconian and unconstitutional gun laws. You can find him on the web at www.thepenpatriot.com on Twitter at @johnpetrolino on Facebook at https://www.facebook.com/thepenpatriot/ and on Instagram at @jpetrolinoiii
2 Responses
Good work Jon, I did not know of there existence. Thank you for the Information. Keep up the good work.
Good to know- thanks.