By Sarah N. Lynch
WASHINGTON (Reuters) - An internal U.S. Justice Department watchdog has cleared the agency of using an anti-fraud probe to unfairly target Internet payday lenders, after Republican lawmakers accused the department of trying to push the sector out of business.
In a July 7 letter to Representative Blaine Luetkemeyer, a lawyer for the Justice Department's Office of Professional Responsibility (OPR) said his unit found no evidence that any attorneys engaged in professional misconduct or improperly targeted Internet payday lenders or other lawful businesses.
The Justice Department confirmed the authenticity of the letter, which was posted online by a media outlet.
The probe was launched at the request of Republican lawmakers, including Luetkemeyer, who have been critical of the Justice Department's investigation, known as Operation Choke Point, which aims to choke off fraudsters' access to the banking system.
Lawmakers said the effort stifled lawful business activity. They have held numerous public hearings on the subject, and a group of payday lenders last year filed a lawsuit against bank regulators who were involved in Operation Choke Point.
"OPR also concluded that the evidence did not demonstrate that Operation Choke Point compelled banks to terminate business relationships with other lawful businesses," the report said.
A spokeswoman for Luetkemeyer, a Missouri Republican, did not respond to a call or email seeking comment.
"To the extent that Civil Division attorneys involved in Operation Choke Point investigated Internet payday lending, their focus appeared to be on only a small number of lenders they had reason to suspect were engaged in fraudulent practices," the letter said.
The Justice Department's investigations were conducted under a civil anti-fraud law known as the Financial Institutions Reform, Recovery and Enforcement Act, or FIRREA.
Between February 2013 and August 2013, the civil division's consumer protection branch issued 60 subpoenas, filed three civil actions alleging violations of FIRREA and also made some criminal referrals, according to the letter.
Since August 2013, there have been no new subpoenas, but some civil and criminal investigations still remain open.
Internet payday lenders have complained to Congress that the Justice Department and banking regulators engaged in a campaign to drive them out of business by exerting pressure on banks to terminate their business relationships with the lenders.
In the letter to Luetkemeyer, OPR Deputy Counsel G. Bradley Weinsheimer said that while no wrongdoing was found, his office did find some e-mails in which Justice Department attorneys depicted payday lenders in a "negative light" and disparaged payday lending practices.