Rauch said that was not the credit union's policy.

“It's not that we are getting pressure from the regulator,” Rauch said. “We are required to operate under the Bank Secrecy Act regulation, and back in August, we discovered that our monitoring system needed to be kicked up a notch. We have grown $100 million in three years and at our size, the amount of monitoring for cash intense businesses – the expectation is a little bit higher. In August, we began working on being able to accommodate cash intense businesses no matter what the type of business. It wasn't strictly directed at guns or gun shop owners.”

Schuetz received publicity in conservative media outlets when he traveled to Wash., D.C. to attend a House Financial Services Oversight and Investigations subcommittee hearing on Tuesday. In the hearing, FDIC Chairman Martin Gruenberg testified about the agency's role in Operation Choke Point.

Schuetz' business is located in the Wisconsin district, which is represented by Rep. Sean Duffy (R-Wis.), the chairman of the subcommittee. Cassie Smedile, Duffy's communications director, said the congressman has spoken with Schuetz on several occasions. However, she said Schuetz decided to attend the hearing on his own.

Rauch explained the credit union was not prepared to handle Schuetz' account.

“We made a mistake. We should not have opened the account for Hawkins Guns because we knew we couldn't monitor any cash intense businesses,” she said. “It was quickly closed because it showed up on our audit report. At that time we were manually monitoring.”

Rauch said her credit union purchased the necessary monitoring software to serve members like Schuetz in September of last year.

“Our position all along has been our inability to serve Mike at Hawkins Guns was simply a temporary situation,” she said. “It's not reasonable to think you can buy the software, plug it in and it just works. It takes a little bit of programming.”

In November of 2014, Rauch said Heritage informed Schuetz the credit union could open his account in February of 2015.

“I respect his decision not to open an account with us,” she said. “I think he is probably not happy with the situation as it came about and we let him know in both verbal communication and written communication we are more than happy to help him.”

Rauch said Heritage has not been asked by regulators to close accounts as part of Operation Choke Point. However, she said there are certain requirements dictating when financial institutions have to file suspicious activity reports for consumer and business accounts.

“We've been doing that for many years already,” she said. “There isn't a change for that. It's just our ability to identify all of the suspicious transactions. As far as Operation Choke Point, obviously I think that some businesses like Hawkins Guns, they are feeling pain, maybe more so then we feel it. But, we value the relationships we have with small businesses of all kinds.”

NCUA Public Affairs Specialist John Fairbanks said the NCUA is not involved in Operation Choke Point.

Rauch noted that many of Heritage's employees hunt and own guns.

“For us, that's not what it's about,” she said. “It's about complying with the regulations. At the end of the day, if there's a problem at all, it's with the regulation itself.”

Rauch was asked if her credit union has ever closed a member's account due to requirements from regulators or as a result of Operation Choke Point, to which she replied, “No, we have not.”