An Exercise in Irony: Banks Throw Adult Entertainers Under the Bus
Major financial institutions have started shutting down the accounts of adult entertainers for no apparent reason. Despite the fact that those affected are in good financial standing, it seems that the only commonality between them is the fact that they work in the pornography industry. It appears that the account closures may be happening after the banks are receiving heat from the U.S. Department of Justice, in an attempt to undermine legal businesses that may not be in compliance with the its own moral judgments. Coined Operation Choke Point, the practice is not only legally questionable, but an eerie attempt at governmental overreach.
The complaints against the banks started with closed accounts at Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC), and have even included online transaction site Paypal (NASDAQ:EBAY). Actress Chanel Preston told Al Jazeera that her accounts City National Bank were terminated, and she couldn’t get an answer as to the reason. “When I went to deposit my check, my account had been shut down,” she said. “I asked, ‘Is it because I do porn?” She didn’t get an answer.
Actress Teagan Presley experienced something similar when Chase sent her a letter asking her to terminate all of her account activity. “I called them and they told me that because I am, I guess, public and am recognizable in the adult business, they’re closing my account,” she said. It doesn’t stop with Presley, as Chase has reportedly gone on to close the accounts of hundreds in the adult entertainment business.
So what is the motive behind Operation Choke Point? Jason Oxman from The Hill writes that suffocating the financial transactions between parties in industries seen as unfavorable is the DOJ’s way of attempting to disable them. “Payments companies across the country are cutting off service to categories of merchants that – although providing a legal service – are creating the potential for significant financial and reputational harm as law enforcement publicizes its activities,” he writes.
The whole operation is a childish attempt to force a standard on a industry that many frown upon. Operation Choke Point does beg the question as to why these banks, who have been prone to incredibly immoral behavior, take the moral high ground when it comes to the porn industry? Of course, it’s unclear what kind of pressure these institutions are under from the DOJ, but considering that the recent financial crisis was triggered by reckless business practices and fraud, are these companies really in a place to cast judgment on another industry?
While part of the logic behind closing the accounts of adult entertainers is that they can be labeled as risky, the truth is that pornography has been one industry that was seemingly untouched by recession, and brings in $57 billion in revenue worldwide annually. That’s a lot of transactions and lines of credit that banks like Chase are cutting out of their business, and a lot of lost revenue on their part. It seems that playing the part of the morality police comes with a price.
It is important to take into account that as private institutions, banks like Chase and Wells Fargo are not bound to do business with anyone. As long as they remain on the right side of discriminatory practices, the judgment as to who they choose to keep as a customer is, and should remain, their own call. But blacklisting an entire industry from the financial system, in what really comes off as nothing more than a public slutshaming, is petty and unprofessional. Although right now the it’s the adult industry in the cross-hairs, who could the DOJ and the banks decide they don’t like next?
While the DOJ does have the banks in a bit of a bind by threatening penalties for not complying with its orders, it’s difficult not to see the irony in the whole situation. After so much irresponsible behavior, financial institutions are now drawing the line in the sand between what’s morally acceptable or not.