Chase Closing Porn Star’s Bank Accounts
Chase is closing accounts because it doesn't like the career their customers have chosen.
Chase Bank has been closing the accounts of porn stars and others affiliated with the adult film industry, and the Federal Government may have something to do with it:
A bank has got hundreds of porn stars hot and fired up after writing to them to tell them their bank accounts would be closed, News.com.au reports.
The move has sparked fury throughout the adult entertainment industry with workers saying they had no idea why they were being targeted.
Chase bank sent letters to industry workers revealing the accounts would be closed next month.
In the letters sent out by the bank, which is a subsidiary of JP Morgan Chase, no reason is given for the closure but an apology is given for the inconvenience.
“We recently reviewed your account and determined that we will be closing it on May 11, 2014,” it reads.
“You may close your account before the date we’ve provided. Your account agreement says that either of us may close your account at any time, without notice and without a reason,” the letter states.
Porn star Teagan Presley said her account was closed and she was turned down when she tried to open another one.
“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 told adult industry site XBiz News.
It was unknown exactly how many workers have been affected, however adult industry lawyer Michael Fattoros said banks had closed accounts belonging to industry workers in the past, though “not on this scale”.
On the face of it, these actions don’t make a whole lot of sense. This situation is entirely different, for example, from the problems that many businesses selling legal marijuana in states such as Colorado and Washington are having in opening bank accounts. In those cases, financial institutions have cited the fact that the business they engage in, while legal under the laws of their state, is completely legal in their home state, it remains illegal in much of the rest of the country and under Federal law. Here, we’re talking about an industry that is perfectly legal. Additionally, the accounts being closed aren’t limited to business accounts that are, say, used to run adult websites, but personal accounts that, at the most, are used to deposit paychecks and pay bills. In one report, a performer who had her account closed said that the account is one she’d had since she was a teenager. While I’m not aware of any law that would prevent banks from, in effect, discriminating against customers based on the business they are in, there’s certainly something about it that seems unfair and heavy handed.
Whatever you might think about the adult film industry, and based on the revenue it garners and the traffic that its websites receive it would appear that most Americans don’t really have much of a problem with it, it’s a legal business. While current banking laws generally only cover discrimination based on race, gender, and religion, the idea of banks being able to deny people access to the banking system based on where they work is troubling. Potentially, it’s something that could be easily abused if, say, a large bank decided to close the accounts of anyone who worked for political candidates that voted against the bank’s interest. If there’s evidence that the accounts are being used for fraudulent or illegal purposes, then certainly a banking institution should have the authority to protect its own interests. There’s no evidence of that here, though, especially not when we’re talking about completely private accounts.
Perhaps not surprisingly, a Federal Government program may be behind the whole thing:
Despite being in good financial standing, adult film performers and others in the porn industry have had bank accounts abruptly terminated—and the U.S. Department of Justice (DOJ) may have had something to do with it.
Under “Operation Choke Point,” the DOJ and its allies are going after legal but subjectively undesirable business ventures by pressuring banks to terminate their bank accounts or refuse their business. The very premise is clearly chilling—the DOJ is coercing private businesses in an attempt to centrally engineer the American marketplace based on it’s own politically biased moral judgements. Targeted business categories so far have included payday lenders, ammunition sales, dating services, purveyors of drug paraphernalia, and online gambling sites.
Jason Oxman, CEO of the Electronic Transactions Association, described Operation Choke Point in detail at The Hill:
The theory behind this enforcement program has superficial logic: increase the legal and compliance costs of serving certain disfavored merchant categories, and payments companies will simply stop providing service to such merchants. And it’s working – 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. Thus far, payday lenders have been the most frequent target. Whatever the merits of payday lending – and there are valid arguments on both sides -it is legal in 36 states. And if payday lenders are today’s target- what category will be next and who makes that decision?
So far, the DOJ is refusing to comment in response to questions regarding whether there is a connection between Operation Choke Point and Chase’s actions with regarding to the adult film industry. Whether that’s the case or not, the program itself is something that we ought to be having more of a conversation about. It’s bad enough if Chase, on its own, is targeting customers for termination based on nothing other than the industry they happen to work in. It’s another thing entirely if they are doing it in response to a government program that is already unfairly targeting people in other completely legal businesses over generalized suspicions of fraud.
It sure looks like someone took a program to try and battle fraud and abuse and went completely off the rails. If you look at this site from the FDIC, particularly under the Risk Control and Due Diligence sections, there’s nothing there about closing accounts without any investigation or oversight. http://www.fdic.gov/regulations/examinations/supervisory/insights/sisum11/managing.html
I don’t know if this is because of overzealousness or incompetence or laziness (probably all three) but this sure has gone in a direction it shouldn’t be going. This is the kind of crap that Congress should be investigating; not having yet another round of Benghazi grandstanding hearings.
I’m betting there is more to this and under further examination will not be as nefarious as it appears. Like the IRS thing, Benghazi, and Fast and Furious.
On the other hand…having a Bank of America account terminated is actually a good thing.
It’s simple. The Obama administration wants to shut down the porn industry. They know they can’t get the Republican House to go along with that, so Obama’s just doing what needs to be done with his pen and his phone.
That’s how they roll, right?
I’m not even seeing “generalized suspicions of fraud” with this. This seems ridiculous on its face.
But those crafty swine at the DOJ really picked a good target here. Imagine the woe! How can anyone in this country enjoy porn that they know the performers of will not be able to store the earnings from in a reputable banking institution? Despite the subtle tyranny at work here, the political will to stop it is going to be embarrassing to muster.
Really, it’s not just the porn industry and it’s not because Obama wants to shut them down. Geez. There’s a long list of industries that have shown themselves to be involved in a lot of consumer fraud. The idea behind this is sound – it’s the implementation that went off the rails. This would be like closing the accounts of the cashier at the payday loan place – it makes no sense.
Bizarre discrimination. Since it’s clear the relationship between the account holders, one smells class action coming. BoA’s remaining customers will pay for that.
See, this is what you get when you vote for a Republican president who is willing to use the government to force his idea of morality on the rest of the country. Oh, wait…
@Jenos Idanian #13:
Right…just like the IRS targeted only Conservative Political Organizations.
Oh wait…that was fictional too.
@Jenos Idanian #13:
Damn all those family-values conservatives and their unwavering support for pornography! Have they no shame?!
@C. Clavin: Hey, Cliffy, just how did Pro Publica get their hands on the confidential tax-exemption applications of nine different conservative groups?
How did the National Organization for Marriage’s confidential tax information get released?
Did you hear that Representative Elijah Cummings (D-MD), who as ranking member gave you so many of your idiotic talking points, had his staff going to the IRS and “requesting” that they investigate True The Vote?
This is actually a pretty good tactic. By picking an industry that pretty much no one will want to defend (Alan Dershowitz, please pick up the phone), they can get a precedent they can then use against other lindustries. For example, Obama pledged to shut down the coal industry when he ran in 2008…
@Jenos Idanian #13:
Blah blah blah…
You can cherry pick talking points all day long.
It doesn’t change the..you know…facts.
You were embarrassed off this site for months because of the same thing.
Didn’t learn anything from that experience, eh?
@C. Clavin: So, I give you three examples, and once again that your arguments are like your skull and your pants: empty and lacking in any substance.
It’s sad that you lack even the rudimentary self-awareness to be embarrassed…
@Jenos Idanian #13: The IRS has admitted to releasing info it shouldn’t have – whether through incompetence or not, we’ll never know. Employees were disciplined for this but you’ll only be happy if they’re taken out and shot and Obama resigns over it so why even bother? You can’t prove they did it on purpose or that the White House had anything to do with it.
I love how you’ve got “requesting” in quotes. It’s because they never requested the IRS to investigate anyone, they merely asked for any public documents available on the group, (It doesn’t surprise me that Rep Cummings would be investigating a group that had many complaints of voter intimidation lodged against it.) But if you can find where the congressman’s office specifically “requested” that they investigate them, please by all means show us. I suspect you didn’t even read the emails.
@beth: Did you actually read the article? The stuff Cummings’ staff asked for was almost word-for-word the info that the IRS asked of True The Vote, and far more intrusive than is normally requested (at least of non-conservative groups).
And Cummings denied that any such contact had happened — at least, until the e-mails surfaced. I don’t think he’s admitted that his earlier statements were “inoperative.”
Much like Obama’s first response that the IRS conduct was “outrageous” and “unacceptable.” That’s no longer operative.
The idea that the government can, without public disclosure and based on subjective criteria, go after perfectly legal classes of businesses in this manner should be disturbing to anyone who cares about civil liberties. That the political climate is such that discussions about this tend to turn into a “debate” over Obama, with all the consequent knee-jerk reactions, is unfortunate. This type of government power affects groups that are associated with both the “left” and “right”.
@Beth,
To that point we need to look at the actual substantive portion of Issa/the Committee’s letter to Cummings to appreciate the “weak tea” that the argument is being based on:
Let’s talk about *facts* versus speculation. It’s a *fact* that Cummings staff made document requests. But as you point out, this is in keeping with the role of congressional oversight. It’s also apparently a *fact* that Cummings did not disclose all of these requests. I don’t know enough about procedure to know if those requests had to be legally disclosed or not.
However, the moment *may* enters into a sentence, we move from the realm of facts to *speculation.* Which means that there is no *proof* that either Cummings was connected to an investigation or even the fact that True the Vote received any additional scrutiny. Likewise, the goal of “raising concerns” is to actually lead to proving concerns. Again, Issa’s committee has been long on concerns short on proof.
The problem is that Issa’s investigations have been filled with a lot of “may” accusations that never seem to be ever be proven.
@Jenos Idanian #13: So they didn’t request the investigation and since you can’t back up what you said, you change the subject to yet another imagined slight the Obama administration has rained down on you. Got it.
ETA – and no I didn’t read the article. I read the actual emails that purportedly “request” the investigation. I suggest you do the same.
@Jenos Idanian #13:
For a while, I thought it was quaint that so many people seem to believe that massive bureaucracies are agile enough (and willing) to respond to managerial direction from the temps who ‘run’ them. Like most infantile behaviors, though, it has quickly lost its cute charm and simply become annoying.
Given their track record of fraud and financial crime, it would be reasonable to include “member of Congress” on the hit-list of occupations. At which point, the problem would be solved pretty quickly…
@Matt Bernius: Yeah, it’s all a lot of “may.” There’s no concrete proof. The kind of proof that an investigation might uncover.
The kind of investigation that Cummings has been fighting tooth and nail, that Holder has been fighting tooth and nail, the kind that Obama has been fighting tooth and nail. The kind that Lerner fought tooth and nail until she was allowed to retire with full benefits.
So, in order to justify an investigation to find out the truth, we need to prove the truth beforehand? Nice little catch-22.
There are a whole host of ‘mays’ here, and a cornucopia of astonishing coincidences that all seem to play out to the Obama administration’s advantage. But we can’t investigate to prove if it’s all coincidence or deliberate action because first we have to prove that it’s deliberate action, right?
@Jenos,
These investigations have been going on for years. Being fought tooth or nail or not, they continue to turn out nothing. And one has to being to wonder why getting actually facts is so hard despite all the powers of a Congressional Committee and the various Inspector Generals involved. There’s constant smoke, but no fire.
And the bigger issues here is you continue to present “mays” and “concerns” as *facts* and when this is pointed out, you just shift your argument without addressing the core issues (and the continuing lack of evidence).
@Matt Bernius: These investigations have been going on for years. Being fought tooth or nail or not, they continue to turn out nothing. And one has to being to wonder why getting actually facts is so hard despite all the powers of a Congressional Committee and the various Inspector Generals involved. There’s constant smoke, but no fire.
Let’s see… we finally have Lerner’s e-mails, and those produce even more smoke. We have Lerner refusing to testify. We have repeated cases of only conservative individuals and groups having their legally-confidential tax records being leaked. And we have the ranking member of the Committee lying about his office’s involvement in the matters at hand — when he’s not trying to shut down the investigation by any means necessary.
Kindly show me the rule that says that one side can 1) choose to “run out the clock” as their strategy, then 2) announce that the clock has run out, when 3) there was no clock in the first place.
But back to the actual story here… like I said, it’s battlespace preparation. It’s about setting a precedent. Next up are the “environmental criminals” or the Koch brothers or some other group the administration doesn’t like.
@Jenos Idanian #13:
@Matt Bernius:
Would you both agree that immunizing Lerner to get her testimony is the serious way to find out what actually happened?
@rudderpedals
Without a doubt. If the committee actually wanted expedited answers, immunizing Lerner would be a great tactical first step.
@rudderpedals: Would you both agree that immunizing Lerner to get her testimony is the serious way to find out what actually happened?
THE serious? No.
ONE serious? Yes.
Lerner has a history of targeting conservatives that dates back to her days in Clinton’s FEC. Plus, she was allowed to retire on full pension. I don’t mind if she gets a few more sticks waved at her before offering the carrot — if at all.
@Matt Bernius: I suspect Issa already knows he’s not going to get the answers he wants and will never agree to immunize Lerner.
@Jenos Idanian #13:
3 cherry picked examples that you copied and pasted from Breitbart or Daily Caller or some other wingnut site which have nothing to do with the facts.
I thought you might have gotten better at this up while you were gone. But no. Same old Jenos. BS…BS…and more BS.
@C. Clavin: Cliffy, I gave you three examples, and you got nothing. Just like you got nothing on the actual topic of the thread, just like you got nothing in your head. You go keep chasing your own squirrels.
Hell, I even threw you a bone by bringing in the Koch brothers, and you didn’t even give it a sniff. Were you always this pathetic, or have I forgotten just how lame you were?
@Jenos Idanian #13:
And again, that entire response again makes it abundantly clear that you care far more about *getting people* than actually getting to the bottom of these issues (i.e. proving the grand conspiracy).
If there was some *grand conspiracy* here, it’s difficult to see how immunizing Lerner wouldn’t provide the most effective route to the facts — especially considering that the general opinion of the legal community is that the entire contempt of congress based on her opening statement is not going to fly in court.
BTW, if you wonder why people don’t particularly respect you or the basis your positions, I think this thread (culminating in that response) offers a lot of explanations.
@Jenos Idanian #13:
No, we have Lerner refusing to become the Republicans’ Beltane sacrifice this year. She has repeatedly said that she would be happy to testify — with immunity. If you’re really after the truth, you should jump at that offer. So it must not be the truth that they’re after.
Edit: OK, I should have read to the bottom first. Others have covered this ground.
Either it’s a conspiracy — in which case immunizing Lerner lets you get at it — or it’s not, which case the last thing you want is Lerner’s testimony showing that it was a local bureaucratic snafu.
@Matt Bernius: And again, that entire response again makes it abundantly clear that you care far more about *getting people* than actually getting to the bottom of these issues (i.e. proving the grand conspiracy).
Yeah, bad me — I like it when people who do bad things get punished. Lerner has a lot to atone for.
But apparently you missed when I said that I still favor granting her immunity — but as a last resort. And there are a few angles that can be played out first. For starters, her pension…
@Jenos Idanian #13: You want to take away her pension based on some unfounded, unproven suspicions you have? Why not just waterboard her? I’m sure she’ll talk plenty.
@Jenos Idanian #13:
Acceptable position — but then you need to also accept what comes with it. So stop moaning about the committee being prevented from proving the grander picture when you are advocating taking steps that will hinder that process in the name of “punishing” the guilty.
As Dave Schuler wrote earlier this week:
Looking to the crystal ball (based on the part performance of Issa’s committee) I have the following predictions: Two years from now, none of the “other options” have worked. No significant new information has come out on this. The window will completely pass to immunize Lerner. And two years from now you will continue to whine on about the reality of all of these *scandals* and how the administration managed to victimize all of us while holding no more actual proof than you have today.
The net result: No scalps will be taken at all. No connection to the administration will be found. And the courts will throw out the contempt of congress charges and Lerner will still have her pension.
Welcome to immature governing.
@beth:
Hannity is now backing up Palin on Waterboarding.
He once famously volunteered to be water-boarded…but then chickened out…as Republicans are wont to do.
Jenos just plain refuses to the learn the lesson he was taught when Benghazi made him a colossal fool.
@beth: This post sounds about right. They’re probably trying to target fraud or some other undisclosed illegal activity, but appear to be hitting the wrong people.
There’s no evidence the DOJ has anything to do with this.
Key question: Why is Chase the only bank doing this? If it was a government-inspired action, why haven’t other banks done the same? Chokepoint thus far has issued subpoenas to many, many banks in the effort to go after illegal online lenders.
And going after personal accounts is far different from the targets of Operation Chokepoint thus far, which have been illegal online lenders (though the industry claims it impacts the legal ones as well).
It seems odd to assign blame to the DOJ for this without knowing more.
Hmm. Since we all know he is an iron-fisted dictator, there is the mystery of why everyone in the porn industry has not been locked up, and why you can still get porn if you want to.
Being a tyrant just ain’t what it used to be.
@ Jenos
Why is this man trying to destroy your sex life? It’s so unfair…
@Jenos Idanian #13: I singled out immunity as the way because it’s headed towards passage of a highly questionable (thanks to the self incrimination assertion) House contempt resolution that’s not likely to loosen her tongue.
I wasn’t aware of the FEC history. You know if she gets use immunity I’m pretty sure she can be compelled to talk about that too.
@Jenos Idanian #13: Going after her pension sounds like a bill of attainder 🙁
@mantis: The information is coming from Reason. Of course they come up with a bogus claim of government “engineering”, that’s what propagandists do.
So wait. The DOJ was given the power to effectively impose massive fines on those doing business with industries they don’t like. And we’re … surprised that this power might be abused?
@Hal_10000:
The DOJ was given the power to effectively impose massive fines on those doing business with industries they don’t like.
No, the DOJ is fighting fraud by going after businesses that work with and profit from the fraudsters. There is no evidence this has anything to do with that. It is entirely baseless speculation.
If you read this, you may understand better, but given your knee jerk reaction about “industries they don’t like,” somehow I doubt it. Key passage:
I missed this earlier, but you didn’t mention whether Chase Bank had commented or refused to comment to anyone about this. XBiz appears to be the only media outlet who’ve asked them to comment.
@mantis:
Linking to the DOJ’s claim of what the program is intended to do is not an argument; it’s obeisance. I could also link you to government claims that their enhanced interrogation program was totally not torture and completely legal and didn’t exist anyway. Asset forfeiture programs are targeted at drug dealers hit snare innocent people. Structuring laws aimed at money launderers sometimes hit a family business. Programs to share military hardware give assault vehicles to small town cops.
All government programs claim nobel intentions and insist they will be free from abuse. What the government claims about these programs is one thing; what they actually *do* is frequently another. If this is the Choke Point program (and it may not be), which is only a few months old, I think it needs to be revisited.
(And even on its own merits, the program is dubious. If people are committing fraud, go after the fraudsters. Don’t go after the banks and effectively impose fines on these business because you think they might be engaged in fraud without, as far as I can tell, not even a hint of judicial review. This is just an expansion of the already abusive and abused structuring laws.)
Just as disgusting as it was for the wingnuts to constantly back Bush and Cheney no matter what the phuck ups (see Jenos, Exhibit A), its just as disconcerting for Dems to back Holder, a huge disaster at the DOJ.
This guy has busted pot clinincs, deported more aliens than any other admin, spies on citizens at an unprecedented rate etc.
Stop rationalizing obvious bad policy choices by this Wall Street connected former counsel at Covington and Burling, one of the most blue blood and connected firms in DC.
He should have been let go years ago.
Obama, one of the most disappointing Presidents of modern times.
@Hal_10000:
So what, since laws can be abused, we should have no laws?
Linking to the DOJ’s claim of what the program is intended to do is not an argument; it’s obeisance.
Really? Linking is obeisance? Do explain.
Keep in mind my linking to a description of the effort was a response to your fact-free assertion that the DOJ can “impose massive fines on those doing business with industries they don’t like.” It’s actually businesses that break the law, but details are unimportant when you’re carrying a pitchfork.
What the government claims about these programs is one thing; what they actually *do* is frequently another.
Agreed. And it’s much easier to claim they are doing stuff with no knowledge of it than to insist on facts. You are, of course, free to take the easy way.
If people are committing fraud, go after the fraudsters.
You reveal a deep lack of understanding of these issues. First of all, the banks have legal responsibilities here that some are not complying with. Second, most such fraudsters are overseas. The reason they approach this problem through the banks is there are no other avenues, and banks have legal responsibilities.
ose fines on these business because you think they might be engaged in fraud without, as far as I can tell, not even a hint of judicial review.
You aren’t aware because you maintain willful ignorance. The DOJ takes the banks to court, like they did with First Bank of Delaware, as described in the link you decided not to follow, but claim is an example of my obeisance. You have no interest in facts or reality, just baseless assertions and the resultant outrage. It’s quite childish. Grow up.
“impose massive fines on those doing business with industries they don’t like.” It’s actually businesses that break the law, but details are unimportant when you’re carrying a pitchfork.
i did read the link. I should have said “effectively”. By closing off bank accounts, this imposes a burden on people who have not necessarily violated the law. And it does so under threat of fining the bank. The prosecution of banks who ignore fraudulent activity would be justified … if you can show it is fraudulent and not “seems fraudulent” because it meets Criterion X.
The reason for my alarm is that the program that has been created bears an eerie similarity to the government structuring laws that have made structuring itself a crime, even if the money involved is legal and seized money from completely innocent people. The logic is similar: criminals structure bank deposits to conceal criminal wrong-doing; therefore structuring proves criminal intent. Fraudsters have high credit rejection rates; therefore high credit rejection rates show criminal activity and banks should refuse to do business with anyone with high rejection rates.
The downfall of this is pretty obvious. Again, we don’t know that this particular incident is a result of Operation Choke Point. But it’s not difficult to imagine an industry like porn incurring a high fraud rate because of buyer’s remorse on the part of people who use it or people using someone else’s credit card to buy their porn. It’s not hard to imagine — like assert forfeiture and structuring laws — this coming down on people who have high rejection rates for reasons that aren’t their fault (e.g, a business in a high crime area or legitimate businesses that scammers use to test stolen credit cards).
The record of the DOJ when it comes to these matters had not earned them a lot of trust and should not.
Anybody else amused at the thought of a big bank canceling the accounts of people who fvck people for money?
Adult stars can probably legally sue Chase for attempting to illegally enforce religious law. Since their line of work is not illegal, Chase is using their own view of morality to deny some bank account services which seems to a violation of religious discrimination laws. Funny, that Chase thinks some people are so immoral, but has no problem foreclosing homes or cars from those who had health problems and were late paying their bills, and this is not immoral to these banker’s mentality.
TMZ reports that Wells Fargo is more than happy to welcome the performers who Chase dumped:
Chase hasn’t explained their actions, but Wells Fargo’s response doesn’t really suggest a government crackdown on porn bank accounts.
@mantis: This sounds like some over-zealous underling at Chase interpreting someone else’s memo about “caution” and deciding it’s all so much safer if they do “outright ban”.
Sort of the logic some eager-beaver wet-behind-the-ears business major would think. Ok, I’ve been hired to minimize risks and make our due diligence very effective: The easiest way to do Due Diligence is never to lend to anyone, right? So you never have any risks?
(You don’t have any income either, but that’s not the business major’s problem….)
P.S. My own experience with Chase indicates they’re a big, slow-moving behemoth that mindlessly operates according to “written policy” no matter how stupid or inconsistent the policy is. I’ve been going through a refinance and the whole process has been considerably delayed because my situation is more complex than what they have laid out in their handbooks and they can’t figure out what pigeonhole to put me in.
@mantis: i dunno, could be part of this from 2 weeks ago.