Is the DOJ Forcing Banks to Terminate the Accounts of Porn Stars?
April 27, 2014 | 7:55 am
This past Monday, porn star Teagan Presley arrived home in Las Vegas from yet another whirlwind strip club appearance tour and found a letter from her bank.
Chase was closing her account, which was listed under her legal name, as well as the account of her husband.
When Presley went to the bank in person to ask why, she was told it’s because she’s considered “high risk.”
“And then they told me that they canceled my husband’s account too, because our social security numbers are linked,” Presley told VICE News. “They told him that it was because I’m a notorious adult star. Which is funny, because I’m kind of a goody-goody in the business, and I’m not even doing porn anymore.”
This isn’t the first time adult entertainers have claimed that banks were discriminating against them.
In May 2013, CNBC wrote about actress Chanel Preston’s sudden account termination at Los Angeles’ City National Bank, and porn studio head Marc Greenberg’s lawsuit against JP Morgan Chase for violation of fair lending laws. Greenberg wanted to refinance his longstanding home loan, and said a JP Morgan vice president told him he was being declined for moral issues.
A Chase representative told VICE News they have no comment.
Now, news is slowly surfacing that shows the US Department of Justice may be strong-arming banks into banning porn stars.
It’s called Operation Choke Point, and it has nothing to do with deep-throating.
Instead, it’s a targeted effort to shut down as many as 30 separate industries by making it impossible for them to access banking services.
In a Wall Street Journal op-ed Thursday, American Bankers Association CEO Frank Keating wrote that the Justice Department is “telling bankers to behave like policemen and judges.”
“Operation Choke Point is asking banks to identify customers who may be breaking the law or simply doing something government officials don’t like,” Keating wrote. “Banks must then ‘choke off’ those customers’ access to financial services, shutting down their accounts.”
Keating said the highly secretive operation was launched in early 2013. That’s when porn stars started to complain to the media that their bank accounts were being shut down without explanation.
And while the actors are quick to blame banks like Chase and Bank of America for discrimination, those institutions may in fact have no choice.
“If a bank doesn’t shut down a questionable account when directed to do so, Justice slaps the institution with a penalty for wrongdoing that may or may not have happened,” Keating wrote.
And bankers are just as pissed as porn stars.
Even the former chairman of the FDIC, William Isaac, wrote in American Banker magazine this week that Operation Choke Point is “way out of control,” adding that 23 bipartisan members of Congress wrote a letter to the DOJ stating that the operation is driving legal business into the ground. That includes banks themselves.
Camden Fine, president of the Independent Community Bankers of America, wrote a letter to the Justice Department in early April, saying that Operation Choke Point makes it too tough for small community banks to compete with the big chains.
The Justice Department did not respond to VICE News’ request for comment.
Accounts Closed With No Explanation
New York City-based porn star Stoya, famous for being the first “alt” girl to receive a contract with a large production company, told VICE News that she opened a Chase account last year and trouble arose when she tried to deposit her paycheck.
“They came back and asked what Manwin was,” Stoya said in reference to the corporation that owns her production company, Digital Playground. “I told them it was an adult company. They told me my business account was being closed, and then wouldn't give me a straight answer about why they were closing my account.”
Stoya said it came as no surprise that she wasn’t offered an explanation.
“Like any smart company they certainly aren't going to come right out and say that the reason has to do with allowing my genitals to be photographed and videotaped in exchange for money, and they most definitely aren't going to say it in writing,” she said.
California adult entertainment lawyer Michael Fattorosi told VICE News he’s seen this before, but hasn’t found a way to litigate yet, much less account for how many closures have occurred industry-wide.
“We don’t know if Chase may have closed as few as five accounts, or as many as several hundred,” Fattorosi said. “People who are in the industry often don’t like to broadcast that.”
A representative from the San Francisco branch of the Federal Reserve Bank told VICE News that anyone who has a complaint about their bank should contact the Consumer Financial Protection Bureau.
But it isn't just the porn industry that the banks might be regulating.
In 2011, the FDIC listed 30 “merchant categories that have been associated with high-risk activity,” likening pornography to Ponzi schemes, racist materials, “lifetime guarantees,” and sales of fireworks and tobacco.
But it’s Operation Choke Point that researchers say is the force behind banks threatening to close payday lenders’ accounts unless they go out of business.
At a March hearing before a Senate Banking subcommittee, the Washington Post reported, Senator David Vitter (R-La.) said “there is a determined effort, from [the Justice Department] to the regulators… to cut off credit and use other tactics to force [payday lenders] out of business. I find that deeply troubling because it has no statutory basis, no statutory authority.”
Fattorosi told VICE News that bank account closures for sex industry workers are unfair.
“If I’m just a regular Joe that likes to purchase firearms or pornography, my account isn’t going to be closed,” he said. “What they’re basically doing is saying someone’s lifestyle choice is unacceptable. I don’t see where the account holders’ lifestyle choices have anything to do with banking policy.”
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I imagine this would be a pretty big deal to the media if that puritan Ashcroft were still around. But now that Stedman's heading things up... crickets.
