Chase Bank exploiting FDIC warning to close accounts of adult entertainers, sex workers
Chase Bank sent hundreds of letters this week to account holders who work in the adult entertainment industry informing them that they have until May 11 to close their accounts and find another bank.
XBiz.com, an industry newsletter, reported on workers who received the notices, including performer Teagan Presley.
“I got a letter and it was like please cancel all transactions, please fix your automatic pay account and make sure everything’s taken care of by May 11,” Presley told XBiz. “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. Even though I don’t use my account, it’s my personal account that I’ve had since I was 18, when it was Washington Mutual before Chase bought them out.”
Gossip blog PerezHilton.com posted a copy of one of the letters that read, in part, “We recently reviewed your account and determined that we will be closing it on May 11, 2014. Please accept our apologies for the inconvenience. We want you to have enough time to complete pending transactions and open an account at another bank.”
In March, Chase Bank refused to process transactions by the pro-woman condom company Lovability, claiming that doing business with “adult”-oriented companies poses a “reputational risk” for the bank.
Lovability CEO Tiffany Gaines blasted the decision, writing, “I am deeply saddened and quite surprised by this. There is nothing ‘naughty’ about my company’s mission of empowering women to take responsibility for their sexual health.”
In the end, Chase agreed to handle Lovability’s business, but still the bank lists condoms in its category of “adult” products.
XBiz quoted an angry tweet by performer Dakota Skye who wrote, “#Chase has f*cked with people before with other issues. Should not get away with sh*t like this.”
Apparently, Chase isn’t the only bank attempting to financially disenfranchise adult entertainers. Presley told XBiz that Bank of America turned her away when she attempted to open a new account.
Kitty Stryker at The Frisky wrote, “Of course, it’s not just Chase. Performer Chanel Preston found her account through City National Bank was shut down suddenly one day, the bank citing only “compliance issues.” The founder of soft porn studio MRG Entertainment, Marc Greenberg, filed a lawsuit against J.P. Morgan after they refused to let him refinance a loan because of his job. “JPMorgan purports to be so ashamed of nudity and human sexuality that it cannot process a refinance of a home loan of plaintiff, secured by plaintiff’s house, because plaintiff’s source of income six years ago included production of television programs that contained nudity and human sexuality.”
“This speaks to a concerning trend where banks are empowered to grant access to funds, to credit, to loans, based on their political values,” Stryker continued. “As financial institutions are the realm of the privileged and the conservative, this doesn’t bode well for sex workers past and current, for immigrants, for people of color, or for trans people.”
Banks like Chase are exploiting leeway granted to them by the FDIC in 2012. The advisory body cautioned banks against doing business with third-party payment processors, which are often used by money launderers to conceal money made from criminal activity.
“Examples of telemarketing, online businesses, and other merchants that may have a higher incidence of consumer fraud or potentially illegal activities or may otherwise pose elevated risk include credit repair services, debt consolidation and forgiveness programs, online gambling-related operations, government grant or will-writing kits, payday or subprime loans, pornography, online tobacco or firearms sales, pharmaceutical sales, sweepstakes, and magazine subscriptions,” said the FDIC warning. “This list is not all-inclusive.”
“In short,” said Carter, “Chase relied on a footnote to two-year-old regulatory guidance on being careful about fraud to reject Lovability’s application” as well as the bank accounts of workers whose professions the bank deems immoral.
[image of banker recoiling from money via Shutterstock.com]