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Why Don’t Banks Want Pornstar Money Anymore?

Why Don’t Banks Want Pornstar Money Anymore?

According to reports, Chase bank has begun sending letters to customers in the adult entertainment and sex worker trade informing them that their accounts will be closed — this is apparently part of a wider effort related to JP Morgan Chase’s morality rules, but why exactly is this happening and is Chase solely to blame?

The most recent news first broke on Perez Hilton’s salacious blog, but has subsequently been confirmed through social media by a number of people in the adult entertainment industry who have posted about having received the letters, and some who have posted pictures of the letters themselves.

The letters they have received, an example of which you can see here, do not appear to give any particular reason as to why the accounts are being closed and seem to be a standard, if rather abrupt, form letter relating of the account’s closure and the necessary grace period so that holders can get their affairs in order.

However, the sheer number of people who have come forward after receiving  such a letter who either class themselves as sex workers or adult entertainment professionals appears to point to some wider agenda behind the closing of these accounts.

This story might not have gained such traction, and it has gone international, had it not been for the fact that Chase Bank has done much the same before, and been sued for it.

Softcore adult film studio owner Mark L. Greenberg had enjoyed a pleasant relationship with Chase: his annual income was more than $500,000 and his net worth exceeded $10 million. He applied for what was by these standards a modest home finance loan after being approached by a senior member of JP Morgan who said it might be a smart financial move. Greenberg, in an as yet unresolved lawsuit, contends that Chase then proceeded to “give him the runaround,” stalling for four months and then saying that they needed to consult financial experts because they had concerns about Greenberg’s employment record. He was eventually told the application was rejected on grounds that, effectively, Chase has an interest in protecting its brand and Greenberg’s employment history runs contrary to that interest.

Greenberg had been very careful to search for a bank that expressly highlighted its commitment to fair lending practices, but resulting from the refusal of the loan he contended in Superior court that JP Morgan Chase had broken both California state law and federal law by refusing him a loan for no other reason than his lawful means of earning a living. Chase contends to this day that it followed the letter of the law and that it is well within its rights to protect its brand.

This isn’t the only incident where Chase’s perceived morality policing has come into question, though. Tiffany Gaines, the CEO of a company called Lovability that sells condoms with a very particular female sexual empowerment message, was told by Chase that they would no longer process payments for her company because, to quote the email she reports receiving, “processing sales for adult-oriented products is a prohibited vertical” because Chase considers doing business with a company that supplies condoms a “reputational risk.” Gaines, however, has decided to speak out about the move because she wants to highlight the irrational stigma that has been put on condoms and, presumably, Chase’s disagreeable morality rules.

Chase actually wrote to a number of adult entertainment professionals last year, informing them that the bank would be closing their accounts. Critics charge Chase has crossed the line from protecting its reputation to apparently rejecting, and some might say punishing, individuals themselves for their choice of profession. The legality of that has been questioned.

Importantly, and although it appears Chase Bank may perhaps be the most virulent in its application of this so-called morality code, Chase isn’t the only bank to have done so. National Bank, among several others, is reported to have closed down the accounts of adult entertainment professionals. So why is this happening?

It appears to stem from federal regulations that were formalized in 2012 whereby the Federal Deposit Insurance Corporation gave notice to the banks that they should be particularly cautious over potential money laundering businesses, and in particular that they should be aware that “certain types of payment processors may pose heightened money laundering and fraud risks if merchant client identities are not verified and business practices are not reviewed.”

This, among other clauses and wider regulations, appears to be the way the banks are justifying their rejections: they are ensuring that they are not lending or supporting people who may be a heightened risk for prohibited practices. While the regulations themselves aren’t technically binding, there is speculation that the Department of Justice is leaning on banks with the threat of heavy penalties if they do not stringently apply these guidelines. As such, it is hard to know where the blame lies as to why the banks feel this kind of discriminatory practice is necessary (or even legal).

As of writing, there has been no talk of further lawsuits against Chase and, for its part, Chase Bank has so far chosen to remain silent on the issue. Campaigners are now keen to find banks that are unashamed of supporting adult industry professionals and their lawful means of income, and so the search is on for so-called “sex positive” banks.

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Photo credit: Thinkstock.

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74 comments

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3:58PM PDT on Aug 1, 2014

They could buy more politicians with it! So they can have "Legal" bail-outs.

5:33AM PDT on May 1, 2014

I can't leave a comment since EVERYONE here has said EVERYTHING that was going through my head while reading this.... Things that make you say what!

4:10AM PDT on May 1, 2014

I think they do this kind of thing routinely to customers for a variety of reasons. I used to have a mortgage with them, and also a credit card. I refinanced my mortgage with someone else for a lower interest rate and within a month, they canceled my card. I believe that it is related. In case no one has noticed, the big banks don't like it when we move away from them. They also don't like small accounts and have tried numerous times to find a way to ruin it for those of us with credit union memberships. They want to stick it to the little people and apparently now want to go all moral! It really is kind of stupid. Sounds like some of these people are pretty rich. Maybe they should form their own credit union. Tell the banks to stuff it like I did.

2:04AM PDT on May 1, 2014

This coming from the people who used taxpayer bailout money to give themselves multimillion dollar bonuses. That and other of their basically illegal actions is why I am moving my money to a credit union.

10:03PM PDT on Apr 30, 2014

Doesn't that amount to a punishable act of discrimination?!!

8:58PM PDT on Apr 30, 2014

THE LAND OF THE FREE..............LMAO LAND OF THE POLICE STATE MORE LIKE!!

5:29PM PDT on Apr 30, 2014

Hey all you pornstars,, just give your money to me,, I'll take it off your hot little hands...

Heh,heh,heh....

5:12PM PDT on Apr 30, 2014

That's hilarious. All of a sudden the bank has a case of the 'morals?' Hahahahahahahaha.

3:42PM PDT on Apr 30, 2014

LMAO -- banking and morality = a contradiction in terms.

Most of the major banks have no ethics, morals, conscience.

3:04PM PDT on Apr 30, 2014

Wow, this just boggles the mind.....
The level of gall this takes is just beyond the pale.
You're (banks in general) corrupt, bottom feeding scum and you won't take money from the porn industry but as we've seen you will take money from drug cartels......

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