Wednesday, April 23, 2014

Financial Institutions Discriminate Against Clients on the Basis of 'Moral Issues'

DailyMail writer James Daniel first reported on banks refusing bank accounts and loans to porn performers with 'moral issues' as the grounds for termination last summer1 In the article, adult film actress Chanel Preston reported to have tried to open a business account with City National Bank in Los Angeles, only to have it shut down days later due to 'compliance issues'. The manager who originally assisted her in opening the account noted that the bank was worried about the explicit content on her website and decided to close the account.

Similarly Marc Greenberg, founder of porn studio MRG Entertainment, filed a lawsuit against JPMorgan Chase in the Los Angeles Superior Court, alleging the bank violated fair lending laws and its own policy for refusing to underwrite a loan for 'moral reasons'. JPMorgan Chase's Vice-President responded by citing Greenberg's former source of income and ownership of a television production company that produced programs dealing with the subject of human sexuality was reason enough to refuse his loan application.
10. Termination; Availability
We may terminate or suspend this Agreement, or terminate, suspend or limit your access privileges to the Online Service, in whole or part, at any time for any reason without prior notice, including but not limited to, your failure to access the Online Service for a period of three (3) months or greater. The obligations and liabilities of the parties incurred prior to the termination date shall survive the termination of this Agreement for all purposes. Upon termination, you shall immediately discontinue use of the Online Service and delete any applicable copies. 
Not all of the products or services, or functionality of those products and services, described on the Site(s) are available in all geographic areas. Therefore, you may not be eligible for all the products or services described. We reserve the right to determine your eligibility for any product or service. 
(via Chase Online Service Agreement)
The above clause in Chase Bank's Online Service Agreement clearly states that this, and other similar, financial institutions are well within their legal rights to decide to whom they will and will not lend money. It is unfortunately very common for businesses to take the moral high ground in situations such as these, especially when opening a business bank account.

Most recently, however, porn performer Teagan Presley had her personal bank account closed by Chase Bank without sufficient grounds for termination. Presley publicly spoke out against JPMorgan Chase and told XBiz, "They told me that because I am, I guess, public and am recognizable in the adult business, they're closing 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." 2

CLICK the image for a larger view (via @DirectorJoshua on Twitter)

JPMorgan Chase Bank is hitting the porn industry harder than ever and has reportedly issued hundreds of letters to performers informing them of the closure of their accounts on the 11th of May 2014. Directors, models, and performers have taken to online social networking websites like Twitter and Facebook to express their outrage over such discrimination, but it remains to be seen if Chase and other financial institutions will comment on or amend their decision.

Adult industry attorney Michael Fattorosi provided some insight into recent events, telling XBiz that Chase and other banks have "notoriously closed adult accounts or people in the industry's accounts, but nothing like this. Throughout my practice I've had clients that have had their bank accounts closed, once the bank recognizes or determines that they're in the adult industry. I've seen that on numerous occasions. What I've never seen is a bank taking a position and sending out mass letters." He did note that it is yet unclear how many people's accounts were actually shut down.

Until then, porn boys and girls, hide your checks, hide your cash, hide your accounts, because they're closing everything up in here!

'Moral issues' lead banks to refuse porn stars bank accounts and loans (18 May 2013)
2 Chase Bank Slams the Door on More Porn Stars (22 April 2014)

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