Who could possibly threaten a bank over handling financial transactions for sex workers? And what could they possibly threaten the bank with?
Even if it's some big business like Chick-fil-A...
Presumably they only bank with one bank, and presumably the porn and sex work industry has more money at that bank than Chick-fil-A.
How's this actually work? It's not making sense to me.
Have any relevant links?
The SESTA/FOSTA for banking seems to be coming:
https://www.thedailybeast.com/why-sex-workers-are-wary-of-el...
"Warren’s joint effort with Florida Senator Marco Rubio in 2017 to introduce legislation that would enable banks to discriminate against sex worker, known as the “End Banking for Human Traffickers Act.” (Despite bipartisan support Warren and Rubio’s initiative was never voted on by the Senate, but the same bill has been reintroduced this year as H.R.295 - End Banking for Human Traffickers Act of 2019 and just passed the House Foreign Affairs Committee in March.) "
The government. The sex work industry was targeted by the Obama administration under Operation Chokepoint. Banks that dealt with customers the administration didn't like were subject to greater scrutiny and regulatory action.
The government. They do it right out in the open.
> And what could they possibly threaten the bank with?
Shutting down the bank.
The Bank Secrecy Act requires banks to provide "suspicious activity reports" on a wide variety of transactions, which can trigger seizure of funds without convictions. And structuring rules can make do the same to suspiciously-organized <$10k deposits even without evidence of other crime, which has happened to a number of small business owners who by sheer coincidence did that amount of revenue.
Filing those reports can get all of the assets in question seized, and failing to file them or filing them too slowly can incur extremely large fines. So the bank runs the risk of 1. having the funds in question seized, so they don't even get to collect interest, and 2. being fined a large multiple of the amount of money in question any time they overlook an instance. That's not directly involving the bank in anything illegal, but it amounts to "if you handle suspicious transactions, you won't make money on them and can potentially be fined lots of money". It effectively threatens banks for working with anything that looks similar to illegal transactions, even if they know its a different industry. And since the private cash transactions for this sort of work can look like either escorting or drug-dealing...
I suspect it's just fraud, people using stolen credit cards and bank details to pay for porn (because porn can be delivered digitally)
So these accounts disproportionately show up in the fraud department and the fraud department spends more time dealing with those accounts than the profit generated.
Eventually, the bank or payment processor decides it would be less effort just to get rid of the customers causing issues. The moral questions probably means nobody internally feels like defending them.
Usually it’s not stolen credit cards, usually it’s their card but they say it was stolen and try to do a charge back.
Hubby pays for porn.
Wife looks at bill.
Hubby denies it, must have been identity theft!
They demand a charge back since clearly card stolen by unknown porn hound, not innocent hubby.
CONSEQUENCES
Card processors and especially customers of card processors get their accounts flagged for too many returns / charge backs, which cost much more to handle than the original transaction fees compensate for. Rates go from a couple percent to 20%, making business models not work.
Banks that the processor deposited into when card swiped, have to risk manage how much money to hold back from the customer in case 2 months later all the deposits get sucked back out by charge backs. What happens if the bank customer had withdrawn their money?
BAD OUTCOME
Very hard problem, easier to just not deal with sectors that have extreme and unpredictable charge backs.
Do you want your bank associated with that? Do you want to be sued because you benefited from the conduct or financed it?
Unless you can find a bank that only does 1 thing and it happens to be a thing you like, there will always be something to be up in arms about. Maybe not immediately, but always something, some time. Today it's PornHub, tomorrow it's meat, and next year it's oil.