Comment by EricaJoy | Hacker News Reader

Comment by EricaJoy | Hacker News Reader

Parent Full thread

My first reaction to this story was outrage, followed by skepticism. The story around Operation Choke Point (OCP) appears to have taken a year long breather (the first story about porn stars losing their bank accounts was reported in May 2013 http://www.cnbc.com/id/100746445), only to resurface with a WSJ article on the subject: http://online.wsj.com/news/articles/SB1000142405270230481090....

The WSJ article was penned by former governor of Oklahoma and current American Bankers Association (ABA) President, Frank Keating. The ABA is a national trade association that represents all banks (source: http://www.opensecrets.org/news/2012/09/capital-eye-opener-s...), essentially a lobbying firm for the banking industry. One wonders why the banking industry would care enough to have the President of their lobbying firm publish a piece about this in the WSJ. Surely a Republican from Oklahoma cares little and less about the financial well being of porn stars.

On the same exact day the WSJ article was published (April 24, 2014), an article written by Jason Oxman, CEO of the Electronic Transactions Association (another lobbying group) was published, also lambasting OCP: http://thehill.com/blogs/congress-blog/economy-budget/204174...

These two articles, if you can call them that, given the authorship, are the only source pieces at the root of the current media interest in OCP.

It's clear (to me anyhow) that the porn stars aren't the story here, they're just the fodder to get the people in a tizzy about OCP. I'm wondering what else is in involved in Operation Choke Point that's making the banking industry and the payment processors call out the big guns. Whatever it is, I imagine large sums of money are involved.

Weird. I looked up Operation Choke Point and you're right, the lead-off stories are from Keating and Oxman, followed by an article in Reason, all suggesting that OCP is a scheme run by DOJ to suppress legal businesses through the banking system.

Then I found a WaPo article saying that OCP was a scheme by DOJ to monitor and constrain fraudulent businesses like payday loans and prepaid cards.

Before your comment, I had no inkling that any of these enforcement actions might have been orginating with DOJ at all. I figured, Chase just doesn't want to service the porn industry. But it looks like that's not actually the case!

My priors indicate that the Democratic DOJ is not actually launching a shadow jihad against porn (of all things) by intervening in the bank system. That's just not a Dem issue. On the other hand, consumer financial fraud is a top-tier issue for the DOJ under any administration, liberal or conservative. Occam's razor suggests the WaPo is probably right-er than some op-ed by a banking lobbyist.

Why are EFF and Reason and the largest bank lobby campaigning against OCP?

Weird! Thanks for pointing this out. I flagged the story originally, but have now unflagged it.

"Why are EFF and Reason and the largest bank lobby campaigning against OCP?"

Because the DOJ shouldn't be using the regulatory bureaucracy to make an end run around congress to close down businesses they don't like that are otherwise legal? What happens if they decide next that they don't like gun shops or abortion clinics or businesses that are owned by <insert discriminated group> here.

If these businesses are doing something wrong then shut them down legitimately under the law or have the law changed to outlaw them but allowing some official in the DOJ to use bank regulation to for them out of business is not right.

If that was the argument, why not make it directly? Why does the EFF frame the problem in terms of "feminist porn" while burying the lede on payday loan scams? It seems increasingly clear that nobody at DOJ gives a shit what kind of porn you watch. They're just tired of auto-billing scams.

Are we reading the same article because I feel like they are making that argument. Payday loans maybe a bad deal but they aren't inherently scams. At any rate if these are scams then why aren't they being addressed through the courts instead of via this extrajudicial method?

Just what are you trying to say here, besides pointing out the banking industry is making a significant propaganda effort right now?

Do you think the industry likes the Federal government using lawless means to force them to stop serving whomever is the target de jure?

Is it axiomatic that banks dealing with large sums of money is bad??? (I kinda thought that was their business....)

If this precedent is established and takes roots, where will it stop? What are your objections to their using the soap box to try put a stop to it?

Can I for once be the origin of a crazy conspiracy theory rather than the annoying guy huffing and griping in the corner and killing everyone's fun?

How about this:

DOJ has launched a project that coordinates with the country's largest banks to constrain and monitor high-fraud businesses; say, porn sites, prepaid cards, and payday loans.

Porn doesn't have a significant lobby.

But payday loans and prepaid cards sure as hell do.

Unfortunately for those lobbies, it's unseemly to write op-eds about how the DOJ and banks are collaborating to suppress the exploitation of poor people.

It is, however, possible to get stories placed about the government's secret plan to create a Morality Police Force to eliminate pornography and, one assumes, any other form of expression the government disfavors.

So they're now "high-fraud" businesses, vs. "fraudulent businesses" (https://news.ycombinator.com/item?id=7671113)?

And this must be some new meaning of the word "constrain" I wasn't previously acquainted with. This "operation" appears to be intended to terminate these "undesirable" businesses with extreme prejudice, and without the pesky Rule of Law getting in the way.

When I called payday loan companies "fraudulent", I was letting my biases show. The more accurate way to describe them is with the phrase I used in my latter comment: a high-fraud business, one that hosts quite a bit of fraud.

So an acceptable solution is "Kill them all, God will know his own"? (https://en.wikipedia.org/wiki/Massacre_at_B%C3%A9ziers#.22Ki...)

If you want to write an impassioned case on behalf of payday loan companies, be my guest. You asked a question: what did the OP mean when it pointed out that this issue was being driven by op-eds from banking lobbyists? I provided a possible answer.

My impassioned case is for the Rule of Law.

Do the ends justify the means?

Investigations and prosecutions of fraud --- OCP includes criminal prosecutions --- are part of the rule of law. Meanwhile, banks profit directly from fraud by collecting transaction fees. The banking lobby wants to convince the government thank the banks will self-police, but the issue at hand is an externality to the banks.

What I'd like to know is, why are EFF and Reason casting this as suppression of pornography? It's the payday lenders and prepaid card scams that are driving the lobbying effort.

You know very well if the DoJ was "containing" problems through legit fraud prosecutions nobody would be raising a huge fuss.

(ADDED: one wonder how many of these prosecutions are legit vs. "the process is the punishment" well nigh unlimited budget DoJ vs. likely small fry.)

It's the lawless abuse of regulatory powers---e.g. why the FDIC is part of the operation---to try to shut down entire sectors of the finance industry that has people figuratively up in arms.

I do not know that very well. In fact, I don't think that's true at all.

Maybe EFF and Reason jumped the gun/got duped?

Given that both explicitly mention payday lenders, I would say not, they're just adding their weight to the current propaganda effort.

The EFF's motive would seem to be obvious; after talking about the porn star situation, they note an online case:

"This is particularly troubling because “pornography” itself is subject to interpretation. While the crackdown currently affects mainstream, prominent performers, it could quickly turn into a bank account ban for radical and feminist porn. We’ve seen examples of this in the past. For instance, Cindy Gallup, who hopes to revolutionize pornography and cultural acceptance of human sexuality through her website MakeLoveNotPorn.com, struggled to find any bank that would do business with her in the United States. Artists of all stripes should be concerned about this unnecessary encroachment on free expression."

And then they immediately segue to Operation Check Point with its less sympathetic victims.

Reason is the the leasing popular libertarian journal of opinion, they have no reason (sorry) whatsoever not to defend payday loan companies and other free market entities our betters frown upon. Their second paragraph jumps right to Operation Check Point and lists these as "undesirable" lines of business it's suspected as attacking, "payday lenders, ammunition sales, dating services, purveyors of drug paraphernalia, and online gambling sites", every one of which they unquestionably defend as a class. Leading off with payday lenders is telling, I'd say.

Don't you find it offensive that you're purposefully misled by the two industries - who prefer to not defend themselves directly and instead use Porn as the innocent victim?

Not at all. The general principle is the defense of the Rule of Law, and of course those fighting for it are going to use the most sympathetic victims as leading examples.

Not that I want to that guy, but...

"If this president is established and takes roots"

Isn't the proper thing to do is for banking to be made an utility service, like gas or electricity, which banks are required by law to provide, as long as the payment is for a legitimate or non-prohibited transaction?

Reply on news.ycombinator.com