The DOJ and Denial of Credit Card Services to Gun Related Businesses

[ZigZagZeke]

http://reason.com/blog/2014/04/28/doj-operation-chokepoint-and-porn-stars

Under 'Operation Choke Point,' the DOJ and its allies are going after legal but subjectively undesirable business ventures by pressuring banks to terminate their bank accounts or refuse their business. The very premise is clearly chilling—the DOJ is coercing private businesses in an attempt to centrally engineer the American marketplace based on it's own politically biased moral judgements. Targeted business categories so far have included payday lenders, ammunition sales, dating services, purveyors of drug paraphernalia, and online gambling sites.

"Operation Chokepoint is flooding payments companies that provide processing service to those industries with subpoenas, civil investigative demands, and other burdensome and costly legal demands," wrote Jason Oxman, CEO of the Electronic Transactions Association, at The Hill.

The theory behind this enforcement program has superficial logic: increase the legal and compliance costs of serving certain disfavored merchant categories, and payments companies will simply stop providing service to such merchants. And it's working—payments companies across the country are cutting off service to categories of merchants that—although providing a legal service—are creating the potential for significant financial and reputational harm as law enforcement publicizes its activities.

Thus far, payday lenders have been the most frequent target. ... And if payday lenders are today's target–what category will be next and who makes that decision?

I'm not sure who made the decision, but it seems the next big targeted category is the adult film industry. Last week, adult film actress Teagan Presley and an unknown number of others in the porn industry received notices that their Chase Bank accounts were being abruptly terminated.

Is this why so many gun dealers have been notified that their credit card services have been terminated?

Targeting porn performers or not, Operation Choke Point represents an incredible abuse of regulatory power. In a recent American Banker op-ed, former Federal Deposit Insurance Corp. Chairman William M. Isaac called it "a direct assault on the democratic system and free-market economy."

In a March 2013 hearing before a Senate Banking subcommittee, Sen. David Vitter (R-La.) pointed out the obvious: that DOJ has "no statutory authority" to be doing this. But why bother with statutory authority when you can just secretly strong-arm highly regulated businesses into doing what you want?

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[cookie]

Cash talks ,well at least for those who can count change.Most people these days aren't bright enough to understand totalitarian government.

 

[Hawaiian]

They did it with online cigarettes sales. The DOJ twisted the credit card companies arms to not accept charges for online cigarette sales. It worked and I hade to pay with a check to order from the Indian shops. Then the DOJ pressured FedEx and UPS to not ship them. It worked. The USPS told them to stuff it. Then Congress passed a law to stop the USPS. States with a high Tabaco Tax were not getting their cut and they did not like it.
If enough states ever add a high enough ammo tax, you can expect to see this scenario repeated.

 

[8ball]

Interesting article. The DOJ's original target was payday lenders, and now it's porn stars and ammunition sellers?

Is there any evidence of an ammo provider being caught up in this? I couldn't find anything specific.

 

[ZigZagZeke]

Interesting article. The DOJ's original target was payday lenders, and now it's porn stars and ammunition sellers?

Is there any evidence of an ammo provider being caught up in this? I couldn't find anything specific.

It is apparently mostly one payment gateway company:

http://www.creditcards.com/credit-card-news/card-payment-gun-sales-1282.php

 

[The Heretic]

That's okay - I pay cash anyway. Then they don't have to pay the payment services fees.

 

[8ball]

That's okay - I pay cash anyway. Then they don't have to pay the payment services fees.

Sure, but many would still go out of business because only 25% of buyers pay cash these days. Plus mail order and Internet sales would fold completely.

 

[sailorfej]

Operation Choke Point (google is not really your friend but is useful)

It is not just Ammunition sales, it is also several other "undesirable" industries, including firearm sales, under the cover of going after scammers. The official list is here about halfway down the page:
http://www.fdic.gov/regulations/examinations/supervisory/insights/sisum11/managing.html

and it is not just payment processors they are also pressuring banks, not to do business with customers in these industries.

Following is couple of good articles on how they are using regulatory pressure and compliance investigations to pressure financial institutions to disassociate with customers in the targeted industries.
http://www.americanbanker.com/bankthink/operation-choke-point-way-out-of-control-1067013-1.html
http://thehill.com/blogs/congress-b...ation-choke-point-harmful-to-flow-of-commerce

It is easy to say that "I'll just pay cash" but what happens to your local gun store/manufacturer when they are no longer able to have a bank account?

This has attracted the attention of the NRA and some members of congress, but given how the IRS Tea Party targeting continued even after the congressional investigation started, it still could have a significant impact on the gun industry, unless the DOJ backs off.

 

[Swedish K]

I guess if you want to open a new business in the targeted industries you might want to use a benign name like "Alpha Tool and Machine" instead of Alpha Arms

 

[ZA_Survivalist]

Seriously, use cash.
Folks shouldn't buy things they cant afford in the first place.

However, that in no way excuses the DOJ and credit card companies. Yet another example of tyrannical subjugation and ostracization of a specific target group.

I let most "equal rights" folks know that firearms owners and smokers are two of the most genuinely oppressed groups in the US today and that the primary LGBT equal rights woes pale in comparison.

They usually give me a deer in the headlights look when I begin to give them examples and facts.. Its hilarious.. It overloads their little progressive brains
(for MOST of those equal rights sticker rocking folks are incredibly socialist low information sheeple)

 

[The Heretic]

Operation Choke Point (google is not really your friend but is useful)

It is not just Ammunition sales, it is also several other "undesirable" industries, including firearm sales, under the cover of going after scammers. The official list is here about halfway down the page:
http://www.fdic.gov/regulations/examinations/supervisory/insights/sisum11/managing.html

and it is not just payment processors they are also pressuring banks, not to do business with customers in these industries.

Following is couple of good articles on how they are using regulatory pressure and compliance investigations to pressure financial institutions to disassociate with customers in the targeted industries.
http://www.americanbanker.com/bankthink/operation-choke-point-way-out-of-control-1067013-1.html
http://thehill.com/blogs/congress-b...ation-choke-point-harmful-to-flow-of-commerce

It is easy to say that "I'll just pay cash" but what happens to your local gun store/manufacturer when they are no longer able to have a bank account?

This has attracted the attention of the NRA and some members of congress, but given how the IRS Tea Party targeting continued even after the congressional investigation started, it still could have a significant impact on the gun industry, unless the DOJ backs off.

Oh I agree - I was being flippant.

This is what happens when you give someone power - they abuse it.

Give the gov. permission to make societal judgements and implement policy based on those judgements, and this is what happens - policy is implemented to encourage social agendas that gov. has no business getting involved in. Whether it is criminalizing people taking drugs, marrying someone of the same gender, marrying more than one person, adultery, owning arms, having an "offensive" political opinion and voicing it, etc., using the power of government to implement social agendas like this results in more harm than good and usually infringes on peoples rights.

Both conservatives and liberals support using government power this way, they just support different policy agendas.

 

[The Heretic]

Seriously, use cash.
Folks shouldn't buy things they cant afford in the first place.

However, that in no way excuses the DOJ and credit card companies. Yet another example of tyrannical subjugation and ostracization of a specific target group.

I let most "equal rights" folks know that firearms owners and smokers are two of the most genuinely oppressed groups in the US today and that the primary LGBT equal rights woes pale in comparison.

They usually give me a deer in the headlights look when I begin to give them examples and facts.. Its hilarious.. It overloads their little progressive brains
(for MOST of those equal rights sticker rocking folks are incredibly socialist low information sheeple)

Smokers can smoke all they want - but don't expect me to share their space when they do. I have several medical conditions that are exacerbated by second hand smoke.

But I do agree that the taxes on cigarettes is a wrongful social agenda policy, but then so is the gov. paying for any medical care (except for veterans where it is in their contract), including lung cancer treatment.

 

[aflineman]

So how is this not discrimination? This is akin to the government saying that red cars get more tickets than other cars. Then they pressure insurance companies to drop the insurance on all red cars in the country. Would not owners of the red cars have a discretion case against the insurance companies?
Very loose analogy I know, but it is what I could come up with to ask my question.

 

[The Heretic]

So how is this not discrimination? This is akin to the government saying that red cars get more tickets than other cars. Then they pressure insurance companies to drop the insurance on all red cars in the country. Would not owners of the red cars have a discretion case against the insurance companies?
Very loose analogy I know, but it is what I could come up with to ask my question.

Like I said, everybody wants to rule the world - everybody wants to control your life.

Government is their tool to achieve this goal.

Most people don't care about your rights - they only care about *their* rights, not yours. They only care about their vision of what society should be, not leaving you alone to live your life.

If they don't like porn/drugs/guns/payday loans/gay marriage/pit bulls/smoking/whatever - they do whatever they think will eliminate/reduce it - and government is a powerful tool to that end. In short, most people have some societal issue where their knee jerk response is to say "there oughta be a law" so they get together with others who think the same way and lobby government to enact laws.

They don't care that such laws infringe on your rights to live your life as you see fit (as long as you don't infringe on other people's rights to do the same).

Government is only too glad to cater to these people because politicians/bureaucrats/et. al. understand that the more laws there are, the more rules, the more regulation of everything and anything, the more power and control they have - and the more money they can get by catering to various lobbies. This is true of both right and left, conservatives and liberals.

There are very few people who really and truly just want to mostly leave other people to live their own lives, who are not threatened or offended by people making their own decisions and living with the consequences of those decisions. This is in part true because it frightens them that they would have to do the same - i.e., deal with life and its risks directly without everyone else providing them with a "safety net". Seeing other people exercising such freedom threatens their world view.

It's a circular logic; they don't want motorcyclists to ride without helmets because the motorcyclist might get hurt and require medical care. If you respond with "so what? that is their decision. they can life with the consequences.", they assert that the consequences impact them because they must pay for that medical care.

But who says they have to pay for that medical care? They do - because if someone gets hurt and doesn't have the money to pay for it, then they must pay for it. Why? Because they say we are responsible. How did they/we become responsible? I never get a logical answer for that - just claims that somehow, by our very existence, we have a "duty" to care for other people. When I point out that I did nothing to be responsible for their injuries or illness or bad luck in the job market or the economy - then I am just "being mean, uncaring, selfish", etc.

But the true answer is they want others to be responsible because they don't want to be responsible alone for their own life - they want everyone else to help them if something bad happens, whether it is their fault or not. They want society, and by extension, government, to be a security blanket.

I will not deny that it is good to have a society that cares about its members, that helps those who need help - but on the individual level it should not be mandatory. Unfortunately, it is - in the form of taxes and laws - which again, those in power are only too glad to encourage because it gives them more power and money (not to mention that it feed their ego).

It is the height of stupidity for people to think that they can elect a few people to powerful positions, and not see them corrupted by that power. The longer they will stay there, the more powerful they become and the more corrupted they will be. Power is addictive and these people will say and do anything to keep that power.

 

[Bacchus]

Hopefully the next administration will issue reparations for the gun sellers.