12-11-2015, 09:05 AM
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Confirmed User
Join Date: Jul 2005
Posts: 283
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Potter,
While the Court case itself did not involve this issue, the article I referenced did. I will quote it below.
Quote:
Just a few months earlier, the FDIC went on record this clarifying its "high risk" guidance for banks, and guess what? Sex isn't in them, not even vaguely.
That's thanks to a federal mess called Operation Choke Point, launched in 2013 by the US Financial Fraud Enforcement Task Force (FFETF). It targeted financial institutions working with third party processors (namely Paypal and Square) because they're bottlenecks for the flow of online payments.
Choke Point relied on a vague FDIC guidance document; this year, the House Oversight Committee found collusion between the FDIC and FFETF, stating "The Committee has obtained substantial evidence suggesting that as a result of coordinated actions by the FDIC and the Department of Justice, banks are terminating relationships with entirely legitimate and licensed businesses." This led to leading to hearings by the House Judiciary Committee and the House Financial Services Committee, and lawsuits against the FDIC.
Hence the FDIC's new, detailed guidance document for banks, one in which "reputational risk" is now omitted -- thus officially not enough a to deny or close an account. The FDIC's categories of "high risk" specify fraudulent goods and services, and tactics "such as aggressive telemarketing or enticing and misleading pop-up advertisements on Web sites."
While "unlawful Internet gambling and the illegal sale of tobacco products on the Internet" are singled out as FDIC "high risk" areas, PayPal's "items that are considered obscene ... [or] certain sexually oriented materials or services" are most definitely not.
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