In researching these account closures it has become apparent that some Chase customers are unaffected and others have had their accounts closed for no apparent reason, despite Chase saying that all had Terms of Service Violations.
What has come up though is a memo from the Federal Deposit Insurance Corporation that lists Pornography (and many others) as a high risk business for defaults. While the FDIC doesn’t require banks to close these accounts it is seen by some as a recommendation.
But the most interesting thing to come out of this is a Department of Justice initiative called Operation Choke Point. Operation Choke point is directly targeting Payday lenders, Check Cashing Operations and Third Party Processors.
The adult industry on the internet is largely dependent on third party processors like CCBill, Paxum, Epoch and Zombaio to do billing for adult sites. According to the Obama Administration and the Department of justice these ” third-party processors that route payments for merchants through banks are ignoring signs of fraud to rake in fees from transactions.”
Chase account closures aside the industry should be keeping a very close eye on this as an attack on third party processors is at the very least an indirect attack on adult.