Monday, May 19, 2014
Fibbie "chilling effect" on banks doing business with gun sellers sets a bad example for the Internet ("know thy customer")
The Washington Times is reporting that many banks are refusing to allow gun retailers, wholesalers, or parts suppliers to continue to do business with them, especially if the businesses use alternate payment processor systems like PayPal (or use bitcoin). The story (Monday) is here.
The banks fear that that they will have “reputation damage” in the eyes of investors because of unusual scrutiny from the DOJ under supposed “know your customer” rules and philosophy.
The same problem occurs with porn businesses, and banks have generally been reluctant to deal with “legal” marijuana retailers in states like Colorado, making it a cash business with enormous security problems. Yet, these same banks, during the period of low farm prices in the early 1990s, often secretly encouraged clandestine and illegal marijuana growing by farmers to keep from default on loans.
This strikes me as important according to precedent. Suppose the same paradigm applied to the Internet. Then there would be no Section 230, no Safe Harbor (DMCA), and all content service providers would have to “protect” the public by prescreening content.