Banking rights?

Over the years we have seen banks close the accounts of gun stores simply because they sold a constitutionally protected item. This was wrong and the U.S. Senate telling them to back off probably helped.

I’ll grant that you might have to squint a little to see it but this is an analogous situation with the 1st Amendment:

Over the weekend, Rolling Stone broke the news that half a dozen of the bank’s clients had their banking accounts with Wells Fargo canceled with no previous warning. What do they have in common? Each has previously or is currently working in the adult entertainment industry. Some performers have held accounts with the bank for 25 years or more.

I’m a bit torn on this topic. Should a company (and/or an individual) be forced by law to do business with someone?

There is the wedding cake case for possible insight. There I was inclined to side with cake makers freedom of religion claim over the same sex couple wanting a wedding cake.

In the gun maker/distributor/seller and the adult entertainers banking cases I’m having a tougher time siding with the businesses. Sure, the Feds don’t have constitutional authority (like that has ever stopped them) to tell the banks they must do business with someone. Unless, of course, there is a “banking right” hidden in the constitution someplace. But the individual states could legislate such requirements.

Aside from the legal authority there are other issues. If a business can discriminate on the basis of occupation (assuming the risk is equivalent for the favored and disfavored occupations) then why can’t they discriminate on the basis of skin color, religion, gender, etc.? Perhaps, from a philosophical viewpoint, should they be allowed this freedom. But I’m not comfortable with that conclusion either.



38 thoughts on “Banking rights?

  1. Interesting question Joe
    Banks are state and federally regulated.
    Florists and bakers have state licenses but are not federally regulated..
    If a federally regulated business discriminates, then the federal government is discriminating.
    Wrong on all counts.
    Banks that break federal law should be terminated.
    With prejudice.

  2. Part of the reason this is a problem is because we’ve allowed so many companies to consolidate to the point of having a near monopoly in many markets. Going back to a policy of strict trust busting would be a good start at making this less of an issue, and remove the ability of corporate executives to decide for others how their moral lives should be structured.

    Beyond that, the question centers on the necessity of the service in question. Banking isn’t something you can avoid in the modern world, so allowing discrimination on any basis is unreasonable. “Life, liberty, and the pursuit of happiness.” The government’s most basic job is the protection of those things for all its citizens. Preventing a class of people from participating in the banking system is a clear deprivation of liberty, and ultimately life, since modern society now makes participation in that system a near requirement (and give it another 10 years, it will be a full requirement). Conversely a wedding cake isn’t a necessity, so if nobody wants to sell you one, you get to bake it yourself.

    The only other option is for the government to backstop those who are discriminated against. E.g. if no bank will take your business, the government will have to open a bank and service you. I’d prefer we not make the government larger, thanks, so if we can avoid this option I’d appreciate it.

    No, wait, there’s one more option: get rid of banks entirely. Seems like that’s not really a viable option, so….

  3. “Perhaps, from a philosophical viewpoint, should they be allowed this freedom. But I’m not comfortable with that conclusion either.”

    One persons freedom can and does infringe on another persons freedom. Growing up I remember the oft quoted jingle: Sticks and stones may break my bones but words will never hurt me. Thus it was a given that we had freedom of speech – even supported by the ACLU. Then we abandoned the principle underlying the jingle and conflicts followed. Now there are even hate crime laws criminalizing speech.

    The cost of giving up on tradition has led to more and more conflicts to the extent that we are about to tear ourselves apart. The underlying cause is diversity coupled with multiculturalism, since each identity has a different view of their rights vs your rights.

    We now live in a world of tribal cultures without tribal lands. Conflicts are the result.

    It is not that different between historical nomadic tribes. And that is what we are seeing in groups that follow street law. Thus the law of the jungle prevails and tit for tat is never ending.

    Islam had a partial solution to this problem that worked for over a 1000 years. The state gave responsibility to religious judges in manners relating to domestic and some criminal issues. That applied to Islamic followers, Christians, and Jews. Of course, that meant that intermarriage of faiths were forbidden unless there was a conversion. Today, in the Islamic world this system still exists as does the moral police.

  4. Banks are magical entities endowed with the power to pull dollars out of thin air.

    It is goverment that has granted them this magical power, so everything this power affords them to do…. is actually the goverment doing it.

  5. In this case the banks are heavily subsidized and even insured by the federal government. Read that as us. If the public is insuring them, they should provide services to the public. that raises the question, should the public be insuring them?

  6. Is it legal? To me, that is the only question that matters. If the business/entertainer/whatever is conducting legal business, then I would say the bank should have no right to close accounts.

    If it’s illegal or suspected to be, they should follow the laws, rules, and regulations for reporting such activity and then allow the the legal system to work. At the very least the ‘accused’ will be allowed to face the charges and fight them.

    Of course, then some folks will push for legislation to make certain things illegal, but let them. that’s why we have the form of government we have.

    • As pulling money from thin air is a goverment power, banks cannot legally do anything the goverment cannot legally do. No discrimination.

      Alternatively, give *everyone* the power to pull money out of thin air, so we have a balanced playing field. Then banks are private and can do as they please. The result of this change is the same as before the change, only alot sooner.

  7. Where was Rolling Stone when these same banks were canceling firearms related businesses? It’s OK when the banks do this to others so long as it doesn’t happen to me?
    One key to this mess are credit unions. Credit unions are local and generally avoid the stupidity of big organizations. In addition, nothing says that people with mutual interests cannot form their own credit union.

    • Nice idea, but credit unions are also federally controlled. Different agency than banks, but other than the initials on the office it’s still a bunch of federal bureaucrats.

      Neil Smith used to make the argument that a corporate charter is a government license and thus the holder of such a charter should be viewed as a part of the government. That argument applies the Bill of Rights to “private companies”.
      Even if you don’t adopt that reasoning, banks are clearly operated as part of the government. It’s rather questionable whether there is Constitutional authority for that, but it certainly is the current status quo. So I’d apply the Bill of Rights to them.
      And even beyond that, one could argue banks are “utilities” and should be subjected to the non-discrimination rules of utilities. Power companies can’t (not yet) disconnect gun stores, nor can telephone companies refuse to carry their phone calls; neither should banks be permitted to refuse to carry their accounts.

  8. The obvious comparison is to the Civil Rights era. Private entities from banks to lunch counters were violating the civil rights of citizens. That was made illegal and this should be too. Only the government can make public policy and that power is and should be constrained by the Constitution.

  9. All good comments!
    “This system is created for a moral and religious people. It is wholly unsuited to any other.”
    Should business have the right to refuse service to anyone? Absolutely. They have to.
    It seems the real problem is trying to apply the law equally to unequal circumstances. This is a commie wedge.
    Banking is pretty much a-political. With almost no human contact. And with nothing being done illegal. Who cares? (It’s not like every major bank hasn’t already been fined for laundering money for the drug cartels.)
    So them not wanting to do business with gun people is political. And the only reason they do so is because they have government cover to do so. Without it, no one would care. Especially the banks.
    But as John pointed out. Lack of competition is the real problem.
    As for baking cakes. That was religious. Religious sodmites wanted to force religious Christians to bake them a cake. Using politics. It was done to be offensive in the first place.
    And it was handled all wrong by the Christians. After saying no politely. All should have realized you can force me to do something, but you can’t force me to do it well. It should have been the most memorable wedding cake ever baked. And not in a good way.
    I own a restaurant. If I don’t like blacks or cops. Is it better for them to know that, or eat spit in their food? And just as a customer can chose what restaurant they go to. Can’t the owner chose who he wants in his business?
    There is no such thing as equality this side of the grave. And I can only pray the survivors of this NWO putsch and coming WWIII will remember that.
    A Judge is just that. And anyone that calls themself a judge could have separated and fleshed out the real problems/motives/answers in a heartbeat.
    The real problem is who is in control of the politics? And almost always will be.

    • All right and true, but I’m petty and going to pick nits:

      It actually *is* like every major bank hasn’t been fined for laundering money, when the fines are a small fraction of the profits which the laundering produced.

      “All should have realized you can force me to do something”… ok, but this is accepting they have an enforcable claim against your labor. By definition, this is accepting slavery.

      • True, but it’s politics, and they/I’m Christian.
        Our lord and savior was tortured and murder for politics.
        Of all the things were to be on the lookout for, it’s politics.
        Hell, the book of Revelations is all about the end state of world politics.
        Were to be salt and light onto the world. And if salt had been used in that cake rather than sugar???
        Everyone would have gotten the point. Rather than the national news.
        And the only reason banks do anything is because there’s a profit to be made. Someone is paying them to do this.
        Politics once again circumventing right and wrong.

        • One of the things I think Fido is saying is, if they have an enforceable claim on your labor, then they have an enforceable claim on your best labor.

          Also, using salt instead of sugar is all fine as an act of protest, but you’re still being forced to participate in a ceremony that violates your beliefs. Do you not see everything wrong with that situation?

          If your religious beliefs say you cannot eat pork (call it kosher or halal or whatever else), and the government mandates everyone eat pork at least once per week, it doesn’t matter how you season it; you’re still being forced to violate your beliefs. It is then not a stretch to say you don’t really believe it.

          What else, then, can they force you to do that they know violates your stated “beliefs”, since you so easily accepted this one?

          If you give on one violation, your ground for refusing future violations becomes weaker, until you’re a “believer” in name only. (And Christ will say to those, “I never knew you.” [Matt. 7:21-23])

          • Politics has always layed a claim on your labor, legal or not. Without it they would starve. It’s been that way since Nimrod.
            Unjust claims on labor are a part of being Christian. And at this point being made an example of is what the sodomites wanted.
            What do you think Christ would want, a marytre? Or sodmites choking on cake for being asshole sodomites?

        • I think I get it. If you have been enslaved, a sane person must accept this fact, and work within it to escape it. That’s not the same as accepting slavery. I must accept that I am enslaved, while I work to change that. Foremost is that I am morally obligated to *ensure* that no one can profit from my slavery, elsewise I am *supporting* slavery. So of course, I must make sure any work I do as a slave, must be redone.

          Far better is to avoid the slavery entirely, even at risk of death. (mine or otherwise)

          • Yes, far better to avoid slavery altogether. But we find ourselves at that the point in society…. Where it’s to early to start killing the slavers?
            Soon though. They won’t give you any choice.

  10. The banks — like hotels, restaurants, bus lines, and social media sites — are operating a public accommodation and therefore may not discriminate on any basis among their customers.

    • What law says that?

      I didn’t think gun owners and adult entertainers were in a protected class like race, religion, and sex…

      • There *is* something of a constitutional protection for all of that which makes guns available for people to keep and bear. I don’t see anything about adult entertainers in there though.

        • I could see the 1st Amendment being invoked. But practically they are considered third class citizens.

          For example, copyright infringement is a federal crime. But I was told the feds has not enforced theft laws if it is a X-Rated film since the early 1980s.

    • me too.. that is not a valid argument, so long as there is a level playing field for others to provide the same service in competition, they may discriminate to their heart’s content.

  11. A few thoughts on this:

    1. As it’s pointed out by other commenters, banks and credit unions are federally regulated and federally insured — banks by the FDIC, credit unions by the NCUA — and in many ways are inseparably partnered with the federal government. As such, they should not be allowed to discriminate in any way the federal government is not allowed to discriminate. One option to enforce non-discrimination compliance is to drop their deposit insurance; how many customers will stay with them if their accounts are no longer insured?

    2. That said (IANAL warning), while there is no “banking right” in the Constitution, there is an Equal Protection clause. As I believe it applies here, non-discrimination laws are based on race, ethnicity, national origin, disability, native language, religion, biological sex, gender identity, sexual orientation, age, and a few other things the drafters of the law believed are inherent and immutable (read: things a person cannot change about themselves). “Occupation” is not on the list, which makes perfect sense: what one does for a living is a choice, not inherent at birth. An adult film “performer” can choose to do something else with his/her life.

    3. Even so, if the occupation is legal and the person is following all the normal and reasonable practices to keep him- or herself safe and healthy, barring a company-wide religious objection (and then only if the bank or credit union is chartered as a religious-affiliated organization), I see no reason for a financial institution to refuse to set up an account — or close an existing account — based on the account holder’s “controversial” job. I would tend to side with the customers on this issue.

    4. In the “gay wedding cake” controversy, however, I’m firmly on the side of the bakers and business owners. They didn’t refuse to serve customers because the customers were gay; those same customers had been regulars at the shop for everyday items for a long time. What they refused to do was participate in a wedding ceremony they felt violated their religious beliefs — they refused the event, not the customers. In doing so, I thought the bakers were very gracious in offering to put the couple in contact with other talented bakers who would be happy to cater the wedding. But then the situation turned silly and was blown completely out of proportion by the press, and the couple sued the bakery to force them to participate in the wedding in violation of their religious beliefs.

    At that point, it was no longer about the cakes or the wedding — else they would have just gone to a different baker and never come back; no, it was about using the power of the courts to force others to affirm and support their lifestyle — it was no longer good enough to just accept it.

    And that action, whether by a business or by an individual customer, is an illegitimate use of government power which we should all oppose.

    • Religion is “inherent and immutable”?

      How about who you are married to (or dating)? Think mixed race marriages…

      Policitical affiliation (Trump supporters and Nazis)?

      Gun owners? Payday loan businesses? The Obama administration put pressure on banks to refuse service to them at the same time as gun businesses.

      • Marriage is outside of goverment jurisdiction, and the term “marriage” should not be used in any legal document. It’s none of their business.

        But of course, the same can be said about 90% of what goverment is presently doing. Nearly all the “alphabet” agencies are unconstitutional.

        Enforce the 10th ammendment again.

        • So banks and other businesses shutoff be able to discriminate at will against people on the basis of marriage status and/or who they are married to?

          • As banks act as agents of government, they should be held to the limitations of government. So in this case, banks would also not be permitted to make reference to marriage. Can’t ask. Can’t consider. None of their business.

            Let everyone start their own banks on a level playing field (give everyone banking powers), and *then* banks are no longer government agents, and can discriminate as they please.

      • If “gender-fluid” is a valid gender identity (“I am whatever I feel like being today”) that cannot be discriminated against, and spoken language (which can be learned, as millions of immigrants prove) cannot be discriminated against, then religion is right up there, too.

        Plus, religion is explicitly protected under 1A; gender identity and spoken language are not.

        Who you marry or date: if YOUR race or ethnicity cannot be used to discriminate against you, then your SPOUSE’s race or ethnicity is equally off-limits. (And banks seem to routinely discriminate based on marital status; married applicants co-signing for each other tend to qualify for better rates. But that’s justifiable by hard data, and has more to do with the “co-signing” part than the “married” part.)

        Political affiliation is free speech and assembly. Protected under 1A. The Neo-Nazis won their case when a town tried to shut them down. [see: National Socialist Party of America v. Village of Skokie (1977)] As we know, unpopular speech is more in need of protection than popular speech.

        Payday loan businesses are notoriously predatory … but 100% legal, and all their terms — including the crazy-high (but still legal) interest rates — are provided up-front. The Obama administration had no more authority to pressure banks to refuse services to them than they did to gun businesses.

        (As an aside: No offense, but “Obama did it before we did,” is not exactly the most ringing endorsement of legitimate use of government power. 😉 )

    • Archer, that’s an outstanding description of the wedding cake war. The key point was that it was an attempt to force the courts to make the defendant adhere to the religious views of the plaintiffs. Any honest judge would have thrown the case out instantly as an infringement on the religious freedom part of the 1st Amendment. Unfortunately, honest judges are just as rare as other honest politicians.

      • Thanks! We followed it pretty closely when it was news.

        That controversy should never have been news because it should never have been a federal case (although I’m glad for the win for religious freedom). As you say, it should have been thrown out immediately.

        But you’re correct about honest judges, which explains why it went so far for so long.

  12. As Vox Day said long ago about law; “If you can force me to bake you a cake, I can force you to pick cotton.”
    Ain’t democracy grand.

    • “A government big enough to give you everything you want is a government big enough to take from you everything you have.”
      — Gerald R. Ford

      Biden claims that “MAGA extremists” are “a threat to democracy”. IOW, a minority insisting on its unalienable rights is “a threat to democracy”.

      My response: “You’re damn right it is! As it very well should be!”

      In a democracy, the majority could simply vote away the rights of the minority. It is a terrible form of government. The Founders knew this, so they built for us a Constitutional representative republic.

      This way, a dedicated minority CAN resist the whims of the majority, especially when the majority seems determined to eliminate said minority. If that’s “a threat to democracy”, then I’d say democracy needs to be threatened from time to time to keep it in line.

      • Point taken. And yes thats my understanding of the constitution. That the rule of law should govern rather than the whimes of man.
        Also, lest we forget the election was stolen? Were not a minority.
        Were also the best armed-largest standing army the world has ever seen. And we scare the crap out of communist. At least the one that have any brain cells left.
        What we set our mind to do. Will most likely get done.
        Look what we did in the last 200 years? Highest, freest living standard the world has ever seen. And dragging all those parasite while doing it!
        In truth, their barely hanging on. (Thus the reason for their fevered tone/ stupidity.)

        • I don’t believe the majority thinks the election was stolen. A plurality, certainly, but not necessarily a majority.

          However, I do believe a majority have serious concerns and questions about some oddities in how the votes were collected, how the votes were counted, and other strange occurrences and policy changes, many put in place “because COVID” (but will be left in place “because [insert new pathogen]” — assuming they give up on monkeypox as the new plague).

          Many in this group think Biden would have won even without shenanigans, but want the potential shenanigans investigated nevertheless. (This sub-group is why I think a majority want an investigation, but a minority thinks the election was stolen.)

          The problem is, there’s no motivation to investigate the 2020 election, even with the mounds of publicly-available video evidence of questionable — and sometimes clearly illegal — ballot collecting and vote counting practices.

          THAT is something I think a majority is interested in, regardless of the outcome. (After the three-year sh!t-show that was the “Russian collusion” investigation after the 2016 election, the silence on the 2020 election is particularly deafening.)

          The bottom line is, Americans need to have faith in a free and fair election process, and right now it’s looking like a bipartisan majority doesn’t.

        • It could be of note that these united states did *not* originally survive by laying a claim on it’s citizen’s labor.

          Prior to the federal reserve and income tax, the federal goverment income was largely from imposing import tariffs.

  13. Perhaps the rule should be something like the following:

    If the industry exists as a monopoly/cartel, or is “too big to fail,” (I.e. the average person is effectively forced to associate with it), then no discrimination is allowed.

    If the market is competitive, and there are many options with many different possible directions (I.e. not a situation where all the players are acting in concert—antitrust?), or if the business is sufficiently small, then any form of discrimination is allowed.

    • In the “no discrimination” subset, I would also put any industry that is regulated by the government to the point where the government effectively runs it. That last bit is because pretty much everything is regulated by the government, and in particular that is true for things we care deeply about like the gun industry. But “effectively runs it” doesn’t apply there yet, while it does for banks.

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