Online Gun Retailers Also Pissed About 'High Risk' Label

CYBERSPACE—Normally, the gun and porn industries get along like Penn & Teller, soup and sandwiches, milk and cookies. The Shot Show takes place in Las Vegas concurrent with the AVN Show, each industry depends upon the United States Constitution to remain in business, and there are a lot of people in either camp who are big fans of the other's products. But a controversial program called Operation Choke Hold overseen by the Justice Department and the FDIC that asks financial institutions to pay special attention to problematic and possibly illegal online transactions could drive a wedge between porners and gunners, who reportedly don't like being compared with their porn-producing brothers and sisters, especially if the comparison means a perceived assault on their Second Amendment rights. "Since 2011," reported the Washington Times, "regulators have increased scrutiny on banks’ customers. The Federal Deposit Insurance Corp. in 2011 urged banks to better manage the risks of their merchant customers who employ payment processors, such as PayPal, for credit card transactions. The FDIC listed gun retailers as 'high risk' along with porn stores and drug paraphernalia shops. "Meanwhile," it added, "the Justice Department has launched Operation Choke Point, a credit card fraud probe focusing on banks and payment processors. The threat of enforcement has prompted some banks to cut ties with online gun retailers, even if those companies have valid licenses and good credit histories." Predictably, the online gun retailer industry has reacted with similar ire to that expressed by adult performers who had their accounts closed. In the latter case, the charge was that the banks and other services were "slut shaming" the adult performers as a way of targeting the porn industry; in the former, the accusation is that the government is anti-gun. “Four generations of my family have been in this industry," said Kelly McMillan, owner of Phoenix gun manufacturer McMillan Group International, which lost its 12-year account with Bank of America in 2012. “This is an attempt by the federal government to keep people from buying guns and a way for them to combat the Second Amendment rights we have. It’s a covert way for them to control our right to manufacture guns and individuals to buy guns.” McMillan decided to do something about it and started its own processing service, McMillan Merchant Solutions, which specifically targets Second Amendment-dependent businesses. The Washington Times emphasizes the alleged regulatory overreach of Operation Choke Hold, quoting bankers groups as well as Republican legislators in Washington who oppose the program, but its coverage also contains an assertion by the government rejecting outright the claims being made that Operation Choke Hold actually targets industries Washington doesn't like. "In a House hearing in April," reported the Times, "FDIC acting General Counsel Richard Osterman defended his agency’s definition of what constitutes a 'risky' business — subject to money laundering or other criminal behavior — but made it clear that no bank is outright prohibited from serving any such companies." Osterman told the committee, “We have actually put out a policy statement on this issue to make it very clear from the very top that as long as financial institutions are properly managing their relationships and the risks, they’re neither prohibited nor discouraged from providing these services." But none of that has stopped gun retailers from believing that at bottom the government really wants to pry their guns from their warm, live hands, just as adult performers and others are convinced that the government is using the banks to try to damage and maybe destroy the industry. But who knows, instead of driving a wedge between the two industries, maybe these developments will signal the beginning of a beautiful friendship.