Over ten years ago, the Obama Administration introduced “Operation Choke Point,” a program that used the concept of “reputational risk” to encourage banks and similar financial entities to reevaluate providing services to customers connected to “heightened risk” transactions and crime. Merchant categories “that have been associated with high-risk activity” and named specifically in a Federal Deposit Insurance Corporation (FDIC) publication were telemarketing, online gambling, “racist materials,” Ponzi schemes, pornography, and dating and escort services, but also, extensively regulated and legitimate firearm and ammunition dealers.
Predictably, once the FDIC “publicly warned banks that it was intensifying its own scrutiny of banks that did business with ‘high risk’ business customers who use payment processors (for example, firearm dealers who accept credit cards, as well as law-abiding payday lenders),” many banks opted to stop providing services to completely legitimate gun-related businesses, without any evidence of wrongdoing or that the merchant was breaking the law. In 2018, after the Trump Administration put an end to the program, a former FBI agent and past president of the American Bankers Association described how “Operation Choke Point had more in common with a purge of ideological foes than a regulatory enforcement action. It targeted wide swaths of businesses with little regard for whether legal businesses were swept up and harmed.”
According to reports from across the pond, it appears that shooting clubs, shooting syndicates, gun shops and other businesses and organizations in the U.K. have likewise been targeted with “debanking” – “sudden unexplained account closures and refusals for new applications, difficulties with online payments, the use of card machines and applying for credit,” allegedly because words such as “gun,” “firearm,” “shoot,” or “shooting” appear in their paperwork. (“Debanking” in general attracted more extensive media coverage after former politician Nigel Farage was unceremoniously dropped by his bank last year; documents he obtained exposed “that a briefing presented to the bank’s ‘reputational risk committee’ described him as having ‘xenophobic, chauvinistic and racist views,’ citing his comments on Brexit, friendship with Donald Trump and more.”)
A news report quotes a spokesperson for the British Association of Shooting and Conservation (BASC) stating the obvious: “The fact that a very small minority of people oppose shooting does not make it a reputational risk. A small minority of people oppose the banking system, that doesn’t mean dealing with banks is a reputational risk to their clients… banks [are] discriminating against perfectly legal and respectable accounts that have been run for years on a proper basis and that actually damages people and businesses.”
The BASC conducted a “banking services and the shooting community” survey, with the results showing that the problem was widespread. “Of 325 survey respondents, 43% indicated that they had experienced banking difficulties, with the most common difficulty being opening an account, followed by processing online payments, sudden closure of an account, and obtaining credit… Where explanations were provided by the banks for difficulties experienced, the overall theme was that banks had a policy not to associate with anyone connected to firearms.” A separate source indicates that “15 different UK-operating banks are implicated in the claims.”
A representative of one “debanked” entity referred to in the article, the Mill Farm Clay Pigeon Club, said the bank “made us feel like criminals and the whole experience of being shut down like that, followed by the difficulty in finding another bank, was something I hope we never have to go through again. An amazing supplier gave us credit while we completed six different business account applications.”
Apart from the fact that completely law-abiding entities were being targeted and livelihoods put at risk for no apparent reason other than a perceived “politically incorrect” connection to firearms, the BASC points to the indiscriminate aspect of the discrimination. “The most bizarre aspect is that there is no consistency to the decision making. In the same bank, even in the same branch of that bank, will be lots of shooting related accounts. Yet, we see decisions taken against some of those accounts but not others.”
The U.K.’s Financial Conduct Authority (FCA) is reportedly looking into complaints from the representatives of gun trade and sports shooting entities, and an FCA report is expected “later this year.” A September 2023 letter from the FCA to the chancellor of the Exchequer (the government minister responsible for the treasury) referred to initial findings that there did not appear to be reported closings of accounts “primarily due” to customers’ political beliefs, but “we will be undertaking further analysis and supervisory work to assure ourselves of this and better understand the reasons for personal accounts having been closed because of reputational risk, where the information so far provided by firms is inconsistent.”
Access to adequate banking services is critical for businesses and individuals: the shooting club mentioned above was “nearly forced to close the business because of what happened. The banks should not be getting away with treating customers with such contempt.” The BASC spokesperson notes that, “You wouldn’t expect your electricity, gas or water to be shut down because of your interest in shooting, so why should banks be allowed to get away with denying us fundamental financial services?”
So you would think. The experience in America, however, is that anti-gun advocates leave few stones unturned in their attempt to destroy the Second Amendment, including weaponizing access to financial services by “choking out” lawful gun businesses, increased civil liability on firearm manufacturers and dealers for third-party misuse of guns, threats of consumer boycotts, and, most recently, the creation of a Merchant Category Code (MCC) specific to firearm retailers, to be used by payment processors and financial service providers to categorize transactions and enable monitoring and data-collection on firearm sales.