Bella Cummins has run Bella’s Hacienda Ranch, her Nevada brothel, for nearly four decades — and for four decades, she’s been shunned by much of the banking industry.
She’s been denied a mortgage and several other loans, while many of her employees have had to wait up to two weeks for their paychecks to clear.
“Despite being a legal establishment, there is, of course, still a stigma attached to the work,” Ms. Cummins, 74, said from Wells, Nev., the only state where prostitution is legal in certain counties. “There is no bank in Nevada that will lend money to a brothel. So, unlike other businesses, we actually have to make the money to spend the money.”
Workers in sex-related industries — whether in a brothel or a strip club or selling sexually explicit videos online — often risk their safety and face social and employment discrimination. But a lesser-known struggle is that it’s often difficult to maintain a basic bank account and other financial relationships that most people take for granted.
Banks are shutting down what appear to be an increasing number of customer accounts, usually with little explanation, throwing their customers’ lives into chaos. The closures have hit small-business owners who routinely deposit cash, individuals who withdrew larger sums than usual and others who unknowingly transacted with suspected fraudsters, The New York Times has found. But those who work in sex-related industries say they have long lived under that threat of eviction.
Financial institutions are responsible for monitoring the nation’s cash flow for potential criminal activities, including human trafficking and money laundering. In the process they’ve also become quasi-law enforcement, making life-altering calls on who can keep banking and who cannot, based on their own calculus about what kind of risk is worth taking.
But without bank accounts, people are unable to accomplish the most basic of financial tasks: collecting, spending and saving their earnings. Once banished from mainstream bank accounts and everyday financial apps Americans have come to rely on, sex workers are left with fewer, and often less attractive, options — turning to crypto, for example, or being forced to rely on others to hold their cash, opening them up to exploitation. But for most, it’s a continuous source of anxiety.
“Part of the craziness of this is the fear that it instills because it is not consistent,” said Jessica Goedtel, a financial planner in Allentown, Pa., whose practice caters to sex workers. “You don’t know when or if your account will get shut down, what types of payments they are targeting, or how they even mark you for closure.”
That comes at a significant cost to workers and small-business owners, many of whom are not breaking the law, but sidling up too close to a line that makes financial institutions uncomfortable. And some cross it: While some states are moving toward decriminalizing prostitution, it’s still largely illegal.
Even if the trade were decriminalized, some banking insiders say their biggest concern would continue to be letting a serious crime fall through the cracks, particularly human trafficking, which can cost them millions of dollars in fines. If a person’s repeated stream of cash deposits sets off an alarm bell, banks may also consider a sexually suggestive social media or public profile, for example, in combination with too many transactions with websites the bank deems high risk.
“For the bank, it’s hard to tell, and there is not a lot of guidance,” said a money laundering investigator at one of the nation’s largest banks, who did not have permission to speak on behalf of the institution. “Things that are innocuous can get pulled in.”
The thresholds for the bank’s alarm bells, or their overall risk tolerance, may be dialed up and down over time, which means someone whose work involved sexually explicit texting, voice and video call service — phone sex for the digital age — may have their account activated one day and shut down the next.
A majority of workers and small businesses in sex-related industries have experienced some sort of financial disruption: Nearly two-thirds of people working in the adult industry have lost access to a bank account or service, like Venmo or PayPal, and nearly 40 percent of them were shut out in the past year, according to a May report by the Free Speech Coalition, a nonprofit trade group for the adult entertainment industry.
“It’s a basic human right — the right to banking,” said Pierre Whatley, a former bank examiner who is now working as a lobbyist for the coalition and helped industry workers arrange meetings with nearly two dozen Republican and Democratic members of Congress about the issue in May.
“Overwhelmingly, the response from Congress is: We did not know this is happening or to the degree this is happening,” he said. “Whether or not you agree with sex work, you have to set aside your personal feelings and look at the core issue. Is this a lawful, legal business — and if so, shouldn’t they have a right to a bank account?”
A room in Bella’s Hacienda Ranch, Ms. Cummins’s brothel.Credit…Niki Chan Wylie for The New York Times
Vulnerable and Banished From Banking
Elle Stanger, a stripper in Portland, Ore., said her income doubled when she accepted tips electronically through Square, a payment platform. But after several months, Square closed her account — perhaps, she speculated, because the company figured out where she was working. Square prohibits transactions related to adult entertainment products and services, and a spokeswoman said Square’s detection models “use a wide variety of signals to identify activity that may violate our terms and policies.”
“I knew I was breaking the rules, but I had just bought a home and I was co-parenting,” said Ms. Stanger, who has a young daughter. “I took a chance.”
Being able to accept electronic payments would also be safer than heading out of a club at night with pockets full of cash.
Some sex workers have high-profile, lucrative careers. Others see it as a stopgap to make extra money, according to interviews with roughly a dozen workers in the industry. They are mothers, Girl Scout troop leaders, substitute teachers and graduates with advanced degrees and five-figure student loan debt. They also include survivors of exploitation and abuse who say they are now engaging in sex work on their own terms.
Indeed, many industry workers are already vulnerable, researchers and advocates say, with histories of financial instability. In some situations, they’re forced to rely on others — romantic partners, pimps, roommates — to hold their money, which can be even more destabilizing and lead to exploitation.
“Having to rely on someone for all of your financial transactions is an incredibly vulnerable place,” said Kate D’Adamo, a partner at Reframe Health and Justice, an advocacy and support organization for sex workers, and an author of a recent article in CUNY Law Review on sex workers and financial discrimination.
High Risk, Low Appetite
Banks and other financial institutions, on the other hand, don’t want to invite extra scrutiny from regulators and bank examiners.
After a branch employee or computer flags suspicious activity — maybe it’s too many cash deposits, a certain number of peer-to-peer payment transactions that hit the bank’s threshold, or transacting with adult entertainment sites — it is reviewed by bank employees in the anti-money laundering department. If these analysts have reason to believe the transaction is potentially problematic, they may be required to file a suspicious activity report, or SAR. A customer with too many SARs may be evicted from the bank.
It’s also possible the bank knows where the money is coming from, but they simply don’t want to shoulder the potential risks and extra monitoring that may be required to ensure the activity is lawful, bank officials say. Financial institutions often avoid what they deem high-risk industries, like adult entertainment and sex work, even if it is legal.
“If giving you a bank account is likely to make them lose money or expose them to undue risk that is not proportionate to the reward, they are not going to give you a bank account,” said Bianca Beebe, a sex work policy researcher and former co-chair of the Oregon Sex Workers’ Committee.
The nation’s largest banks are considered among industry workers to be more aggressive in shutting accounts down, so sex workers often retreat to smaller community institutions and credit unions.
Some financial institutions make their terms and conditions explicit: Bank of America’s online customer agreement for Zelle, for example, says the bank reserves the right to shut down an account if it believes a consumer is using its services for pornography and sexual activities or materials, among other things. Those restrictions are not mentioned in its checking account agreement.
Chase’s and Wells Fargo’s customer agreements are silent on the issue, but both have made headlines for shutting down adult entertainers’ accounts.
About a year ago, Wells Fargo closed the accounts of several current and former workers in legal sex-related trades, Rolling Stone reported at the time, including Alana Evans, the president of the Adult Performance Artists’ Guild, who recounted her story on social media, noting that she had been a customer for more than 30 years.
And roughly a decade ago, Chase shut down several adult performers’ bank accounts. At the time, the closures were initially linked in media reports to an Obama-era initiative called Operation Choke Point, led by the Justice Department and bank regulators, which discouraged financial institutions and payment processors from doing business with certain high-risk industries, including payday lenders, gun dealers and adult entertainment.
Trish Wexler, a spokeswoman for Chase, said the closures were unrelated to the initiative, but instead due to a pattern of transactions between the small group of individuals whose accounts were shut down. “We do not prohibit people in this industry from having personal bank accounts with us,” she added.
One of the risks associated with sex work is money laundering and human trafficking, where victims, mostly women, are forced or coerced to engage in commercial sex acts. The Treasury Department’s financial crimes unit has sent guidance and advisories to banks on activities that could serve as red flags, though financial institutions often sweep up adult businesses and adult entertainers — as well as consensual sex workers who are operating outside of the law but on their own volition. Many banks and other financial platforms avoid doing business with these industries altogether.
“That is a risk appetite my bank doesn’t take,” said a manager at a regional bank in charge of filing SARs, and who did not want to be named because she didn’t have permission to speak on behalf of her bank. “That is the problem we have — trying to recognize potential human trafficking that we would have to report.”
Beyond banks, many financial services apps have blanket bans, which state they won’t process any transactions related to adult content or services.