Review: When Banks Do the Government’s Bidding

Financial institutions have become a tool for suppressing speech.

Rainey Reitman learned this in 2011, when PayPal froze the account of a group she was working with to help free whistleblower Chelsea Manning. After negative publicity, PayPal reinstated the account—but Reitman’s interest in what she calls “financial censorship” was piqued.

In Transaction Denied: Big Finance’s Power to Punish Speech, Reitman details myriad ways that financial censorship, also called debanking, has been used “to pressure dissenting and marginalized voices.” She tells the stories of protesters, journalists, gun rights advocates, adult content creators, Muslim entrepreneurs, cannabis activists, erotica writers, religious freedom fighters, naked yogis, and others who are affected when banks, payment processors, and credit card companies limit or close their accounts despite the fact that they haven’t broken any laws.

A longtime civil liberties advocate, Reitman knows censorship is a term usually reserved for government action. Private companies aren’t required to respect the First Amendment. But financial censorship is frequently driven by government pressure, or “censorship by proxy.” Sometimes this pressure is direct and targeted, as in cases involving the National Rifle Association, Backpage, and WikiLeaks. Sometimes it’s more circuitous. It might involve federal guidance to banks about whole industries to scrutinize carefully, as in Operation Choke Point, which targeted porn makers, payday lenders, gun shops, and other businesses. It might involve ill-conceived regulations and security measures, such as “know your customer” laws and targeted economic sanctions that banks are expected to help enforce.

The book offers an array of ideas for mitigating financial censorship, including cash, cryptocurrency, and a sort of Section 230 for banks that would “make it clear that payment intermediaries, banks, and credit card companies are not liable for the activities of the people and institutions who use their services.”