A local story that has received national attention is SunTrust Bank’s closing of the banking account of American Gun & Pawn. On March 20 Steve Champion, the owner of American Gun & Pawn, received a letter from SunTrust stating his deposit accounts, safe deposit boxes, and credit cards would need to be closed by April 20th, or SunTrust would close them for him.
American Gun & Pawn is located next to Coney Island in Brooksville. The shop was opened last year by Mr. Champion with his partner Steve Mason. After he received the letter he approached Bank of America where he has had an account since he was a kid. Bank of America also declined his business.
Mr. Champion stated he should have known something was up when he opened his account with SunTrust and they would not issue him a credit card. He also found it interesting that the day that SunTrust Bank sent the notice of cancellation happened to be the same day that he deposited a check from the NRA for sponsoring an event.
Mr. Champion has since received at least 10 offers from other banks to provide their services for his business. The manager of Capital City Bank stopped by and made his pitch. BB&T offered him service but he decided to move his account to Brannen Bank.
The reason that this became a national story is that over the past couple of years there have been numerous reports of gun stores and other legal businesses having their bank accounts closed. These closures followed the discovery of a program called Operation Choke Point by the Justice Department and the FDIC.
The FDIC’s warning to lenders about doing business with high risk activities was first reported on in August 2013. In 2014, there were 30 merchant categories that the FDIC had listed associated with high-risk activity.
The FDIC’s web site listed “Some merchant categories that have been associated with high-risk activity include, but are not limited to:
- Ammunition Sales
- Cable Box De-scramblers
- Coin Dealers
- Credit Card Schemes
- Credit Repair Services
- Dating Services
- Debt Consolidation Scams
- Drug Paraphernalia
- Escort Services
- Firearms Sales
- Fireworks Sales
- Get Rich Products
- Government Grants
- Home-Based Charities
- Life-Time Guarantees
- Life-Time Memberships
- Lottery Sales
- Mailing Lists/Personal Info
- Money Transfer Networks
- On-line Gambling
- PayDay Loans
- Pharmaceutical Sales
- Ponzi Schemes
- Pornography
- Pyramid-Type Sales
- Racist Materials
- Surveillance Equipment
- Telemarketing
- Tobacco Sales
- Travel Clubs
The list has since been removed. The FDIC sent a letter to financial institutions on January 29, 2015, that stated “The Federal Deposit Insurance Corporation (FDIC) issued a Financial Institution Letter today encouraging supervised institutions to take a risk-based approach in assessing individual customer relationships, rather than declining to provide banking services to entire categories of customers without regard to the risks presented by an individual customer or the financial institution’s ability to manage the risk.” This letter from the FDIC was thought to have ended operation choke point.
