New security threat: Banks as information gatekeepers

December 27, 2010

Banking & Finance

By Ted Carter

How far does the right to refuse service go?

The New York Times posed this question in an editorial Sunday after Bank of America joined Visa, MasterCard and PayPal in refusing to accept payments designated as contributions to America’s newest villain – Wikileaks.

Wikileaks has been busy leaking tens of thousands of classified documents on everything from our military activities in Afghanistan to our snooping on foreign diplomats and dignitaries.

The Times, which has received and published stories based on the hi-jacked documents, cautions that we could be entering an era in which banks get to pick and choose when it comes to accepting payments for third parties.

“…a bank’s ability to block payments to a legal entity raises a troubling prospect. A handful of big banks could potentially bar any organization they disliked from the payments system, essentially cutting them off from the world economy.”

Banks are already claiming some legal accounts are too risky to allow. The Times cites banks in Colorado that have refused to open bank accounts for legal dispensaries of medical marijuana.

That’s an awful lot of leeway to give banks, especially in an era in which scrutiny of banking practices is more vital than ever. If they don’t like the scrutiny, they can squeeze the financial life out of those doing the scrutinizing.

Here’s something The Times’ editorial suggests we think about:

“What would happen if a clutch of big banks decided that a particularly irksome blogger or other organization was “too risky”? What if they decided – one by one – to shut down financial access to a newspaper that was about to reveal irksome truths about their operations? This decision should not be left solely up to business-as-usual among the banks.”

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One Response to “New security threat: Banks as information gatekeepers”

  1. Mindi Hayne Says:

    After I originally commented I clicked the -Notify me when new comments are added- checkbox and now every time a remark is added I get 4 emails with the identical comment. Is there any way you possibly can take away me from that service? Thanks!

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