Name: How Mastercard’s Rules Could Be Used To Ban The Right From Banking
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How Mastercard’s Rules Could Be Used To Ban The Right From Banking

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ShareLast week, Mastercard, Inc., announced new rules for banks processing credit card payments to pornography websites, designed to combat child pornography and sex trafficking. Unfortunately, for a country whose corporate overlords refuse (or are unable) to distinguish between intrinsic evil and prudential policy judgments, this promising development will likely also serve as a beta test to further attack conservative groups.In December, Mastercard and Visa the use of their credit cards on the Pornhub website after The New York Times ran a column by Nicholas Kristof detailing the availability of child abuse and rape videos on that site. Mastercard explained its decision by confirming that Pornhub, a subsidiary of MindGeek, had violated the company’s standards by providing “unlawful content.” Visa quickly followed suit, announcing that it too had instructed “the financial institutions who serve MindGeek to suspend processing of payments through the Visa network.”On April 14, 2021, Mastercard’s senior vice president John Verdeschi announced new standards applicable to all merchants providing pornography—and their banks. Under the new policy, all banks that connect merchants to the Mastercard network will need to certify that the purveyor of pornography “has effective controls in place to monitor, block and, where necessary, take down all illegal content,” with a process that “addresses any illegal or nonconsensual content within seven business days.” Additionally, the pornography merchants must provide “documented age and identity verification for all people depicted and those uploading the content” and a “content review process prior to publication.”Verdeschi explained Mastercard’s new requirements build on years of work with Europol and the National and International Centers for Missing and Exploited Children, and more recently formed relationships with the Internet Watch Foundation and We Protect Global Alliance—organizations fighting the sexual exploitation of children.While the standards Mastercard announced last week are new, in unveiling the rules, Verdeschi stressed that “long ago, [Mastercard] established the rules and standards that govern the use of our payments network. Chief among these is that we do not and will not permit merchants to engage in unlawful activity on our network.”Mastercard’s policy thus extends beyond merchants peddling illegal pornography. For instance, working with the International Anti-Counterfeiting Coalition and the Center for Safe Internet Pharmacies, Mastercard quickly to complaints of sales counterfeit goods and the sale of illegal pharmaceuticals.to academic , disrupting the sale of illegal goods through the payment networks of Mastercard, Visa, and their partner banks appears more effective than legal action. That same research detailed the policies and procedures that provide Mastercard (and its main competitor, Visa), the ability to punish banks serving merchants illegally selling counterfeit goods or pharmaceuticals, which cause banks to refuse to do business with high-risk merchants, or to adopt such stringent policies that there are “practically zero approval rates.”When applied to illegal activities and especially child pornography, Mastercard’s policy promotes the common good. But leftist activists have already been pushing Mastercard, Visa, and other payment providers to expand their ban beyond illegal activities, with the eventual goal of demonetarizing opposing political organizations and views.In 2019, the group SumOfUs— to George Soros’s —forced Mastercard to hold a shareholder vote on “Proposal 5,” presented as a “Human Rights Proposal.” provided:Resolved: Shareholders of Mastercard Incorporated (‘Mastercard’) request that the Board direct the Nominating and Corporate Governance Committee create a standing committee to oversee the Company’s responses to domestic and international developments in human rights that affect Mastercard’s business.Mastercard had attempted to avoid a shareholder vote on establishing a “human rights” committee by arguing Proposal 5 concerned “ordinary business operations” and, as such, under Securities and Exchange Commission (SEC) regulations was not subject to a shareholder vote.In a letter seeking an advisory opinion from the SEC on the need to present Proposal 5 to shareholders, Mastercard argued the proposal was “primarily focused on the use of the Company’s products and services by groups with goals that the Proponent [SumOfUs] views to be controversial or problematic.” So because Proposal 5’s “key objective is to dictate the manner in which the Company decides which merchants should be prohibited from using its payment processing system,” it concerned ordinary business operations exempted from shareholder votes.Yet the SEC Mastercard’s position, so in its 2019 proxy materials, Mastercard presented Proposal 5 to shareholders for a vote, along with SumOfUs’s statement in support of the proposal. That supporting statement and its reliance on “hate” groups, as defined by Color of Change at its webpage BloodMoney.org, exposes left-leaning activists goal of enlisting corporate America in their political fight against the right.“Mastercard’s exposure to conflict in human rights risk is significant,” SumOfUs’s supporting statement begins, noting the “company operates in over 210 countries and territories, some of which have a significant risk of human rights violations.” The supporting statement :Companies can face risks related to human rights even when they only perform support functions. Internet infrastructure companies like web host GoDaddy, social media platform Facebook and payments firm PayPal have come under pressure for doing business with or providing a forum for neo-Nazis and other hate groups. Mastercard has received native publicity for processing of payments to white supremacist groups. According to the website bloodmoney.org, Mastercard continues to process payments for organizations such as American Border Patrol, League of the South, Proud Boys and Stormfront.While SumOfUs framed its concern as Mastercard’s processing of payments for “neo-Nazis” and “white supremacist groups,” SumOfUs’s reliance on “bloodmoney.org’s list of hate groups gives away the game.Bloodmoney.org is a website run by the Color of Change, “an online organizing organization created by Obama administration’s former ‘green jobs czar’ Van Jones and the former director of grassroots mobilization for MoveOn.org, James Rucker.” On its webpage, Color of Change “Right Wing Politics” with “White Nationalism,” and stresses its work seeks to “dismantle” right-wing infrastructure and support.The Bloodmoney.org website furthers that goal by pushing people to “tell” payment networks, such as Mastercard, American Express, PayPal, Visa, ApplePay, and Discover, to ban “hate groups” from receiving funds. The list of “hate groups,” however, includes mainstream conservative organizations such as the American College of Pediatricians, Family Research Council, and the Center for Security Policy.Mastercard opposed SumOfUs’s proposal, arguing other units of the business already focus on illegal activities, then adding:We operate our network on the principle that consumers should be able to make all lawful purchases, and our franchise rules ensure compliance with the laws pertaining to the acceptable use of our payment processing services by merchants, acquirers and issuers. We regularly monitor activities involving our products and services for any illegal use. When we process payment transactions, we do not have visibility into goods that are purchased or the use of those goods. When we are made aware of illegal activity or rules violations, we work closely with law enforcement and acquirers to shut down those activities.During the annual meeting, Mastercard’s chairman of the board, Rick Haythornthwaite, further: “There are many views out there and so we have to sit down as a company and ask ourselves, first of all, is there any illegal activity taking place, is there an unlawful transaction? And if there is, we turn it down, we talk to law enforcement agencies, we talk to acquiring banks and shut it down.”But, “If it is lawful, then we need to respect that transaction,” Haythornthwaite added. “If it is something that is sort of against the tide of society, it’s the society to rise up and change the law.”Mastercard’s focus on the illegality of the transaction mirrors the approach the company took following the murder of Heather Heyer by a white supremacist in Charlottesville, Virginia.“We have all seen the news reports from Charlottesville this week, as we have from too many other cities in the past several months,” a press release from Mastercard began. After condemning “the violence, intolerance and hatred that were on display,” Mastercard noted that it shut down the use of its cards on sites “that make specific threats or incite violence—because this activity can be unlawful.”The press release added, however, that “our cards may still be accepted at some sites that people find offensive.” “Our standard,” Mastercard stressed “is whether a merchant’s activity is lawful, even when we disagree with what they say or do. That supports the ideals of free expression,” and “we believe that offensive speech will be seen for what it is and that it will lose its force in the free marketplace of ideas.”While SumOfUs’s so-called human rights proposal failed to pass in 2019, the last two years have seen an acceleration of the left’s attempt to silence speech, with few companies standing up for the “free marketplace of ideas.” and its subsidiary, as well as Amazon, have demonetized speech with which they disagree, while , , and have banned conservatives and alternative social media companies from their business offerings.Other attempts by SumOfUs to pressure financial institutions to demonetize legal, but in its view offensive, organizations have proved more successful. In its 2019 , SumOfUs identified as one of its programing activities its “pressuring JP Morgan Chase to stop funding private prisons and detention centers.” After years of pressure, JP Morgan Chase in 2019 that it intended to stop financing two of the largest operators of private prisons and immigration detection centers.Now that activists know banks will bend, the push will continue beyond JP Morgan Chase and beyond businesses running prisons and detention centers. Once corporate America departs from the legal-illegal dichotomy, there is no limiting principle. Intrinsic evil would provide one, but our society can no longer distinguish between acts that are always evil and those that require prudential judgment, on which reasonable people can disagree.Further, just as preventing merchants peddling illegal goods and services from monetarizing their sales has proved effective to fight child pornography and the selling of counterfeit goods and illegal pharmaceuticals, disrupting the payment networks of conservative organizations, outlets, and businesses would threaten their survival. For that reason, the efforts to force corporations to deny credit and merchant services to right-leaning organizations will redouble.Mastercard’s new rules that force banks to police pornography outlets provides the template for demonetizing conservative groups. Mastercard and its competitors need not even alter their professed company policies of limiting bans to illegal activities. Requiring banks to institute policies to ensure “merchant” organizations have effective controls “to monitor, block and, where necessary, take down” threatening content or conduct that could allegedly incite violence could be enough to dissuade banks from issuing or servicing conservative organizations.In response to my inquiry, Mastercard communications Senior Vice President Seth Eisen was unclear about whether alleged “threats of violence” or “illegal activity” are the company’s threshhold for denying service: “We do not and will not permit merchants to engage in unlawful activity on our network,” he wrote in an email. “This includes sites that make specific threats or incite violence because this activity can be unlawful.”Of course, as has been established in the Parler saga and others, “violent threats” allegations can be used to shut down non-leftist organizations while leaving unaffected leftist organizations such as Twitter and Facebook that engage in precisely the same behavior. People make threats on Twitter and Facebook, yet those companies face no loss of access to social infrastructure whatsoever.Banks and payment systems have long been the last holdout to corporate cancel-culture pressure. But the march from capitalism to cultural Marxism in the boardrooms has been underway for some time.With last month’s sprint by many America’s largest companies to to voter-integrity legislation, including the some of the biggest names in banking and financial services—Bank of America, Wells Fargo &amp; Co., Goldman Sachs, Mastercard, Discover Financial Services, and American Express—conservatives may just need to add banks and financial service providers to internet servers, social media outlets, and schools as things they need to build from scratch.August 8, 2022May 17, 2022April 27, 2022February 23, 2022IntroducingJoin now to unlock comments, browse ad-free, and access exclusive content from your favorite FDRLST writers×

ShareLast week, Mastercard, Inc., announced new rules for banks processing credit card payments to pornography websites, designed to combat child pornography and sex trafficking. Unfortunately, for a country whose corporate overlords refuse (or are unable) to distinguish between intrinsic evil and prudential policy judgments, this promising development will likely also serve as a beta test to further attack conservative groups.In December, Mastercard and Visa the use of their credit cards on the Pornhub website after The New York Times ran a column by Nicholas Kristof detailing the...

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Senior Legal Correspondent  @FDRLST . Catholic,conservative,~25 yrs fed. law clerk, former full-time university faculty, sometimes adjunct, lawyer, mom to C

Margot Cleveland

A web magazine of culture, entertainment, and politics. Be lovers of freedom and anxious for the fray.

How Mastercard’s Rules Could Be Used To Ban The Right From Banking

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