A South Carolina pawn shop owner who sells guns, guitars and an array of other items says that his bank forced him to close his accounts, and he thinks it is because of the weapons.
Morris Williams, who owns Inman Gun and Pawn, says he thought his relationship with SunTrust Bank was fine — “excellent” in fact.
“We have ample funds in the account to do anything we needed to do,” Williams told Fox Carolina, adding that he thought “everything was just wonderful.”
But then the bank sent him a letter.
“Under the Rules and Regulations for Deposit Accounts, and as a result of our recent decision, we must ask you to close the below listed SunTrust accounts,” the letter reads.
Williams, who opened up two checking accounts with SunTrust in 2006, was given little explanation for the bank’s sudden decision.
“The only thing that they will tell us is that we have been deemed a prohibited business type,” he told Fox Carolina, adding that he believes his shop was targeted by the federal government because he sells guns.
Williams wouldn’t be the first to make such a claim. Lawmakers and consumer advocacy groups have blamed a Department of Justice initiative called Operation Choke Point for pressuring banks to cut off relationships with customers like Williams.
Operation Choke Point was designed to prevent crooks from using the banking and financial payments systems to conduct their business. The Federal Deposit Insurance Corporation also created a list of industries which it deemed “high-risk.” Those industries included gun sellers, pawn shops, coin dealers, pay day lenders and about two dozen industries.
The FDIC did announce last week a clarification to its “high-risk” list, saying that it was not intended to discourage business with companies in those industries.
With pressure from the two federal agencies, critics of the regulations say that banks are forced to be so cautious about who they do business with that they end up avoiding relationships with legitimate but “high-risk” companies altogether.
Gun sellers have been especially vocal about what they see as targeting from the federal government. The owner of Powderhorn Outfitters, based in Hyannis, Mass., told The Daily Caller earlier this year that his bank, TD Bank, shut down his accounts because he sold guns. (RELATED: Gun Seller Rejects Bank’s Attempt To ‘Kiss And Make Up’)
SunTrust Bank said it could not comment on specific accounts but issued a statement.
“As a general rule, we do enable banking relationships with licensed firearms dealers. There are some businesses that we will no longer maintain banking relationships with, particularly those in certain businesses such as pay day lenders and pawn shops, due to the increased risk and costs associated with servicing such accounts.”
In response to a question about whether federal regulation caused those increased risks and costs, SunTrust spokeswoman Sue Mallino referred TheDC back to the company’s initial statement.
“This is another example of a lawful business losing their bank account because of Operation Choke Point,” US Consumer Coalition senior advisor Brian Wise told TheDC.
The coalition has mounted a large scale effort to draw attention to the legitimate and legal businesses that have suffered from what it sees as the burdensome regulation.
“It doesn’t matter if this business is a pawn shop, sells guns, or cashes checks, as long as they are operating within the law their bank shouldn’t be pressured to cut off their account,” said Wise.
“The problem here is that the banks are being forced to make calculated decisions on whether it is cheaper to comply with the increased scrutiny brought on by Operation Choke Point or to cut off the banking relationships altogether.”
SunTrust Bank made news earlier this year, also for its decision to cut off business ties with people that were deemed objectionable.
The bank announced — but then soon reversed — a decision to end a relationship with David and Jason Benham, two brothers who were set to host a reality TV show about flipping houses. Liberals attacked the brothers because they held conservative views on abortion and gay marriage. (RELATED: SunTrust Cuts Business Ties With Benham Brothers After Conservative Views Attacked)
