SunTrust bank closed Brooksville shop's accounts for selling guns, website says

A bank suddenly closing checking accounts for a Brooksville pawn shop that sells guns has opened up Internet speculation that the Obama administration influenced the decision.

Under the headline "Suntrust Bank Cancels Account Because Company Sells Guns," the website FloridaNewsFlash.com recounts how American Gun & Pawn owner Steve Champion received a letter from SunTrust dated March 20, 2015, telling him his deposit accounts, safe deposit boxes and credit cards would be closed. (A reader first alerted us to the story after seeing it on Facebook.)

The letter said that after an account review, American Gun & Pawn’s accounts were no longer jibing with SunTrust’s "corporate business objectives." There were no specifics in the letter, beyond information that he had a month to close his accounts or they would be closed for him.

When Champion contacted the bank, he said a service rep told him he had received "one of those gun letters going around to the gun and pawn shops." The bank wouldn’t reverse the decision.

Champion posted the letter on his shop’s Facebook page, kicking off a flurry of conspiracy theories that SunTrust and other banks were working at the behest of the Obama administration, which was trying to stamp out gun sales nationwide.

FloridaNewsFlash.com, apparently first to report the news online, stoked the fire by saying it was part of an ominous program from the Obama administration called "Operation Choke Point." Many other sites have followed suit.

SunTrust told us they didn’t close American Gun & Pawn’s accounts because the shop sold guns. As we dug into the details, we found that the bank was ending its relationship with some types of customers, but those customers weren't specifically gun shops. 

Bank policy

SunTrust denied they are closing accounts with gun shops, but they are ending relationships with pawn shops. "Any suggestion that this is a firearms issue is inaccurate," spokesman Michael McCoy told us.

SunTrust announced in a Aug. 8, 2014, press release that the bank had "decided to discontinue banking relationships with three types of businesses – specifically payday lenders, pawn shops and dedicated check-cashers – due to compliance requirements." The bank still works with firearms dealers, according to the release.

It takes a little guesswork to determine just why SunTrust has stopped dealing with all pawn shops. There’s no specific regulation saying the bank can’t work with them, and SunTrust would only reiterate to us that they had adopted the policy. And we did find other cases of SunTrust dropping pawn shops in other parts of the country.

We’re not going to weigh in on whether or not it’s fair for banks to deny accounts to pawn shops or payday lenders, although Champion said it was an unfair end to two decades of banking.

"I’ve heard about stuff like this," he told PolitFact Florida. "But it doesn’t matter either way, whether I’m a pawn shop or a gun shop, because I’m a legal business. This is not right."

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Choke Point

FloridaNewsFlash.com writer Samuel McCall didn’t want to comment on the record about Champion’s story, but said he reported it the way Champion told it to him. McCall’s report tied the SunTrust letter to the aforementioned Operation Choke Point.

The U.S. Justice Department started Operation Choke Point in 2012 as a way to stop banking fraud. The operation specifically investigated banks’ relationships with "third-party payment processors" -- the payment services that online stores often rely upon -- to determine if they were defrauding consumers.

Gun rights advocates drew a connection between gun dealers and Choke Point from 2011 guidelines from the Federal Deposit Insurance Corp. that identified so-called "high-risk" businesses that commonly use third-party payment processors. The guidelines warned merchants who used these services had higher than normal potential for committing fraud.

The FDIC list included pawn shops, payday lenders, pornography and yes, firearms and ammunition dealers. (The list also included telemarketers, fireworks sellers, dating services and coin dealers, among others.)

This list led to a firestorm of criticism that the government was attempting to shut down legal businesses through Choke Point, eventually resulting in an investigation by the House Oversight Committee. A report from chairman Darrell Issa, R-Calif., concluded in May 2014 that the FDIC list had become a sort of hit list of businesses for Choke Point to target. The Justice Department denied the charge, saying none of their cases involved legal businesses like gun dealers or porn, and the FDIC removed the list in July 2014.

Justice Department spokesman Patrick Rodenbush told us the three fraud cases that stemmed from Choke Point involved banks.  "In no case has the department targeted any lawful enterprise, such as gun or ammunition sellers," he said.

But the American Banking Association told us it was likely banks had been influenced by federal guidelines in some fashion, though it had no specific information about which ones or why. The FDIC addressed banking concerns with a letter in January 2015 urging banks to evaluate customers "on a case-by-case basis" instead of denying service to entire categories of businesses out of fear of not complying with federal law.

In any case, the backlash against the program continues, with groups like the U.S. Consumer Coalition running a website allowing people to share their stories of businesses allegedly being affected by Choke Point.

Brian Wise, senior adviser for the group, contends Choke Point has one purpose the government won’t admit: "To go after businesses they couldn’t legislate out of existence for the last two decades."

Our ruling

FloridaNewsFlash.com said, "Suntrust Bank Cancels Account Because Company Sells Guns."

Actually, the bank decided recently to end relationships with pawn shops, payday lenders and check cashers, but it will still work with firearms dealers. The FDIC has warned banks to examine relationships with customers that use third-party payment processors, because of the risk of consumer fraud, and a federal program called Operation Choke Point has investigated the same issue. Gun rights advocates have argued that Operation Choke Point is a backdoor way of targeting gun shops, but the government denies there’s any such plan to target gun dealers, and no one has been able to truly prove otherwise.

Overall, we rate the statement Mostly False.