Citibank and Fabulis Followup: Citibank Not so Fabulis

A lot of Websites, print publications, and blogs picked up the story about Citibank denying fabulisa Gay social networking site access to the company's own bank accounts. I wrote about it here. There's interesting coverage from the Wall Street Journal here. In an update to the Fabulis blog, Jason Goldberg, the founder and CEO of Fabulis notes "a compliance officer at Citibank did a review of the fabulis website and blog and marked it as porn!"

I was pretty sure that someone saw a gay site, with video (the videos are either sweet or boring self-portraits, but are not even indelicate, never mind porn) and decided "gay = porn." He posts a "policy change" from Citibank on his Web site which begins with:

At Citibank, we have learned a great deal from recent customer issues related to Internet business accounts. Mistakes were made in some instances, in which we apologized and corrected the problem. These issues made it clear to us that the language in our branch procedures was not specific enough and left too much room for interpretation from one account to the next.

This is not an admission of guilt, or an apology; I'd like to draw your attention to the use of passive voice and the subjunctive: "Mistakes were made in some instances." The policy statement continues:

For Internet business accounts, we have made it clearer to our bankers what the due diligence process entails. For example, we will continue to reserve the right to decline or suspend an account if we find illegal or discriminatory content, or if the site involves gambling or pornography. Beyond that specific due diligence, however, we do not monitor or evaluate our customers' web content.

I find this troubling in the extreme, in part, because it reeks of hypocrisy. You and I both know that CitiBank will happily process the hotel receipts from porn producers at a shoot, or from people buying porn online. They're essentially saying "we reserve the right to make value judgements about your legal business, but we hope we don't get caught doing it again."

Maybe CitiBank is afraid they won't get another donation of bailout funds.

I still distrust CitiBank, for one more reason. I note that Jason Goldberg closes his post with this observations:

. . . this whole episode wasn't about fabulis, it's about the power of social media. fabulis was just the product. Social media was the platform. Thousands of tweets and voices of outcry got Citi to change its policies in less than 72 hours. Think about that. The Obama Administration can't get the banks to change, but we can!

In otherwords, CitiBank realized customers were quite willing to take their business elsewhere.