Fourteen of the globe's most prominent financial organizations have joined the National Center for Missing & Exploited Children, and its sister organization, the International Centre for Missing & Exploited Children, to stop the flow of money that feeds commercial child pornography on the Internet, which the group hopes to eliminate by 2008. The Financial Coalition Against Child Pornography includes banks, credit card companies and third-party payment companies, including American Express Co., Bank of America, JPMorgan Chase, Citigroup, Discover Financial Services, e-gold, First Data Corp., First National Bank of Omaha, MasterCard, North American Bankcard, PayPal, First Premier Bank/Premier Bankcard, Standard Chartered Bank, Visa and Wells Fargo.
The group, which also includes Yahoo!, America Online and Microsoft, will work with Child Focus of Belgium, the European Federation for Missing and Sexually Exploited Children, the International Association of Internet Hotlines, the U.S. Office of the Comptroller of the Currency, and law firm DLA Piper Rudnick Gray Cary. "If people were purchasing heroin or cocaine and using their credit cards, we would be outraged and would do something about it. This is worse," noted Sen. Richard C. Shelby, the Alabama Republican who chairs the Senate Banking, Housing and Urban Affairs Committee and was the catalyst in coordinating the group. In 2001, NCMEC's CyberTip Line received more than 24,400 reports of child pornography, a figure that increased 14-fold to more than 340,000 in early 2006.
"The number of reports of child pornography has been going through the roof," notes John Shehan, CyberTip Line program manager of the NCMEC, who points out that 90 percent of all hotline tips are about child pornography, which is one of the few kinds of porn that is illegal worldwide. In 2004, the hotline received 112,083 reports, five times that of 1998, when the hotline was created. He says the group had "no problem" getting financial firms on board. "Once the large players came forward, we didn't have any problems with the rest of the members," he says. "We all want to snuff out every single one of the those [payment] options and make it much harder to make a profit out of child pornography."
Does bank consolidation promote poverty? A stunning report in The Journal of Finance finds that neighborhoods affected by bank consolidation are subject to higher future interest rates, reduced local construction, lower real-estate prices, and an influx of poorer households. "The lack of competitiveness in the local loan markets results in lower commercial real estate investment and a drop in real estate prices," the article's authors, finance professors Mark J. Garmaise of UCLA and Tobias J. Moskowitz of the University of Chicago, said in a press statement. "This causes unemployment to rise alongside an influx of lower-income households. Consequently, there is an increase in property crime within the affected neighborhoods." The authors maintain that bank mergers should be carefully regulated to prevent economic deterioration of affected neighborhoods.
Garmaise and Moskowitz applied their results to the FBI's national crime figures from the Uniform Crime Reports and found that "a mean decline in banking competitiveness due to mergers from 1992 to 1995" is associated with 24,300 more property crime offenses over the period 1995 to 2000. The poorest neighborhoods suffered the greatest crime increases after mergers.
